Middle Eastern banks can cut compliance costs by 20% – Here’s how

By Gloria Methri

As regulatory complexities rise and market conditions remain uncertain, banks in the Middle East have an opportunity to significantly reduce their risk and compliance costs—potentially beyond the often-cited 20%—through strategic technology adoption, according to Finastra.

Recent market research reveals that 75% of banks globally are fast-tracking their technology transformation to enhance risk management. Olivier Morice, Principal Solutions Consultant, Treasury & Capital Markets at Finastra, highlights that Middle Eastern banks face unique operational and regulatory challenges that modern technology can help address.

“Banks in the region continue to struggle with fragmented legacy systems, manual processes, and increasing compliance burdens,” said Morice. “Integrating cloud-based platforms and employing generative AI can not only cut costs but also enhance agility and responsiveness.”

The Cost of Legacy Systems

A major hurdle for Middle Eastern banks is the complexity of legacy systems that have evolved in a fragmented manner. This inefficiency drives up operational costs and makes regulatory compliance increasingly cumbersome.

“Consolidating risk and compliance functions onto a unified platform significantly reduces manual interventions, streamlining operations while improving real-time responsiveness to market and regulatory changes,” added Morice.

Gen AI and Automation: The Game Changers

By leveraging automation and generative AI, banks can execute risk assessments and compliance checks in near real-time, moving away from traditional weekly or monthly cycles. Finastra underscores that microservices architectures and API-driven technologies further empower financial institutions to adapt swiftly to evolving regulatory demands.

“Generative AI and large language models are becoming crucial in bridging internal knowledge gaps,” Morice noted. “These technologies provide instant, context-sensitive information to employees, accelerating decision-making and compliance processes”

With increasing regulatory scrutiny and macroeconomic pressures, investing in robust treasury and risk management solutions is no longer optional but essential for regional banks.

Finastra continues to collaborate with Middle Eastern banks, helping them modernise their risk frameworks, cut operational costs, and boost agility with cutting-edge financial technology. As banks embrace digital transformation, the potential for cost savings and operational efficiency in risk and compliance has never been more significant.