Qatar's banking sector leading in fintech adoption

05/09/2025 03:52 AST

Qatar's banking sector stands to benefit from the country's strategic vision - the Third National Development Strategy (NDS-3) for 2024-30, which prioritises financial services for future development and diversification.

The sector is embracing financial technology (fintech) adoption, and a host of new banking services. Carlos Teixeira, Head of Business Dev and Strategy, Lending at Finastra, in an interview with The Peninsula highlighted the banking and fintech outlook for Qatar and the region's economic growth.

Qatar is well positioned to become a leading centre of financial innovation. By prioritising customer-centric approaches and digital innovation, banks in the country have solidified their position as leaders in digital development. The country has established initiatives to foster a strong and sustainable fintech ecosystem.

The country has been following the Qatar National Vision 2030 long-term development plan, which outlines the objective of economic diversification, with financial services - including banking - playing a pivotal role in this endeavour.

Teixeira noted that Qatar's financial sector is entering a new phase of strategic growth as it is aligned with the national priorities. The QCB's regulatory framework for digital banks is a clear signal: the future of finance will be digital, inclusive, and innovation led.

The role of financial services in supporting small and medium-sized enterprises (SMEs), trade, and infrastructure development continues to expand. With regional economic integration growing, Qatar is well-positioned to act as a key node in the broader GCC financial network. The direction is clear. This is about building a next-generation financial ecosystem that serves both economic ambition and social progress, he added.

In Qatar and across the GCC region, "we are seeing a paradigm shift: banks are transforming their operating models to be data-driven, cloud-native, and AI-augmented. AI adoption has surged as it plays a pivotal role in reshaping customer engagement, risk management, and product innovation."

SMEs play a central role in MENA economies, yet many remain underserved by formal financial systems. According to the International Finance Corporation (IFC), 40% of formal micro, small, and medium enterprises (MSMEs) in developing countries face unmet financing needs amounting to $5.2 trillion annually. This is equivalent to 1.4 times the current level of global MSME lending. In the MENA region, the finance gap is particularly high, at 88% of potential demand.

"Banks often face structural challenges in addressing this gap. Legacy infrastructure, high servicing costs, increased credit risk, and fragmented data make it difficult to assess SME creditworthiness and process loans efficiently. As a result, many SMEs rely on internal funds or informal sources to finance growth and operations," Teixeira commented.

According to Finastra's 2024 Financial Services State of the Nation Survey, 87% of financial institutions globally see improving access to finance as part of their responsibility. The report highlights growing adoption of cloud-native platforms, API-based architectures, and AI.

"Adopting a simplified servicing approach in lending is becoming a strategic priority for banks to better serve SMEs," added Teixeira.

"By automating workflows, applying data analytics, breaking down silos and integrating digital channels, banks can reduce costs, improve credit assessments and processing times, reduce risk and deliver more tailored, responsive support."

Teixeira further highlighted that simplified and scalable servicing models also present a commercial opportunity. Banks can serve more SMEs profitably, compete more effectively with fintechs and private credit providers, and unlock new revenue streams. At the same time, expanding access to credit allows banks to contribute meaningfully to closing the finance gap and supporting economic resilience across the region.

To extend their reach and improve efficiency, banks in the region are also partnering with fintechs and third-party providers via digital ecosystems. These collaborations can, for example, improve risk modelling, access to alternative data sets, and processes for credit assessments. This, in turn, allows financial institutions to expand access to credit while maintaining prudent risk controls, he added.