The rise of fintechs in the Middle East: What banks must do to keep competitive

The ultimate guide for legacy banks in the Middle East and Northern Africa. Find out how to compete or collaborate with fintechs in order to maintain your valuable SME and retail customers.

What SME growth means for legacy banks

These tremendous advances in technology and innovation in the region, combined with aggressive e-payment and cashless directives that governments are setting, mean that the digital payments market in the area is destined to boom. Consumers are more digital and more empowered than they have ever been before. They want the cheaper rate, the faster service, and the transparency that neo banks and fintechs offer for cross-border payments. Many legacy banks that cannot meet their customers’ expectations are losing their retail customers to fintechs.

How legacy banks can avoid being overtaken by fintechs

Across the world, neobanks and fintechs like Revolut, Monzo, and Wise have publicly announced they will be aggressively chasing small business customers instead of retail clients. Fintechs are transforming how financial services are delivered and have leapfrogged traditional banks by making lending easier, cheaper, and quicker to obtain. They also offer a high level of transparency when it comes to interest rates combined with high standard customer service and user experience. By running effective marketing campaigns and being inclusive in terms of being open for underserved markets like the middle east and underserved customers such as SMEs, they are at the forefront of financial services and have been growing at a rapid rate.

Traditional banks have for a while been concerned about fintechs taking over a large chunk of their market. For both consumers and SMEs, the conventional way of using SWIFT to send money is too slow, expensive, and non-transparent. Fintechs have increased customers’ expectations with their customer-focused mindset. Today’s consumers have more options, more knowledge and more power than before. Banking institutions that think ahead should instead see the fintechs as an opportunity to move ahead of the competition. Partnering up with them is an excellent opportunity for legacy banks to offer cross-border payments that are fast, cheap and reliable.

If you are interested in implementing a white-label solution that allows you to offer payments from the MENA region to the rest of the world, learn more about our cross-border payouts offer.