Middle East & Africa: Embracing symbiosis to accelerate digital transformation in banking

The Middle East and Africa (MEA) banking sector is undergoing a profound digital transformation driven by shifting customer expectations, regulatory evolution, and competitive pressures from fintechs and global tech giants. Yet, legacy infrastructure remains a significant barrier to delivering the seamless, secure, and innovative banking experiences customer’s demand. In this context, symbiosis—the strategic coexistence of next-generation core banking systems alongside legacy platforms—offers a powerful solution to accelerate modernization and enhance agility while managing risk and cost.

The MEA digital banking landscape

Recent research indicates that over three-quarters of Middle Eastern banks see legacy systems as a primary obstacle to delivering expected digital experiences. Nearly half of MEA banks prioritize cybersecurity as their top strategic focus for the next three years, reflecting growing concerns about data protection amid rapid digitalization. The region’s banks are also adopting agile operating models, with more than 40% having fully embraced agility to respond faster to market changes.

In Africa, the COVID-19 pandemic accelerated digital adoption, with around 80% of banks initiating or fast-tracking digital programs to meet customer needs during lockdowns. Investments in cybersecurity, big data, AI, and cloud computing are viewed as critical enablers of this transformation. However, trusted data management remains a challenge, essential for realizing the full potential of advanced analytics and AI.

Symbiosis: Addressing MEA banks’ unique challenges

Given the complexity and risk of full core banking replacements, symbiosis provides a practical path that allows MEA banks to:

• Mitigate legacy risks: By integrating new systems for specific functions (e.g., lending, payments), banks can reduce system fragility and operational disruptions.
• Enhance customer experience: Deliver seamless, omnichannel experiences without forcing customers to navigate multiple platforms or credentials.
• Accelerate innovation: Deploy innovative, personalized products and services to rapidly capture market opportunities while maintaining compliance with evolving regional regulations.
• Manage costs and risks: Avoid the high costs and risks often associated with ‘rip-and-replace’ projects, optimizing ROI on technology investments.

Key considerations include ensuring robust cybersecurity integration, given its prominence as a top priority, and managing regulatory compliance across diverse jurisdictions in MEA. Change management is also critical, requiring stakeholder alignment and staff training to support new operating models.

Strategic opportunities in MEA

Symbiosis enables banks in MEA to harness their unique advantages—deep local market knowledge, established customer relationships, and regulatory experience—while adopting agile, scalable technology platforms. This hybrid approach supports growth initiatives such as embedded finance, digital lending, and enhanced transaction banking services, which are pivotal in the region’s evolving financial ecosystem.

Moreover, by improving data quality and integration through symbiosis, banks can unlock advanced analytics capabilities to better understand customer needs, personalize offerings, and improve risk management. Advanced analytics and AI can provide insights into customer behavior, enabling banks to tailor their services to meet individual needs more effectively. This personalization not only enhances customer satisfaction but also drives loyalty and retention.

Regulatory compliance

Navigating the complex regulatory landscape in MEA is another challenge that symbiosis can address. By integrating compliance management systems within new digital platforms, banks can ensure adherence to local and international regulations. This integration helps streamline compliance processes, reducing the risk of regulatory breaches and associated penalties. Additionally, it allows banks to stay agile and responsive to regulatory changes, ensuring continuous compliance.

Change management

Effective change management is crucial for the successful implementation of symbiosis. Banks must engage stakeholders at all levels to ensure alignment and support for new operating models. This includes comprehensive training programs to equip staff with the skills needed to navigate new systems and processes. By fostering a culture of continuous learning and adaptation, banks can ensure smooth transitions and minimize disruptions.

Future outlook

The future of banking in MEA is digital-first, with symbiosis playing a central role in this transformation. As banks continue to integrate advanced technologies with legacy systems, they will be better positioned to meet evolving customer expectations and competitive pressures. This hybrid approach not only enhances operational efficiency but also drives innovation and growth.

Conclusion

For Middle East and African retail banks, symbiosis offers a strategic modernization approach tailored to the region’s fast-evolving digital landscape and complex legacy challenges. It enables banks to innovate rapidly, enhance customer satisfaction, and strengthen cybersecurity and compliance postures—all while controlling costs and operational risks. Embracing symbiosis will empower MEA banks to compete effectively in a digital-first future and deliver lasting value to their customers and stakeholders.

By leveraging the strengths of both legacy and next-generation systems, MEA banks can create a resilient and agile banking ecosystem that meets the demands of the modern financial landscape. This approach not only addresses current challenges but also positions banks for long-term success in an increasingly digital world.

References:

¹Gary Allemann, Data management key to the digital transition of African Banks
²Publicis Sapient, Digital Transformation: What’s Next for Middle Eastern Banks?