Digital transformation is no longer a distant ambition for banks—it is a present-day imperative. Across the globe, financial institutions are racing to modernize, driven by evolving customer expectations, competitive threats from fintechs and big tech, and the need for operational resilience. Yet, the journey is far from uniform. Middle Eastern banks, in particular, are navigating a unique landscape shaped by local regulatory complexity, legacy infrastructure, and a rapidly digitizing customer base. How do they compare to their peers in the U.S., U.K., Australia, Germany, Canada, and Southeast Asia? Here, we benchmark Middle Eastern banks against global leaders, highlighting shared imperatives, regional nuances, and actionable insights for accelerating transformation.
Across all major banking markets, improving customer experience is the universal priority. Banks worldwide are investing in personalized, omnichannel journeys—leveraging data to deliver tailored products, seamless digital interactions, and new value-added services. In the Middle East, 40% of banks cite personalized customer journeys as their top customer experience transformation priority, closely mirroring the U.S. (44%), U.K. (40%), Australia (43%), and Germany (37%).
AI and generative technologies are also rising to the top of the agenda. Middle Eastern banks are increasingly prioritizing generative AI for internal use, with 32% focusing on applications such as credit analysis, risk measurement, and document automation. This trend is consistent with global peers: 40% of U.S. banks, 37% of Australian banks, and 46% of Canadian banks are investing in generative AI for operational efficiency and innovation.
While the ambition is shared, Middle Eastern banks face distinct challenges. Legacy systems remain a significant barrier, with 78% of regional respondents stating that outdated infrastructure hinders their ability to deliver the digital experiences customers expect. This is a common pain point globally—67% of U.S. banks, 70% of German banks, and 68% of Canadian banks report similar struggles.
Regulatory complexity is another defining challenge in the Middle East. 38% of banks in the region cite regulatory changes as a key barrier to transformation, compared to 36% in the U.S., 33% in Australia, and 40% in Canada. The diversity of regulatory requirements—from data residency to Sharia compliance—demands tailored, market-specific solutions and close collaboration with local authorities.
Budget limitations are a top-three barrier for Middle Eastern banks, with 40% identifying it as the biggest obstacle to digital transformation. This is echoed in Australia (41%) and Germany (37%), where economic pressures and the need for cost efficiency are shaping transformation agendas. Talent development is also a focus: 36% of Middle Eastern banks are investing in upskilling and reskilling existing staff, while 32% are prioritizing new talent acquisition—a balance seen in other leading markets.
Adopting agile operating models is a marker of transformation maturity. In the Middle East, 43% of banks report having a fully agile operating model, outpacing Australia (21%), Canada (26%), and Germany (29%), and aligning closely with the U.S. (33%) and U.K. (34%). This agility is critical for rapid innovation, cross-functional collaboration, and responding to market shifts.
Personalization is at the heart of customer experience transformation. Middle Eastern banks are not only focusing on tailored journeys but also on expanding their product and service offerings. 39% are developing new or nontraditional financial services, such as travel booking, as part of their CX strategy. Omnichannel delivery is another priority, with 36% aiming to make products seamlessly available across all channels—a trend mirrored in Australia, the U.K., and Southeast Asia.
Combining customer data across systems to build a richer understanding is a key focus in Canada (56%), the U.K. (43%), and Southeast Asia (42%), and is increasingly being adopted in the Middle East as banks seek to unlock deeper insights and drive hyper-personalization.
AI adoption is accelerating across all regions, but the focus is shifting from experimentation to enterprise-wide deployment. In the Middle East, 32% of banks are prioritizing generative AI for internal use, with 66% pursuing transactional use cases. This aligns with the U.S. (65%), U.K. (76%), and Germany (50%), where banks are leveraging AI for credit analysis, portfolio management, underwriting, and risk measurement. The emphasis remains on internal, non-customer-facing applications, but the groundwork is being laid for future customer-facing innovation.
Environmental, social, and governance (ESG) considerations are increasingly influencing transformation strategies. In the Middle East, 78% of banks say ESG is a key driver of digital transformation, and 70% believe their ESG strategy provides a competitive advantage. This is on par with Southeast Asia (65%) and Australia (57%), and ahead of the U.S. (55%) and U.K. (60%). Diversity, equity, and inclusion (DEI) commitments are also gaining traction, with Middle Eastern banks reporting higher DEI engagement than the global average.
Middle Eastern banks are confident in their transformation progress. 75% believe they are ahead of competitors in transforming customer experiences, and 94% feel they lead in innovation for products and services. This self-assurance is echoed in Germany (76%), the U.K. (63%), and Australia (59%), reflecting a global trend of rising ambition and competitive benchmarking.
The Middle East offers valuable lessons for banks worldwide:
While the pace and focus of digital transformation vary by region, the direction is clear: banks must become more agile, data-driven, and customer-centric to thrive. Middle Eastern banks are making significant strides, particularly in agile adoption, AI deployment, and ESG leadership. By learning from global best practices and addressing unique regional challenges, Middle Eastern banks can accelerate their transformation journeys and define the future of banking in the region—and beyond.