Gulf Banks Opt for Smaller Technology Upgrades as Digital Risks Grow

Dubai: Banks across the Gulf are changing the way they upgrade their technology, choosing gradual improvements over large-scale system replacements as they respond to growing demand for uninterrupted digital services.

The change follows a series of high-profile banking disruptions that drew attention to the risks associated with major technology projects. For many lenders, reliability has become just as important as launching new digital products.

Industry executives say banks are becoming more selective about where they invest, concentrating on services customers use every day rather than attempting to replace entire banking platforms in one move.

Digital account opening, payment services, lending platforms, customer support and wealth management are among the areas receiving priority as financial institutions modernise their systems.

Yannick Decaumont, chief executive of CREALOGIX Middle East, said banks are moving towards technology that can be expanded over time without affecting essential services.

Financial regulators are also pushing the sector to modernise.

In the UAE, work continues on programmes covering digital payments, electronic identity verification and open finance. Saudi Arabia has also expanded its regulatory framework for open banking, encouraging lenders to build more connected financial services.

These changes are increasing investment in technology, but they also present new operational challenges. Many banks continue to rely on core systems that have been in place for years, even as they add newer digital services on top of them.

Technology specialists say those mixed environments can become difficult to manage, particularly when updates are introduced across multiple systems at the same time.

Recent service interruptions have reinforced the importance of planning technology upgrades carefully. Customers now expect mobile apps, online banking and payment services to remain available around the clock, leaving little room for prolonged outages.

Rather than replacing existing systems all at once, many banks are strengthening individual platforms while improving cybersecurity, monitoring and recovery procedures.

The approach allows institutions to introduce new products without exposing their entire technology infrastructure to unnecessary risk.

For Gulf lenders, the focus is no longer on how quickly systems can be replaced. Increasingly, attention is turning to building banking platforms that remain dependable as digital services continue to expand.