The coming year will test how far commercial banks have truly evolved. Across the GCC and beyond, the financial industry stands at a point where the difference between opportunity and stagnation now hinges on the speed to adapt. McKinsey notes that speed has become “a strategy in and of itself” – those that move faster, decide faster, and build faster will own the future. And nowhere is this more evident than in the GCC, where every player – from digital challengers, established banks, regulators, everyone is moving with speed to accelerate innovation.
Legacy commercial banks have a critical advantage if they choose to act on it. They already command deep customer relationships, strong balance sheets, and regulatory trust – assets most fintechs can’t replicate. But those advantages only matter if banks use them to move faster, not to stay comfortable. With the GCC’s digital banking market growing at about 20.8% annually – more than twice the global average of 9.98% – the opportunity is clear. Commercial banks in the region now need to move with speed to secure dominance on the digital front and turn their traditional advantage into a double engine of growth.
In this blog, we examine the key opportunities shaping the future of commercial banking in the GCC and beyond, and how institutions can position themselves for sustained growth in 2026.
Hybridization Already Deep in Commercial Banking
Hybridization is already deeply embedded in today’s commercial banking model. Across the GCC and globally, most banks now operate in a hybrid state – where digital banking coexist with traditional branch networks, and technology supports rather than replaces human relationships. Most banks have built digital banking apps, internet banking, and USSD channels to serve customers anytime, anywhere, while still maintaining branch networks for advisory, complex transactions, and high-touch relationship management. This dual model has helped banks modernize without losing the trust and familiarity that define their customer relationships.
Heading into 2026, the opportunity lies in moving beyond basic digital access and enhancing existing channels with the depth and intelligence today’s customers expect. It’s no longer enough to offer mobile and online banking; customers now seek contextual, personalized, and frictionless experiences that add real value to their daily financial lives.
Deepening Digital Maturity in 2026
Technology in banking has reached a point where capability is no longer the challenge; maturity is. Most commercial banks already possess the tools, platforms, and data needed to compete; the real question is how effectively they use them. In 2026, digital maturity will separate banks that simply adopt technology from those that apply it to create new value, intelligence, and growth. Below are the key areas where banks must advance to move from digital adoption to true digital maturity.
Deepening Customer Relationships Through Data and Personalization
Commercial Banks now have access to enormous amounts of customer data. The real challenge lies in using this information to create meaningful experiences. When banks analyze transaction patterns effectively, they can anticipate customer needs before those needs are even expressed. Customers are increasingly open to sharing their data when it leads to more relevant, useful banking experiences, and the impact of true personalization is already measurable, as shown by statistics:
Take the example of ila Bank in Bahrain. They noticed customers repeatedly purchasing digital gift cards from platforms like Amazon and PlayStation. Instead of just observing this behavior, they built a digital card store directly within their banking app. This turned observed behavior into a new service line that generated additional revenue while meeting existing customer demand.
Personalization works across different customer segments. For business clients, banks can monitor cash flow patterns to identify seasonal working capital needs. When a company’s transactions show consistent dips during certain months, the bank can proactively offer short-term financing solutions. This approach transforms the bank from a reactive service provider to an active financial partner.
Banks are increasingly acting on this. Codebase Technologies helped Bank Audi’s neo platform integrate eSIM capabilities. This feature appeals directly to frequent travellers who need immediate connectivity upon arrival in new countries. The service aligns with customer lifestyles while generating new revenue streams for the bank.
Building Ecosystems Through Open Banking and Embedded Finance
The next phase of digital maturity is ecosystem integration – where commercial banks either embed their services into other platforms or enable others to embed within theirs. Open banking and embedded finance are reshaping how corporate and SME financial products are distributed and consumed. Instead of businesses coming to the bank, the bank now connects directly into the systems where businesses already operate – in e-commerce, logistics, procurement, ERP, and supply chain platforms.
Examples include:
- E-commerce platforms offering instant merchant and supplier financing through embedded commercial bank APIs.
- Payroll systems enabling automated salary disbursements and short-term liquidity facilities through corporate banking integrations.
- Logistics platforms providing real-time invoice factoring and freight financing from banks.
- B2B marketplaces embedding trade-finance options at checkout for bulk buyers.
- ERP systems integrating direct access to cash management, treasury, and reconciliation tools from banks.
- Corporate procurement platforms offering dynamic discounting and payment guarantees via bank APIs.
- Commercial banks integrating third-party insurance, FX hedging, and investment products within their corporate portals.
- Supply chain finance platforms embedding bank-backed credit lines and payment protection features.
- Payment service providers integrating cross-border payment rails and foreign exchange services from partner banks.
- Property and infrastructure platforms embedding bank-led project financing and escrow services through APIs.
While digitization across the region has fueled the growth of advanced enterprise and B2B platforms, the next phase is integration, where commercial banks plug directly into these digital ecosystems to power transactions, liquidity, and credit from within. The banks that succeed will be those that position themselves as core infrastructure players in digital commerce, not just service providers. Those that don’t will risk becoming background utilities in an ecosystem-led economy.
Modernizing Legacy Cores
Most commercial banks today have gone digital, but they’ve done it on top of legacy cores. The result is modern front ends running on outdated engines. These systems can process transactions but can’t deliver the true agility that digitally native players like neobanks and challengers enjoy. Launching products still takes months instead of weeks. Integrating with fintechs or ecosystem partners requires heavy customization. Scaling new services demands costly infrastructure upgrades instead of simple configuration.
Financial institutions can undergo this transformation through several proven models that vary based on risk appetite, operational readiness, and strategic objectives. Some prioritize speed and a complete break from legacy systems; others focus on controlled, phased evolution to minimize disruption. The right approach depends on how aggressively a bank wants to modernize and how much complexity it’s prepared to manage during transition. Codebase Technologies provides both consulting and technology support in implementing any of the following core modernization approaches:
- Big Bang Replacement: Full core replacement in a single migration; fastest but riskiest, requiring extensive testing and investment.
- Progressive / Phased Migration: Gradual transition by product, segment, or geography; legacy and new cores run in parallel to reduce risk.
- Digital Arm Model: A digital-first core running alongside the legacy system, enabling rapid innovation and gradual migration with minimal disruption.
- Core Wrapping / Digital Overlay: Legacy core remains but is extended with API and middleware layers for faster digital delivery; a short-term solution.
- Greenfield Core: A fully independent, cloud-native core built from scratch to enable digital-only banks or new market entries.
Tapping into the SME Segment Digitally
The SME financing gap represents one of commercial banking’s most significant failures and biggest opportunities. Globally, MSMEs face a $5.7 trillion funding shortfall. That’s equivalent to nearly one-fifth (19%) of the entire GDP across emerging markets. In these regions, about 40% of formal MSMEs are credit-constrained, with 19% fully constrained and 21% partially constrained. In the MENAP region, nearly 80% of firms rely on internal funds instead of accessing bank credit due to a lack of financial inclusion. This makes the SME financial inclusion index in the region one of the lowest globally.
However, the gap isn’t just in business financing – it extends to the banking products and experiences available for SMEs. Many business owners expect the same seamless, intuitive, and personalized banking experiences they receive as retail customers. Commercial banks in 2026 must strategically consider expanding their product portfolios and improving customer experiences for SMEs. It’s not enough to offer traditional loan products; SMEs are demanding digital tools that allow them to manage their operations seamlessly.
Through our Digibanc platform, we are enabling commercial banks to rapidly implement tailored SME digital banking solutions, both conventional and Islamic, that cater to the unique needs of business owners. This allows banks to seamlessly enhance their product offerings and improve customer experiences, positioning them for growth in the competitive SME sector.
Final Sentiments
As we look toward 2026, it’s clear that the next phase of banking will be shaped by how effectively commercial banks close the innovation and customer experience gaps that have emerged in the digital era. While progress has been made, the next leap will require more than incremental advancements. Banks must address fundamental shifts in their infrastructure to match the agility of their digitally-native competitors, such as neobanks and fintech challengers. Moreover, it’s no longer enough to simply adopt new technologies; banks must enhance customer experience through the right mix of tools, products, and personalized services that meet evolving expectations.
The strategic areas for improvement are clear, and so are the opportunities for growth and innovation. As the landscape evolves, commercial banks need to embrace the necessary shifts in infrastructure, customer experience, and digital capabilities to stay competitive. The transition from traditional banking models to more agile, customer-centric platforms will define the leaders of tomorrow. Those that can effectively integrate new technologies, build new targeted products, and deliver personalized, seamless experiences will be best positioned to thrive in 2026 and beyond.
Codebase Technologies is here to support commercial banks in the GCC and around the world to seize these opportunities. Through our Digibanc platform and local regional teams, we are empowering banks to rapidly implement tailored digital banking solutions, drive innovation and modern customer experiences, and position themselves for success in the coming year.
Tagged:
- digital banking, digital onboarding, fintech, market insights, mena
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Raheel Iqbal
Experienced Board Member with a demonstrated history of working in the financial services industry. Skilled in Business Planning, Management, Employee Training, Financial Accounting, and Product Development. Strong business development professional with a Bachelor of Science (BSc) focused in Management (Accounting & Finance) from University of Manchester - Manchester Business School.
