MIDDLE EAST
FSI incumbents in the GCC face threats from FinTechs , open banking and BigTech . Luka Celic , Head of Payments Architecture ( MENA ) at Endava , explores strategies for banks and PSPs to adapt and thrive amidst these challenges .
SURVIVAL OF THE SAVVY : HO INCUMBENTS CAN STAY RELE THE GCC ’ S PAYMENTS REVOLU
Aerial view of Dubai city
Here is every reason to believe that incumbents will come out on top against FinTech and BigTech .
Banks and payment services providers ( PSPs ) have been the region ’ s engines of economic growth for as long as anyone can remember . It is therefore jarring to imagine that this dominance is now under threat . After all , venerable banks and credit card companies have elegantly embraced the Internet , mobile banking and the cloud to deliver self-service banking to millions of customers . But consumers , especially digital natives , have never been known for congratulating an industry for a job well done . Instead , with each convenience , their expectations only grow . The siege reality of the pandemic accelerated a shift in consumer behaviour , and Middle East banks and PSPs now face challenges on three fronts .
The first is FinTechs . From Saudi Arabia ’ s BNPL ( buy now , pay later ) pioneer Tamara and Qatar ’ s unbanked-oriented platform cwallet , to online financial services , Klarna , tech startups have been able to tap into rapidly changing consumer markets . New companies find it easier to pivot . And like speed boats racing against aircraft carriers , they weaved effortlessly to fulfil a range of desires amid high smartphone connectivity rates and a range of other favourable market conditions . By one estimate from 2022 , BNPL alone accounted for US $ 1.5 billion ( or 4 %) of the Middle East and Africa ’ s online retail market .
The second threat is open banking , which comes in many forms , but one example
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