Report: Middle Eastern Banks Can Cut Risk and Compliance Costs

Amid increasing regulatory complexities and global market uncertainties, banks in the Middle East could significantly reduce their risk and compliance costs by more than the often-cited 20% through strategic technology investments, according to Finastra, a global provider of financial software applications. Recent market research highlights that 75% of banks globally plan to accelerate their technology transformation to enhance their risk management capabilities. Olivier Morice, Principal Solutions Consultant, Treasury & Capital Markets at Finastra, confirms that Middle Eastern banks, facing uniquely challenging market conditions, stand to benefit significantly from embracing advanced treasury and risk technologies.

“Banks in the region continue to struggle with fragmented legacy systems, manual processes, and increasing compliance burdens,” Morice commented. “Our experience indicates that integrating modern, cloud-based platforms and employing advanced technologies such as generative AI can easily drive cost reductions beyond the often-cited 20%, while significantly enhancing operational agility.”

Morice added, “A substantial challenge facing regional banks today is the complexity inherited from legacy systems, many of which have evolved incrementally and become increasingly fragmented. Consolidating these disparate functions onto a unified platform dramatically streamlines risk and compliance activities, reducing operational overhead and manual interventions, while simultaneously enhancing responsiveness to market and regulatory changes.”

By leveraging technologies such as automation and generative AI, Middle Eastern banks can execute risk assessments and compliance checks in near real-time rather than weekly or monthly cycles. Finastra emphasises that microservices architectures and API-driven technologies further empower banks to rapidly adapt and onboard new functionalities in response to evolving regulatory or market demands.

Finastra’s expert also underscores how generative AI is becoming crucial in filling internal knowledge gaps: “Generative AI and large language models provide instant, context-sensitive information to employees, potentially enhancing decision-making and accelerating compliance processes.”

With the evolving regulatory landscape and ongoing macroeconomic pressures, investing in robust treasury and risk management technology is becoming not only beneficial but essential to sustained competitive advantage in the region.

Finastra continues to work closely with Middle Eastern banks, helping them transform risk management capabilities, drive down operational costs, and increase agility through best-in-class financial technology.