Pre-Iran crisis, the GCC was on a pace to outperform global growth rates. The Middle East and North Africa economies were projected to grow by 3.5 to 4 percent, compared to more than 3 percent worldwide. The GCC averaged 4.5 percent, led by Qatar, the UAE and Saudi Arabia.
“This isn’t our first crisis and it won’t be our last,” Salah Shamma, Head of investment at Franklin Templeton Investments, was quoted as saying in a recent report.
The GCC is, traditionally, an island of stability, a safe haven for capital investments, a magnet for tourism, and a robust oil and gas producer that cushions the impact of any crisis.
The banking sector plays a central role in the region’s economies, supported by government backing, strong capitalization, and abundant liquidity. Qatar National Bank and First Abu Dhabi Bank ranked among the world’s 100 largest by assets in 2025.
The sector is navigating the Iran crisis from a position of relative strength, having withstood the 2008 global financial crisis, Covid-19, and major oil price drops in the past decade. Vast sovereign wealth resources that now exceed $5 trillion across the region thwart any thought of an economic collapse.
“Through credible signaling, such as deposit guarantees, and direct interventions like liquidity support and recapitalization, SWFs can reinforce confidence and help shield the banking system from economic and financial shocks,” said Dr. Praveen Gupta, Professor and Chairperson, Manipal Business School- MAHE Dubai and Global Investment Banker.
According to S&P Global Ratings reports from early 2026, GCC banks maintained a Common Equity Tier 1 (CET1) ratio of over 16 percent as of January 2026, capital buffers that significantly exceed Basel III regulatory requirements, serving as a primary defense against geopolitical volatility and oil price fluctuations.
“The GCC continues to benefit from strong macroeconomic fundamentals, well-capitalized banking systems, and robust regulatory frameworks…as they navigate a period of heightened geopolitical uncertainty,” Bader Al Sarraf, a regional financial expert, and research analyst at Standard Chartered in Dubai, said recently.
Cryptocurrency and virtual wallets
Once the playground of speculators, digital assets like cryptocurrencies are making a statement in the payments industry as regional countries formulate their own versions of UAE’s Virtual Assets Regulatory Authority (VARA).
“Governments are backing stablecoins and encouraging government-related entities to use this technology,” Joel Van Dusen, group head of Corporate and Investment Banking at Dubai’s Mashreq Bank, maintained. “It’s forcing the banks to pay attention.”
Cross-border payments in the MENA have long been expensive, slow, and heavily intermediated.
“Stablecoins and blockchain-based options offer a credible alternative. Under the UAE’s Payment Token Services Regulation, stablecoins are treated as regulated payment instruments, with AE Coin, issued by Al Maryah Community Bank, emerging as the first fully licensed dirham-backed option in the market.” Yogesh Khairajani, Global Market Strategist, Century Financial, said.
“The GCC countries are moving towards becoming a region where digital assets are more actively and thoughtfully regulated. Bahrain introduced its own stablecoin framework in July 2025, becoming the first Gulf country to enact a dedicated standalone stablecoin regulatory framework.”
GCC-led cashless agendas accelerated the use of cards and wallets, with Saudi accounting for nearly 80 percent of retail transactions in 2025, according to Khaled Al-Dhaher, vice governor for supervision and technology at the Saudi Central Bank, also known as SAMA.
“By the end of the second quarter of 2025, the number of fintech companies operating in the Kingdom reached more than 280.”
Saudi Arabia aims to expand its fintech ecosystem to 525 active companies by 2030. The UAE recorded 329 active fintech companies at the end of 2024.
This market spans digital payments, insurtech, regtech, wealth management, blockchain, crypto, and AI financial transactions, aligning government strategic initiatives with regulatory modernism, capital abundance and a young, digitally native population boasting one of the highest smartphone penetration rates globally at nearly 99 percent.
In the GCC, instant payment platforms such as the UAE’s Aani have enabled real-time account-to-account (A2A) transfers and consumer-facing services, while Saudi’s Sarie system supports instant interbank payments at a national scale.
Banks identified payments infrastructure as a critical component of broader transformation programs aimed at addressing rapid growth in contactless payments and online commerce, a 2024 Deloitte study found.
According to market analysis by P&S Intelligence, the GCC fintech market was valued at $10.5 billion in 2025 and is projected to reach nearly $30 billion by 2032.
It estimated that GCC Digital banking would reach $12.7 billion in 2025, and would grow to reach $47.6 billion in 2032. Mobile banking held the largest market share at 55 percent in 2025 with users managing their finances via smartphones.
The GCC fintech market has the top 10 players holding around 45 percent market share in 2025, led by companies like Tabby, PayTabs Group, STC Pay, HyperPay, Sarwa, and Rain.
Investment banker Rahul Mann said in 2025 that B2C fintech transactions accounted for 50 percent market share in 2025, driven by digital payment apps, neobanks, and personal finance tools. B2B2C, meanwhile, witnessed the fastest growth at 16.3 percent thanks to embedded finance and banking-as-a-service (BaaS) platforms. The embedded finance market in the Middle East is projected to grow by 12 percent annually, reaching $33 million by 2025.
According to P&S Intelligence (2026-2032 forecast), the UAE leads the region with nearly 50 percent of banking customers maintaining accounts with digital-only banks as of early 2026
Forbes Middle East reported that MENA fintech continues to dominate startup funding. In 2025, the sector raised $1.2 billion across 178 deals, led by the UAE and Saudi Arabia, reflecting strong investor confidence even amid global VC slowdowns.
Embedded finance
The most critical shift in 2026 is the rise of embedded finance. The Capgemini World Payments Report 2026 showed that 60 percent of regional payment practitioners expect digital wallets to be the primary interface for business transactions. The embedded finance market in the Middle East is projected to grow by 12 percent annually, reaching $33 million by 2025.
Mastercard’s 2026 Payment Index reports for the UAE show that 68 percent of UAE consumers now explicitly prefer digital payments (cards or mobile wallets) over cash for everyday transactions.
Van Dusen, Group Head of Corporate and Investment Banking at Mashreq, noted in an October 2025 interview that “Instant payments are no longer a feature; they are a systemically important utility.”
Digital maturity and AI
In 2026, digital maturity will seek to create new value and growth. Enormous amounts of customer data will be geared to create personalized experiences and pre-empt customer needs based on purchasing behavior, cash needs and seasonal consumption tendencies that AI algorithms will systematically track and record.
“Technology is completely reimagining the financial services sector. CEOs are embedding AI into core operations across the industry, with automation and digital platforms now central to all sub-sectors, banking, asset management, and insurance,” Sanjay Jain, PwC Middle East Financial Services Leader, said at the company’s 29th Global CEO Survey Middle East.
The report revealed 32 percent of regional CEOs report extensive use of AI across support services, while deployment in demand generation (28 percent), products, services and customer experiences (25 percent) and strategic direction setting (22 percent) all exceed global industry averages.
For his part, Khairajani said: “The AI in banking segment alone stands at $1.5 billion, with leading markets – the UAE and Saudi Arabia – investing heavily in fraud detection, customer service automation and risk analytics as part of broader national digital visions.”
For legacy banks still banking on past practices, “the most effective path forward is a phased modernization strategy: layering new digital capabilities onto the balance sheet strength and institutional trust they have spent decades building, rather than pursuing a costly and risky overhaul.” Khairajani added. “Equally important is the fintech-partnership model – institutions that co-build rather than compete with agile fintechs are accelerating product velocity across both retail and corporate segments.”
Gupta maintains that technology adoption in the GCC often trails advanced markets, enabling banks to learn from global missteps and refine their digital strategies. He does, however, caution against a potential risk.
“Legacy institutions should modernize in-house systems while partnering with fintechs to enhance value for corporate and retail clients. However, factors such as low AI literacy, high expatriate mobility, and economic cyclicality mean credit delivery and recovery may still require traditional, cautious methods until AI-driven models fully adapt to the region’s unique dynamics.”
Insuretech
Health insurance in the Middle East is set to undergo significant transformation by 2030 as emerging technologies move from pilot initiatives to everyday implementation, according to PwC. AI-powered claims automation, blockchain-secured data systems and precision genomics are already reshaping insurer operations and redefining how individuals experience healthcare.
The GCC health insurance markets will continue to thrive driven by the expansion of mandatory coverage applied to all businesses operating in the Gulf, with population growth dictating higher compliance rates. This expansion is expected to be strongly supported by insuretech, including real-time operational platforms, gamified wellness applications and wearable-enabled dynamic pricing models for various customer segments.
For beneficiaries, this shift will translate into more personalized care and improved health outcomes, that prioritizes prevention over treatment, with technology acting as the central enabler of this evolution.
This trajectory also aligns with broader financial services transformation trends, from underwriting and credit assessment to fraud monitoring and service resolution, PwC adds, increasing automation and reducing manual intervention across front- and back-office processes.
The automation and digitalization of health services is simultaneously enabling faster processing, improved straight-through execution and more resilient payment ecosystems.
