The financial landscape is undergoing a seismic shift, driven by groundbreaking advancements in banking technology. The global fintech market is projected to grow from $25.18 billion in 2024 to $644 billion by 2029, fueled by rising demand for faster payments, mobile-first banking, and AI-driven personalization. In 2025, digital banks are expected to generate $1.61 trillion in net interest income, while more than 77% of consumers now prefer managing their finances through mobile or desktop platforms. These shifts point to a clear reality: traditional financial models are being replaced by faster, more flexible, and software-led alternatives.
Global FinTech Market Projection:
Tools once considered experimental are now setting the standard. AI is powering real-time budgeting, fraud detection, and customer support. Blockchain infrastructure is removing delays and costs from cross-border transactions. And with open banking, third-parties are able to access and use customer data, breaking the monopoly of traditional banks. The result? Consumers are no longer tied to legacy systems or physical branches. They’re moving money, accessing credit, and investing through platforms that adapt to their needs, not the other way around.
Key Technologies Transforming Finance
There’s a reason why 2024 saw $95.6 billion in global investment across fintech. Traditional finance is too slow, too expensive, and too fragmented to meet modern demand. We’ve been hearing this for years; however, legacy systems were built for batch processing, physical branches, and rigid compliance, and simply can’t keep up with the agility required of modern banking. Today’s users expect instant payments, personalized experiences, and 24/7 access from their phones. That gap between expectation and infrastructure is where the money is going. Venture capital isn’t chasing “finance apps.” It’s backing the rebuild of financial infrastructure itself – at the protocol, data, and service layer. Some of the core technologies driving this shift include:
Blockchain
Blockchain is one of the core technologies being integrated into the next generation of financial infrastructure. We have moved far beyond crypto speculation. Banks, governments, and fintech platforms are now deploying distributed ledger systems to overhaul how transactions are recorded, verified, and settled. A global blockchain survey found that over 95 percent of banks plan to invest in the technology — not as an experiment, but as a path to operational resilience and speed.
The value proposition is clear. Blockchain eliminates reconciliation overhead, cuts out intermediaries, and creates a real-time, auditable system of record that legacy infrastructure can’t match. Globally, the fintech blockchain market is projected to grow from $2.1 billion in 2023 to $49.2 billion by 2030, at a 56.4 percent CAGR. In Asia Pacific, the curve is even steeper — from $1.9 billion in 2022 to $296.6 billion by 2030, with growth near 90 percent CAGR.
In the Middle East and North Africa (MENA), blockchain adoption is accelerating through central bank pilots, digital currency initiatives, regulatory sandboxes, and industry partnerships aimed at fast-tracking use cases. For example, we recently partnered with Fuze, a leading digital asset infrastructure provider in MENA, to help banks in the region offer regulated crypto and digital asset services as part of their core product mix.
Artificial Intelligence (AI)
AI is becoming part of the operating system of modern banking. It’s embedded in how banks assess risk, monitor fraud, optimize operations, and deliver customer experiences at scale. What in past years required full teams of analysts, hours of review, and manual intervention is now being handled by models that operate in real time, across billions of data points. Banks are deploying AI to automate underwriting, surface anomalies in transactions, and segment customers with precision. Advanced algorithms can assess creditworthiness based not just on traditional financial data, but on behavioral and alternative data sources.
The economic upside is massive. McKinsey estimates that AI could generate up to $1 trillion in annual value for the global banking sector, primarily by improving risk modelling, automating back-office processes, and enabling more personalized and timely product delivery. There are different AI models playing different functional roles across the banking sector. These include:
- Generative AI: Creates new content such as text, code, or summaries. It’s being used to draft customer communication, summarize lengthy financial reports, automate compliance documentation, and even support code generation for internal tools.
- Agentic AI: Autonomous AI agents that operate with goals and decision-making capabilities. Though still early in adoption, agentic models are showing potential in portfolio rebalancing, continuous credit monitoring, and task automation across departments.
- Predictive AI: Used to analyze historical and real-time data to forecast outcomes. Predictive models are widely applied in risk scoring, fraud detection, churn prediction, and portfolio performance forecasting.
- Conversational AI: Powers chatbots and voice assistants that interact with users in natural language. These systems are increasingly used to handle customer support, onboard new users, and guide them through complex banking tasks in real time.
- Prescriptive AI: Goes beyond predicting outcomes to recommending specific actions based on objectives and constraints. Banks use prescriptive AI for things like loan pricing optimization, credit limit recommendations, and fraud response prioritization.
Open Banking
Open banking was long praised as a game-changing initiative; however, its uptake across the world hasn’t been as fast as many initially predicted. Open Banking promised to reshape how financial data is accessed, shared, and monetized. At its core, it allows licensed third-party providers to securely access consumer banking data — with consent — through standardized APIs. This changes the competitive dynamic: banks are no longer the sole custodians of financial information. Instead, they become part of an ecosystem where value is created by how well data is used, not just where it’s stored. FinTechs are using open banking rails to build services that aggregate accounts, offer real-time credit insights, automate savings, and deliver hyper-personalized financial products. While open banking still hasn’t fully matured in many markets, it nevertheless holds great promise for change.
Here’s a closer look at the state of open banking in MENA across five leading markets:
- Bahrain
Bahrain was the first mover in the MENA region on open banking, setting the tone with early regulatory initiatives. The Central Bank of Bahrain (CBB) launched a regulatory sandbox as early as May 2017, enabling fintech experimentation. In November 2018, Bahrain implemented its initial Open Banking regulations focused on security and confidentiality. This was followed by a strengthened Bahrain Open Banking Framework (BOBF) in November 2020, which introduced new use cases, monetization opportunities, and tightened API, consent, and compliance standards. Bahrain’s collaborative approach between regulators, banks, and FinTechs has positioned it as a regional leader, fostering innovation and financial inclusion.
- United Arab Emirates (UAE)
The UAE began its open banking journey with the Dubai Financial Services Authority (DFSA) granting licenses for Account Information Service Providers (AISP) and Payment Initiation Service Providers (PISP) in April 2020, initially within the Dubai International Financial Centre (DIFC). Emirates NBD launched an API Sandbox in 2018, pioneering open banking collaboration. The Central Bank of UAE (CBUAE) has since been advancing open finance frameworks, including the Project Aperta initiative aimed at improving transparency and accessibility of digital financial services. In June 2024, the CBUAE officially issued its Open Finance Regulation, adopting a phased implementation approach. The UAE emphasizes API standardization, data security, AI integration, and is actively working on a Financial Infrastructure Transformation Program targeted for 2026.
- Saudi Arabia
Saudi Arabia accelerated its open banking efforts with the Saudi Central Bank (SAMA) issuing a formal Open Banking Policy in 2021, marking a clear regulatory commitment. The policy laid out a roadmap for implementation aligned with the Kingdom’s Vision 2030 economic diversification goals. By November 2022, SAMA published the Open Banking Framework mandating banks to provide account information APIs by the end of 2022 and payment initiation APIs by March 2023. In January 2023, SAMA launched the Open Banking Lab, a sandbox environment supporting use case development, certification, and innovation. Saudi Arabia’s approach is use-case driven, focusing on boosting cashless transactions to 70% by 2030 and fostering fintech ecosystem growth.
- Jordan
Jordan’s open banking journey formally began in December 2022 when the Central Bank of Jordan (CBJ) issued its landmark Regulating Open Finance Services instructions, requiring all banks and payment service providers to open secure APIs for Account Information Services (AIS) and Payment Initiation Services (PIS). This regulatory framework aims to foster innovation, competition, and greater financial inclusion. To build institutional capacity, the CBJ, in partnership with organizations like the Open Bank Project, GIZ, and TESOBE, conducted interactive workshops throughout 2022 and 2023 focused on API fundamentals, customer consent, and secure data sharing, preparing institutions for compliance by the end of 2023. In early 2025, Jordan reached a pivotal milestone with the approval of its first third-party provider (TPP) pilot in JoRegBox, the country’s regulatory sandbox for open banking services.
- Kuwait
Kuwait has just recently published a draft Open Banking Framework in 2025, following earlier consultations that started around 2021. The framework sets out regulatory, technical, and security standards for open banking in line with international best practices. It allows local banks and licensed Open Banking Service Providers (OBSPs) to share customer data securely, with explicit customer consent. The Central Bank of Kuwait also operates a regulatory sandbox where FinTechs can pilot open banking products, including platforms like Wolooj. This initiative is part of Kuwait’s broader “New Kuwait 2035” digitization agenda, aimed at driving .
APIs and Modular Banking Architecture
Modern finance is increasingly modular. Banks and fintechs are moving away from monolithic core systems toward architectures made up of discrete, interoperable components connected through APIs. This shift enables institutions to add, replace, or upgrade individual services without overhauling the entire technology stack.
APIs serve as the integration layer between internal systems and external providers. They enable secure, standardized data exchange and allow banks to connect to third-party services in real time. This has become foundational not only for open banking compliance but also for building flexible product ecosystems that can evolve with market demands. Financial institutions can now launch new features in weeks instead of quarters, using pre-built infrastructure components sourced from specialized providers.
This architecture supports several strategic capabilities:
- Rapid product development: Banks can integrate new capabilities (e.g., biometric authentication, transaction categorization) via APIs without building from scratch.
- Scalability and performance: Microservices-based systems isolate workloads, allowing better fault tolerance and more efficient scaling under demand.
- Vendor flexibility: Institutions can test and switch providers at the component level, avoiding vendor lock-in and promoting cost efficiency.
- Regulatory adaptability: Modular systems make it easier to implement jurisdiction-specific rules without disrupting core operations.
SaaS 2.0
This shift toward modular, API-driven architecture has accelerated the move away from legacy software delivery. Early SaaS banking platforms didn’t solve the core problem – they took outdated, monolithic systems and simply moved them to the cloud. The result was still the same: inflexible products, limited integration options, long deployment timelines, and expensive, vendor-controlled customization. These systems couldn’t meet the speed or adaptability that modern financial services demand.
SaaS 2.0 has introduced a fundamentally different approach to delivering financial services – one that is modular by design, integration-ready from the outset, and stripped of the inefficiencies that slowed down its predecessor. Instead of bundling multiple services into a fixed product, SaaS 2.0 delivers each capability as a standalone, consumable API. Features like onboarding, identity verification, payments, card issuance, and digital wallets are unbundled, allowing institutions to use only what they need and plug it into their existing front ends.
This model solves several legacy challenges. Time-to-market is shortened because institutions don’t have to build full systems or undergo heavy integration cycles. Costs are tied to usage, not licensing tiers, which helps reduce financial overhead at early stages. Most importantly, teams can move faster – launching new services in weeks, running A/B tests, and making updates without core disruptions. It also gives non-bank players a clear path into financial services. Fintech startups, telecom operators, marketplaces, and super apps can offer regulated banking features without building infrastructure from scratch.
Some of the core features of SaaS 2.0 platforms include:
- API-first delivery – Every function is exposed through APIs, enabling seamless integration with front-end applications and third-party systems.
- Granular modularity – Services are broken into distinct components (e.g., payments, KYC, card issuing), allowing institutions to deploy only what they need.
- Usage-based pricing – Clients pay per transaction or API call, aligning costs with actual usage and removing the burden of upfront licensing.
- Cloud-native infrastructure – Built for horizontal scaling, zero-downtime deployments, and multi-region availability from day one.
- Developer-centric design – Clean documentation, sandbox environments, and SDKs accelerate integration and shorten launch cycles.
- Security and compliance baked-in – Real-time monitoring, audit trails, and pre-certified workflows reduce regulatory and operational risk.
A typical example of this model in action is our Digibanc™ SaaS platform. Built from the ground up as a modular, API-first banking infrastructure, Digibanc™ enables banks, fintechs, and non-bank players to launch financial services without owning or operating core systems. Every feature, from customer onboarding and wallets to payments, credit, and compliance, is delivered as a separate, deployable component.
Clients can pick the exact services they need, plug them into their digital channels, and go live in a fraction of the time required by traditional platforms. There’s no need for a full system overhaul. Whether the goal is to launch a digital-only bank, embed lending into a consumer app, or integrate regulated payments into a telecom platform, Digibanc™ provides the backend capability, abstracting the infrastructure complexity so teams can focus on product and scale.
This approach not only reduces time-to-market and technical overhead through modular deployment and pre-integrated services – it also supports a pay-as-you-grow model that aligns costs with actual usage. Institutions can scale confidently, without overcommitting resources upfront, while retaining the flexibility to expand, adapt, or experiment as market needs evolve.
Banking–as–a–Service (BaaS)
The unbundling of banking capabilities through modular APIs has also paved the way for a broader shift, giving rise to Banking-as-a-Service (BaaS). BaaS allows licensed banks to expose their core functions – such as payments, accounts, cards, lending, and compliance – to third parties via APIs. This enables non-banks, including fintechs, retailers, and even telecom providers, to build and launch fully compliant financial products without becoming banks themselves.
Banking-as-a-Service (BaaS) has emerged as a result of the unbundling of financial infrastructure and the increasing maturity of API-based systems. It allows licensed banks to expose their core functions — such as payments, accounts, cards, lending, and compliance — to third parties via APIs. This enables non-banks, including fintechs, retailers, and even telecom providers, to build and launch fully compliant financial products without becoming banks themselves.
BaaS providers act as infrastructure enablers, abstracting away regulatory complexity and core banking operations. The third party focuses on customer experience, while the licensed entity handles the underlying banking processes. This division of responsibility has opened the door to a wave of innovation across sectors. Consumer apps can offer savings accounts, gig platforms can issue debit cards, and marketplaces can provide merchant credit — all through BaaS partnerships.
The commercial model is also evolving. Traditional revenue streams like interchange fees are being replaced or augmented by infrastructure-as-a-service pricing: setup fees, usage-based billing, and volume-based licensing. This model is attractive to both startups and incumbents because it aligns costs with scale and reduces time to market.
The global Banking-as-a-Service (BaaS) market is experiencing rapid growth, projected to reach approximately USD 74.55 billion by 2030, expanding at a compound annual growth rate (CAGR) of around 16.2% from 2022 to 2030. This expansion is driven by increasing digitalization in banking, rising demand for seamless financial services, and the widespread adoption of APIs that enable third-party developers to build innovative financial products.
BaaS thrives on partnerships that connect banks, fintechs, and technology providers to create flexible, scalable platforms delivering personalized banking experiences. For example, we recently partnered with Areeba, a leading digital payments and banking-as-a-service provider in the Middle East, to address the growing regional demand for BaaS solutions and accelerate fintech innovation. Such collaborations are essential for leveraging cloud computing, API standardization, and open banking frameworks to expand financial inclusion and deliver next-generation digital banking services globally.
Mobile Banking
Deepening mobile penetration globally is reshaping how individuals access and manage their finances. Smartphones have become the primary banking interface for millions of users — not just in urban centers but across rural and underserved regions as well. This is because of their affordability, improving internet access, and the growing availability of low-data, app-based services. In many emerging markets, smartphones are the first and only digital device users own, making mobile apps the default point of entry to formal financial systems.
In the MENA region, for instance, the majority of countries have both high internet penetration and strong mobile connectivity, creating ideal conditions for mobile-first financial services. Gulf states like Bahrain, Kuwait, Qatar, Saudi Arabia, and the UAE all report 99 percent internet penetration, with mobile connectivity rates exceeding 140 subscriptions per 100 people — indicating that many users have multiple mobile lines or devices. This infrastructure enables seamless adoption of mobile banking, digital wallets, and app-based financial services.
Other high-connectivity markets such as Jordan (92.5% internet penetration), Morocco (92.2%), and Lebanon (91.6%) are also seeing rapid adoption of mobile banking tools, particularly among younger demographics and underserved users who rely on mobile as their primary access point. Even in countries with lower internet coverage like Egypt (81.6%) and Iraq (81.7%), mobile subscriptions remain high, allowing financial institutions and fintechs to reach customers through mobile-optimized, low-bandwidth platforms.
Banking Technology Gaining Momentum
Going into the future, banking technology is expected to move from channel-based innovation to infrastructure-level transformation. The next wave won’t be defined by new apps or interfaces, but by how financial systems are architected, automated, and integrated into everyday life. Banks will shift from being service providers to becoming platforms, data utilities, and enablers of financial experiences that happen far beyond their own channels.
Below are some of the key trends shaping the next phase of banking technology:
- Autonomous Finance and AI Agents: The next evolution of banking technology will be marked by systems that act on behalf of users, not just respond to input. Autonomous finance refers to the use of AI agents that can manage financial tasks without manual initiation. These agents operate on real-time data streams and decision frameworks defined by the user, executing actions like transferring excess funds to savings or rebalancing a portfolio based on market shifts. In enterprise banking, autonomous agents are also being explored for treasury optimization, fraud monitoring, and workflow orchestration across departments.
- Invisible and Embedded Finance: Financial services are increasingly moving out of standalone banking channels and into the platforms where users already live and transact — from ecommerce apps to payroll systems and ride-hailing platforms. Embedded finance enables non-financial companies to offer services like lending, payments, insurance, and investment natively within their customer experience, using banking infrastructure delivered through APIs. The end-user doesn’t see a bank; they see a seamless financial function built into their journey.
- Central Bank Digital Currencies (CBDCs) and Programmable Money: As central banks explore the future of sovereign currency, CBDCs are emerging as a foundational layer in the digital financial system. Unlike cryptocurrencies, CBDCs are state-backed and designed to function as legal tender – combining the efficiency of digital payments with the regulatory oversight and stability of fiat currency. As of July 2025, three countries – the Bahamas, Jamaica, and Nigeria – have officially launched CBDCs, while many others are actively in pilot or development phases.
In the MENA region, CBDC experimentation is gaining momentum. Countries such as Saudi Arabia, the UAE, Qatar, Oman, and Iran have entered the pilot stage, focusing on retail and wholesale use cases.
What sets CBDCs apart from existing digital payment systems is the potential for programmable money — currency that can carry embedded rules, such as restricting how or when it can be spent. This opens up new possibilities for targeted subsidies, automated compliance, conditional disbursements, and more precise monetary policy execution. For central banks and commercial players alike, programmability introduces both a powerful tool and a design challenge: how to enable innovation while maintaining privacy, control, and interoperability.
- Cloud-native Core Banking and Infrastructure Unbundling: We also expect that going into the future, more institutions will migrate to cloud-native core banking systems that allow componentized, API-first capabilities. These systems are not only more agile but also better aligned with continuous deployment, real-time analytics, and dynamic scalability, requirements that are becoming non-negotiable in a landscape driven by always-on digital services.
Infrastructure unbundling will also enable financial institutions to adopt best-in-class capabilities across vendors, rather than relying on vertically integrated core providers. This shift will support faster adoption of innovations such as real-time settlement engines, configurable product factories, and event-driven processing — allowing banks to evolve from static product pipelines to responsive, data-driven service models.
Conclusion
The future of finance will not be defined by marginal improvements to existing systems, but by a complete rethinking of how banking technology is built, delivered, and scaled. As this transformation accelerates, the boundaries between banks, technology firms, and non-financial platforms are dissolving, giving rise to a modular, API-driven ecosystem where value moves through programmable infrastructure rather than traditional institutions.
What is emerging is not just “better banking,” but a fundamentally different model of financial intermediation — decentralized in architecture, personalized in delivery, and invisible in interface. For incumbents, this calls for reengineering legacy systems and shifting culture to operate more like high-performance software organizations. For fintechs and infrastructure providers, it means meeting the demands of compliance, resilience, and interoperability at scale. And for consumers, it means accessing financial services that are faster, smarter, and embedded into everyday digital experiences.
The next wave of banking technology will reward adaptability over asset size. Institutions that recognize this and invest accordingly won’t just keep up with the shift. They will define it.
Tagged:
- fintech, 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.
