Empowering emerging markets: Adapting to diverse market needs

By Raji Challita, CEO, BML Istisharat

Emerging economies are experiencing a major shift in their financial systems. A few years ago, the goal was to ‘catch up’ with global banking standards. Today, the ambition is to leapfrog ahead

Banks are being powered by digital platforms, mobile-first customers, and the growing demand for more accessible services.

For banks, this means more than upgrading old systems—it requires rethinking how to serve two very different groups: the unbanked, who are entering the system for the first time, and young, tech-savvy customers who expect smooth, app-based experiences. Outdated infrastructure cannot support both ends of this spectrum. This is where modern core banking systems become critical.

Fostering financial inclusion through strategic policies

One of the most fascinating shifts in the MENA region is the growth of Islamic banking. This model does more than replace interest with ethical alternatives – it reflects an entirely different mindset. Products such as Murabaha, Mudarabah, and Ijarah are designed around Sharia principles, but delivering them without slowing down the customer experience is a real challenge.

In markets like Saudi Arabia, Iraq, and Morocco, where Islamic finance is now mainstream, the expectation is clear: banks must be able to offer both conventional and Sharia-compliant products seamlessly within the same system. Customers will not accept a setup where their Islamic account works separately from their standard savings account or requires a different mobile app. Core banking platforms must therefore unify these services without adding complexity.

 Modular, cloud-based solutions: A game changer for emerging markets

Emerging markets face a challenge: budgets are limited, but expectations are high. This is why modular, cloud-based solutions are gaining ground. They remove the need for large upfront investments and instead allow banks to grow gradually – launching mobile services first, adding lending products later, and expanding across borders when the time is right. Such flexibility is especially valuable for smaller institutions serving rural communities or micro-entrepreneurs. The principle is clear: technology should adapt to a bank’s needs, not force banks to adapt to it.

 Tackling core banking modernisation: Not as simple as a ‘Tech Upgrade’

The biggest challenge in modernisation is cost. Replacing a core banking system is not like swapping an app is – it is closer to rebuilding the foundation of a house while people are still living inside. For smaller banks, the expense can feel overwhelming. Just as difficult is integration. The other challenge is moving decades of transaction data into a new system without disruption, which is a delicate task, and even small errors can block customers from accessing their money. To navigate these hurdles, many institutions are adopting plug-and-play systems that can be deployed quickly and scaled over time. These lighter solutions ease the transition, but they are not one-size-fits-all. A system that works well for a growing urban bank in Jakarta may not suit a rural cooperative in Morocco, where needs and customer bases look very different.

Looking ahead: A long road, but full of opportunity

In emerging markets, modernisation is about more than just improving banking – it is about opening financial access to millions who have never had it before. At its core, technology done right is not only about profit margins. It is about trust, community, and giving people a fair chance at financial security.