Saudi Arabia’s banking revenue growth will surpass that of other countries in the GCC, according to Boston Consulting Group. The kingdom’s retail banking revenue is expected to increase by 11.4% between 2021 and 2026, up from 8.7% between 2016 and 2021.
The UAE, Saudi Arabia, Kuwait, Bahrain, and Qatar collectively expect to see an 8.8% CAGR during the same period to 2026.
According to BCG, recovery in oil prices and increased interest rates are key contributors to a post-pandemic revival, boosting economic growth and consumer spending, which also said increased spending on environmental, social, governance, and sustainability is the next frontier for competitive advantage in the sector.
“Saudi Arabia has deployed hugely ambitious projects under Vision 2030. Acting as facilitators, instigators, and key actors of change for the nation will be retail banks. ESG in banking is very much a credit portfolio review, and there is a significant first mover’s advantage – whereby banks that start this activity ahead of competitors have more choice to prioritize the right clients,” said Martin Blechta, principal at BCG.
“As they consider a redirected future, retail banks must adapt to changing consumer preferences and utilize digital tools and technology to craft solutions that will fulfill customers’ needs in new and sustainable ways while advancing the overall ESG agenda,” Blechta added.
According to the study, 25% of retail banks surveyed globally indicate that ESG is a significant area of focus for their digital transformation, while another 38% say it is an important factor in choosing and prioritizing digital transformation efforts.
In addition to ESG, payments, mortgages, and deposit products are projected to propel banking revenue growth in the GCC retail banking sector throughout the five years from 2021 to 2026.
Loading the player...
Najla Al-Midfa on fueling innovation and entrepreneurial spirit