May 2001
Arab banks begin to modernize
More and more Arab banks accept that they must embrace the internet or risk losing share in their home markets to more technology-savvy international players. National banks see the internet as a means to realize their regional ambitions. Change is under way across the region, perhaps most notably in Bahrain, traditionally the key offshore banking centre in the Gulf. Now Islamic banking and investment banking operations are growing up and offshore banking is becoming less prominent. The country’s leading offshore and local banks are rethinking their strategies and hope to become regional players.
Internet banking is gradually gaining momentum in the
Middle East after a slow, tentative start when neither financial
institutions nor customers appeared to have much enthusiasm for the
concept.
Bankers are now divided between a minority who are pressing ahead
as rapidly as possible and a rather larger number who are
reluctantly acquiescing in an investment that they privately
consider will neither generate immediate profit nor be popular with
customers in the short term.
Internet banking has only scratched the surface of the potential
market. The service, which has been taken up by little more than a
quarter of a million customers, is available from only 18 banks in
eight countries. These are Saudi Arabia, Bahrain, Qatar, Kuwait,
the UAE, Jordan, Lebanon and Egypt.
However, several banks are planning internet strategies and are
expected to be offering the service by the year-end. The financial
conditions are right for making...
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