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How greenfield digital banks are transforming MENA’s financial landscape
In this episode of the EY MENA Financial Services Insights podcast, host Mayur Pau discusses the emergence of greenfield digital banks in the Middle East with Shahzeen Baloch, EY MENA Financial Services Technology Consulting Leader.
In this episode of the EY MENA FS podcast, Mayur Pau, EY MENA Financial Services Leader engages with Shahzeen Baloch, EY MENA Financial Services Technology Consulting Leader, to explore the greenfield digital banks landscape in the Middle East. The discussion highlights the unique opportunities presented by the region's strong economic fundamentals, shifting customer behaviors, and supportive regulatory frameworks.
Listeners will gain insights into the strategic considerations for selecting technology partners, the critical role of RegTech in ensuring compliance, and the potential for Islamic banking propositions to be designed as digital-first offerings. The conversation also delves into emerging technologies such as AI, open banking and real-time data architectures, which are set to shape the future of digital banking in the region.
This episode will provide deep insights into how digital transformation is redefining banking in the MENA region, the technological advancements driving this change and the implications for both traditional and new entrants in the financial services sector. Tune in to discover how greenfield digital banks can leverage these trends to create innovative, customer-centric solutions that meet the demands of a rapidly evolving market.
Key takeaways:
Understand the current landscape and opportunities for greenfield digital banks in the Middle East.
Recognize the importance of adopting a modular, cloud-native architecture for digital banking success.
Learn how to leverage data and artificial intelligence (AI) for hyper-personalized customer experiences.
Explore the critical role of RegTech in ensuring compliance and operational resilience.
Discover strategies for designing Shariah-compliant products that meet growing consumer demand.
Identify emerging technologies shaping the future of digital banking, including open banking and real-time data architectures.
Gain insights into effective vendor selection and partnership strategies for long-term innovation.
Mayur Pau:
Welcome to the EY MENA Financial Services Podcast, where we explore how banking is evolving in the Middle East.
I’m your host Mayur Pau, and I lead the MENA Financial Services practice.
Today, we will be covering a hot topic around greenfield digital banks in MENA. We are seeing both existing banks launching greenfield propositions to cover new products and services, as well as brand new entrants.
We will cover some aspects of the market, technology, regulatory, and data and AI considerations and I am very much looking forward to our discussion.
I’d like to welcome Shahzeen Baloch, EY MENA’s Financial Services Technology Consulting Leader.
It’s great to have you with us, Shahzeen.
Shahzeen Baloch:
Thanks Mayur, happy to be here.
Pau:
So Shahzeen, why is now the right time for greenfield digital banks in the Middle East, and what are the major opportunities driving this shift?
Baloch:
If you look at the Middle East today, the fundamentals are incredibly attractive for greenfield digital banks. GCC banks are coming off a period of strong profitability and balance sheet strength, with returns on equity in the low-teens and cost-to-income ratios improving. That creates both the capital and the strategic appetite to experiment with new, digital-first models.
At the same time, customer behavior has shifted decisively. Smartphone penetration is effectively universal in the GCC, and a large, young, digital-native population now expects banking to work no different to their favorite apps. Banking should be instant, personalized and embedded into their daily life, not tied to a branch network. That’s why we’ve seen the rapid rise of neobanks and digital arms.
Regulators have also moved from cautious observers to more active enablers. Across the region, we’re seeing digital-bank licensing frameworks, open-banking initiatives, sandboxes, and clear guidance on cloud and security. When you put those pieces together — strong incumbents, forward-leaning regulators and demanding customers — it’s a perfect moment to launch greenfield digital banks that are cloud-native from day one, unconstrained by legacy cores and able to innovate at the speed of a FinTech while still meeting the standards of a regulated bank.
Pau:
I could not agree with you more, Shahzeen; and have you seen some of these developments firsthand with some of our clients? And in terms of core technology platforms in your view, what areas should new digital banks prioritize from day one?
Baloch:
For a greenfield digital bank, the most important decision is to commit to a modular, cloud-native architecture from day one that creates the blueprint for the bank. At the heart of that is a next-generation core banking platform delivered as SaaS, with real-time processing, strong product configuration capabilities and a clean, well-documented API layer.
On top of the core, you need a modern digital experience layer —mobile and web apps built around customer journeys such as onboarding, spending, saving, investing is very important. That layer typically includes CRM platform, marketing automation and campaign tools to orchestrate personalized experiences across channels.
Equally critical is the data platform. Successful digital banks treat data as a product; they invest early in scalable data platforms, real-time event streaming, analytics, AI and Machine Learning capabilities. Those are all the core ingredients that really help power risk models, fraud detection, personalization and next-best-action engines.
Finally, there are a set of foundational platforms that often get underinvested but are enormously important in the region: eKYC and digital onboarding tailored to local ID schemes, robust AML and transaction monitoring, consent and privacy management for open banking, and a strong observability stack — logging, monitoring, and tracing — to run a resilient 24/7 operation.
Pau:
Great insights, Shahzeen, and the data angle is definitely prominent where we can see several banks starting to think about harnessing the data streams using AI effectively.
But to get this right, what points do banks need to consider when selecting software vendors and technology providers, and how should they approach selecting the right partners?
Baloch:
Great question, Mayur. You know, the first point is that vendor selection is now just as strategic as selecting a core market segment. You’re not just buying software; you are effectively choosing the pace at which you can innovate over the next decade.
So, I usually look at three lenses.
The first is regulatory and regional fit: does the platform have live references in the Middle East or similar regulatory environments, do they support local hosting options? Do they align with local data, residency rules local cloud requirements?
And sometimes, even if they don't, we're seeing vendors at the moment really invest in those areas and work in partnership with many of our clients here.
The second lens is architectural openness. Greenfield banks should favor platforms that are API-first, event-driven and genuinely composable. You want to be able to switch out a KYC provider, add a new payment rail or integrate a FinTech partner without triggering a multi-year transformation program. Access to sandboxes, developer portals and clear documentation are often better indicators of success than a long feature checklist.
The third lens is scalability and total cost of ownership. That includes not only licensing and infrastructure costs, but also the availability of skills in the local market, the maturity of implementation partners, and the vendor’s financial strength.
The most successful digital banks in the region tend to assemble a curated ecosystem: a cloud provider, a next-gen core, specialist payments platform, strong onboarding/AML vendors and a small number of deep FinTech partnerships — over having everything on a single, closed stack.
Pau:
I can see some points there Shazeen which also enable banks to modernize their technology and infrastructure as part of this journey. But pivoting to security, risk and compliance, what should new digital banks focus on?
Baloch:
Digital banks in this region operate under intense regulatory scrutiny; particularly around cybersecurity, data privacy and financial crime. The good news is that modern platforms can actually make it easier to secure and be compliant — as long as you design with those constraints from day one.
On security, cloud-native doesn’t mean “less secure”; it means you can leverage the security investments of major cloud providers and layer your own controls on top. That typically includes zero-trust identity and access management, strong customer authentication, data encryption in transit and at rest, secrets management and automated security testing built into the software delivery pipeline. In practice, that looks like every code change being scanned, tested and monitored before it even hits production.
On risk and compliance, regulators in the GCC are now explicitly requiring robust frameworks for AML, counter-terrorist financing, sanctions screening and fraud monitoring in digital channels. Greenfield banks should therefore treat RegTech as a core capability, not just an afterthought: real-time transaction monitoring, behavioral analytics, case management tools and clear audit trails are important for every key decision.
And finally, I’d say operational resilience is becoming a board-level topic. For a digital bank, downtime is brand damage. So, architecture choices such as active-active deployments across regions, automated failover, regular disaster-recovery drills and clear incident response playbooks are just as important as launching the next feature. The banks that get this right will turn secure and compliant from a cost center into a complete differentiator.
Pau:
I fully concur with you, Shahzeen, on RegTech becoming a critical component going forward and banks absolutely should be thinking about making risk and compliance a differentiating factor rather than a “tick in the box”.
On a different topic if we think about the strong regional demand for Sharia‑compliant products, how can greenfield digital banks design digital‑first Islamic banking propositions, and what technological capabilities are required to serve this segment effectively?
Baloch:
You know Islamic banking is not a niche in this region; it is a core part of the financial system and a major growth engine. Across the GCC, demand for ethical, transparent and Shariah-compliant products continues to rise, and we’re now seeing that demand extend very clearly into digital channels.
For greenfield digital banks, this is a huge opportunity to design Islamic propositions as digital-first rather than a bolt-on to conventional products. That starts with product engine: the platform must be able to model Shariah-compliant contracts — such as Murabaha, Ijara and Wakalah structures — in a parameterized way, to support profit-sharing rather than interest, and segregate funds appropriately throughout the product lifecycle.
On top of that, Islamic banks need strong Shariah governance embedded into workflows: from pre-approved product templates and investment screening rules, to auditable decision trails for the Shariah board. Digital channels then have to translate that into a clear value proposition for customers — emphasizing transparency, impact and ease of use.
If you put all of that together, digital Islamic banks in the Middle East can do more than branch-based services on a phone. They can reach underserved segments, offer cross-border services to the wider Muslim world, and position the region as a global hub for modern, values-based finance — provided the underlying platforms have been designed with Islamic finance in mind from day one.
Pau:
Great insights on Shariah compliant banking. Now looking ahead, which emerging technologies — AI, machine learning, open banking, real‑time data architectures — will shape digital banking over the next five years?
Baloch:
That’s a tough one.
You're asking a technologist to pick three out of many, so I'll try my best.
Well, I think if I look at the Middle East, there's probably three prevalent ones that I see will really make an impact.
First is data-and AI-enabled banking will move from pilots to production. Banks are already investing heavily in digital platforms, but the differentiator will be how they use data and the underlying infrastructure to deliver hyper-personalized experiences — from proactive cash-flow insights for SMEs to AI-driven financial coaching for retail customers. That requires a strong data platform, responsible AI governance and explainable models that regulators are comfortable with.
The second area is the open banking and embedded finance; I feel that will mature. We’re seeing regional open-banking aggregators and platforms emerging, and regulators across the GCC are issuing frameworks that encourage secure data sharing. For greenfield digital banks, this is an opportunity to position themselves not just as an app, but as a platform others can build on — exposing APIs to FinTechs, to marketplaces and even non-financial brands can embed accounts, payments and credit into the customer journeys.
Third, is the convergence of payments, wallets, digital identity will accelerate. Instant payments schemes, tokenized cards are spreading quickly across the region, and several central banks are exploring the potential of CBDCs(Central Bank Digital Currencies) and next-generation payment rails. Architecturally, this all argues for event-driven, microservices-based systems that can scale elastically, support real-time processing and plug into multiple rails without re-architecting the bank each and every time. Greenfield banks that design for scale and interoperability from day one will be able to ride these waves instead of constantly rebuilding their foundations.
Pau:
Thanks for sharing these great perspectives, Shahzeen. We covered a range of topics today — from the market dynamics, platform and technology considerations, data and AI trends in the market, Sharia product and compliance considerations, and finally some emerging technologies which will shape the future of digital banking.
Thank you, and I appreciate your time today.
Baloch:
Thanks Mayur.
Pau:
That’s it for today’s episode on The Platform Play in Greenfield Digital Banks in the region. Stay tuned for our next episode in the MENA Financial Services podcast series available on ey.com, where we’ll dive deeper into other financial services topics.
Thanks for listening.
