Cedar on Banking

In the face of rising geopolitical risks, banking technology is experiencing unprecedented pressure. In this CedarView Podcast episode, we unlock how banks must adjust their technology strategies to maintain operations and mitigate new risks, including cyber threats & supply chain disruptions.We cover practical strategies for resilience, such as strengthening business continuity plans and securing payment infrastructure. The conversation also explores the growing importance of stress-testing systems for simultaneous disruptions and adapting fraud detection to new challenges. Banks that take action now to safeguard their operations will be in the best position to thrive in uncertain times. Tune in for insights on turning technology challenges into long-term strengths during times of disruption.

In this episode, we explore how geopolitical tensions in West Asia are reshaping the operating environment for banks across the region. Energy shocks, trade disruptions, and rising logistics costs are already affecting liquidity, funding, and credit flows, while sectors such as shipping, aviation, retail, and real estate face immediate pressure - creating ripple effects across bank balance sheets.We unpack how stress is emerging on both sides of banking operations: asset quality is impacted by disrupted supply chains and corporate cash-flow strain, while liabilities face volatility due to mobile deposits and shifting investor sentiment. The episode concludes with a strategic playbook for banks - focusing on liquidity readiness, digital resilience, proactive risk monitoring, and stronger client engagement to help navigate uncertainty and prepare for recovery.

Sanjiv Anand, Chairman, Cedar Management Consulting InternationalDespite being perceived as over-banked, the Middle East banking market offers significant growth opportunities across segments. Corporate banking remains commoditized in trade and contracting finance, but untapped areas such as manufacturing, treasury, and cross-border structured finance can drive higher income. Commercial banking is a hidden gem, with thousands of mid-sized businesses underserved due to weak segmentation, rigid credit policies, and organizational gaps. Retail banking continues to grow through cards, loans, and mortgages, but future gains lie in spend-led loyalty strategies and disciplined risk management. Priority and private banking present major upside given the region’s growing high-net-worth population, requiring better advisory services and tailored products. Islamic banking is a fast-growing, unavoidable opportunity through full models or Islamic windows. Channel innovation, business-enabling credit, and core banking automation are critical enablers. Banks that segment well, innovate, and execute decisively will win.

Islamic banking’s next growth phase will be driven by differentiation and innovation, not just Shariah compliance. Over the past five years, global Islamic banking assets grew 11% versus 7% for conventional banks, with expansion extending beyond the Middle East to Africa and Asia. Growth has been supported by rising customer demand, regulatory openings, and the success of Islamic “windows” within conventional banks.As the sector matures, innovation must focus on three areas: customer segmentation, product bundling, and technology. Effective segmentation goes beyond religion or income to include demographics and lifestyle needs. Product innovation increasingly relies on Shariah-compliant bundling such as loyalty, balance-based, demographic, and family bundles—often supported by partnerships with utilities, travel, or telecom providers. Technology is the strongest enabler, particularly omnichannel capabilities that ensure seamless experiences across conventional and Islamic platforms. Ultimately, innovation must enhance customer experience while remaining compliant, reaffirming that sustainable growth in Islamic banking is firmly customer-led.

Omnichannel banking is a cross-channel strategy that delivers a seamless, consistent customer experience across physical and digital touchpoints, improving service quality while reducing costs and boosting profitability. Unlike multichannel models, omnichannel integrates channels and customer data, allowing customers to start and complete journeys such as loan applications—across branches, mobile, online and emerging devices. Adoption accelerated in the 2010s and was fast-tracked by COVID-19, which drove rapid digital uptake and reduced branch usage globally.Digital and hybrid customers now dominate across regions, pushing banks to rebalance physical and digital channels rather than eliminate branches. Data analytics is central to designing and managing omnichannel journeys. While retail banking leads adoption, corporate banking is catching up, especially in transaction banking, cash management and ERP integration. Open banking and regulations such as PSD2 are creating new opportunities, particularly for corporates willing to pay for analytics-driven, value-added services. Ultimately, omnichannel enables tailored journeys that enhance customer experience and profitability across retail and corporate banking.

Many banks fail to fully realise the potential of their credit card businesses because they overlook fundamentals while chasing best practices or technology upgrades. Experience across mature and developing markets shows that poor execution—such as undifferentiated products, fragmented portfolios, weak risk–reward balance, and lack of coordinated strategy—undermines performance, even after heavy investments. Successful credit card businesses rest on five basics: strong organisational ownership and alignment; effective, incentivised sales across channels; relevant and differentiated products; balanced, analytics-driven risk management; and continuous customer lifecycle communication beyond acquisition. Common failures include weak strategic prioritisation, siloed functions, bland or misaligned offerings, overly conservative or disconnected risk policies, and neglect of post-issuance engagement. Banks that get these basics right create a stable foundation for innovation, profitability, customer retention and sustainable growth; those that don’t risk underperformance and wasted investment.

Treasury has evolved from a back-office role into a strategic, value-adding function as banks face complex investment products, tighter regulations and changing business models. Beyond managing liquidity and returns, treasury is now expected to strengthen risk management, transparency and decision-making—expectations heightened after the financial crisis. Reliance on spreadsheets and homegrown tools has proven inadequate, driving demand for robust Treasury Management Systems (TMS) that enable real-time integration with banks, vendors and customers.Key drivers of treasury technology transformation include automation and integration with core banking and ERP systems, globalization requiring SWIFT connectivity, increased outsourcing and SaaS adoption, stricter regulations such as FATCA and FBAR, and growing needs for analytics and data management. However, selecting the right TMS alone is insufficient. Successful transformation requires strong program execution through integrated planning with other initiatives, a well-defined scope, effective governance involving finance and risk teams, and structured change management. Alignment with the bank’s operating model, clear prioritization and disciplined program management are critical enablers of success.

Post-2008 regulations, evolving markets, and new technologies have fundamentally reshaped treasury functions. Heightened focus on liquidity, capital, and risk driven by Basel norms has made liquidity costlier and elevated the treasurer’s role from cash management to a strategic driver of balance-sheet growth, risk control, and regulatory compliance.Treasury processes now emphasise integrated platforms that enable real-time risk assessment, automated reconciliation, straight-through processing, and advanced ALM, with many banks running ALM as a profit centre.People capabilities have evolved accordingly: treasury is no longer a cost center but a central, strategic function working across business lines and geographies, often operating from centralized hubs to optimize costs and collateral.Technology underpins this shift, replacing fragmented legacy systems with data-driven, automated treasury platforms. AI, analytics, RPA, blockchain, APIs, and cloud are increasingly used for forecasting, settlement, compliance, and efficiency. Ultimately, treasury’s success lies in delivering value by optimizing liquidity, managing risk, and strengthening profitability.

Core banking transformation is often compared to changing an aircraft engine mid-flight, as banks must replace their core systems without disrupting live operations or customer experience. Successful implementation depends on disciplined execution across multiple critical phases. The journey begins with rigorous programme planning, defining activities, dependencies, milestones, ownership, timelines, and communication to ensure a single, aligned plan. Customisation must be tightly controlled, limited only to regulatory, regional, or high-impact needs, as excessive tailoring increases risk. Data migration is a long, complex track requiring multiple mock runs to ensure accuracy and a smooth final cutover. Parameterization captures each bank’s unique products, processes, and accounting nuances within the system. Testing is the defining phase, encompassing system integration, user acceptance, performance, and security testing. Training is equally critical, focusing on both learning the new system and unlearning old practices through hands-on simulations. Finally, go-live readiness must be objectively assessed, as long-term success depends on post-implementation user experience, not just a smooth cutover.

Recent large-scale frauds linked to SWIFT transactions highlight hidden operational vulnerabilities in banks and the urgent need for stronger risk controls. SWIFT is a global messaging platform used by banks to facilitate cross-border payments, with transactions executed either through straight-through processing (STP) from core systems or via manual postings on SWIFT terminals. While STP reduces fraud risk, system errors can cause incorrect transactions; manual postings limit access but heighten fraud risk. In practice, banks use a mix of both, creating exposure to erroneous or fraudulent transactions. To minimize these risks, banks must go beyond system integration and adopt robust process, organizational, and compliance controls. Eight key principles are critical: automated workflows, strict access controls, multi-level approvals, job rotation, clear authority matrices, fraud analytics, limit management, and regular audits. A holistic operational risk framework is essential to safeguard high-value SWIFT transactions.

Islamic finance has gained global attention for its risk-sharing, ethical principles, especially after recent financial crises. Islamic banking operates through pure Islamic banks, Islamic subsidiaries of conventional banks, and Islamic windows. While GCC Islamic banks once outpaced conventional peers, growth has slowed due to volatile oil prices and weaker regional economies, with market share largely stagnating. Despite this, modest growth is still expected.The COVID-19 pandemic impacted Islamic finance more deeply than earlier crises because of its higher exposure to SMEs, microfinance and retail customers. Islamic social finance tools such as zakat, waqf and sukuk can support crisis response and recovery. Regulatory standardisation is improving through global bodies like AAOIFI and regional initiatives such as the UAE’s Higher Sharia Authority. Innovation is accelerating via digital banking, fintech and blockchain-based solutions. Looking ahead, the strongest growth potential lies in Muslim-majority countries, supported by consumer education, regulatory clarity and political commitment.

Selecting an Islamic core banking system is more complex than choosing a conventional platform due to Sharia-specific requirements and regional variations. A structured “4D approach” helps banks identify the best fit.First, Define needs through a detailed Business Requirement Specification covering Islamic asset and liability products, profit calculation methods, Sharia rules, and core banking functions, prioritized as critical, good-to-have and nice-to-have.Second, Determine the shortlist by aligning vendor capabilities with the bank’s context—pure Islamic bank, dual conventional-Islamic model, or Islamic window—while assessing regional presence and proven references.Third, Deep-dive evaluation and commercials validate functional claims across Islamic products, AAOIFI compliance, technology architecture, scalability, and vendor strength through detailed demonstrations.Finally, Delve into contractual details, focusing on implementation capability, contractual flexibility, total cost of ownership, and senior-level commitment from the supplier.Ultimately, success depends on aligning functionality, technology, vendor credibility, and long-term partnership commitment.  

SMEs are vital to the global economy but remain underserved in bank lending due to the unique nature of their credit risk. Unlike large corporates, SME risk is primarily promoter-driven, making traditional corporate credit frameworks ineffective. SME lending requires a volume-led, specialized risk model that assesses the obligor rather than just the facility, blending borrower behavior, cash flows and sector risk.A robust SME credit strategy rests on five pillars. First, borrower assessment focuses on promoter quality, industry context and cash-flow analysis rather than audited financials. Second, underwriting norms combine borrower scores and collateral to define risk tiers, driving pricing, tenor and approval rules. Third, streamlined credit processes emphasize fast turnaround, simplified documentation and automation. Fourth, a dedicated SME risk organization separates policy, appraisal and portfolio oversight to balance speed and control. Finally, proactive portfolio monitoring using analytics enables early risk detection, restructuring and regulatory compliance.Ultimately, SME credit success depends less on exposure size and more on accurately identifying and managing whom the bank lends to.

Turbulence in U.S. credit markets is expected to reduce the size and number of private equity (PE) deals in developed economies, as debt for leveraged buyouts becomes scarcer. Despite this, PE continues to face a surplus of capital chasing fewer attractive deals, driven by fewer undervalued companies and limited growth opportunities in mature markets. While Asia and other emerging regions account for a small share of global PE activity, their large economies and higher growth rates present long-term potential. However, expansion into these markets is constrained by limited reliable information, weak regulatory oversight, scarcity of experienced local management talent, and underdeveloped exit mechanisms. Overcoming these barriers requires deeper local knowledge, primary data-driven due diligence, access to strong local management networks, and carefully planned exit strategies that account for regulatory volatility. Going forward, PE activity is expected to shift toward smaller, niche international deals, with firms adapting their due diligence models to better manage emerging-market risks.

Rising regulatory scrutiny has made compliance costs a major challenge for banks, with global fines exceeding €211 billion since the financial crisis and regulations continuing to expand. Banks must balance shareholder expectations with stricter compliance, often while facing competition from less-regulated players. To manage costs proactively, three imperatives stand out. First, compliance should be embedded into day-to-day processes rather than treated as a siloed function, reducing duplication and staffing overheads. Second, banks must effectively manage and leverage data: robust data architecture, granular reporting, and RegTech tools enable faster, more accurate compliance, while data masking protects privacy and reputation. Third, advanced use of data, AI, and analytics can transform compliance into a competitive advantage by automating low-value tasks, improving governance, and freeing resources for meaningful risk mitigation. Banks that adopt a proactive, technology-enabled compliance approach can reduce surprises, strengthen resilience, and ultimately enhance enterprise value.

Corporate banks face shrinking margins from global slowdown, trade tensions, and rising risk costs, making digital transaction banking a key growth lever. Digitizing corporate transactions reduces cost per transaction while improving speed, accuracy, and client experience. Cash management, trade finance, and supply chain services already dominate global transaction banking revenues and continue to grow. Banks are responding by investing in modern GTB platforms, choosing between lean portals, persona-based GTB portals, or fully integrated end-to-end platforms depending on scale and strategy. Key trends include persona-based experience design, personalized dashboards, and customer journey optimization to drive digital adoption. Banks are also building smart, segment-specific digital onboarding solutions and modernizing architecture using microservices, APIs, and app-based models to enable omnichannel delivery and new revenue streams. A major shift is toward self-service and self-administration models, where corporates manage users, entitlements, and workflows themselves—cutting operational costs by up to 25–30% while improving efficiency and scalability.

Open Banking, driven by PSD2, is transforming banking from a closed, protected model into an open, platform-based ecosystem where customer data is shared securely with third-party providers via APIs. This shift creates both disruption and opportunity. Banks must move beyond compliance and rethink revenue models, customer segmentation, product strategies, and technology architecture. Revenue growth will depend on API monetization and service adoption. Customers will be served through highly personalised micro-segments, enabled by modular, API-driven offerings. Products and services will increasingly be co-created with fintech partners, while some banks may also act as aggregators or third-party providers themselves. Technologically, banks need API platforms, developer portals, sandboxes, and secure, partner-friendly architectures that balance openness with security. Open Banking is expected to create digital marketplaces that improve agility, innovation, and time to market. Ultimately, success in Open Banking hinges on delivering superior customer experience in a collaborative ecosystem.

Business Process Re-engineering (BPR) is the only approach that can deliver rapid, dramatic, and lasting performance improvements, but success depends on strategic execution. Effective BPR starts with a holistic, customer-backward view of the enterprise, focusing on value rather than isolated departmental fixes. Organizations must target “addressable” costs, eliminate low-impact processes, prioritize high-value changes, and address root causes instead of symptoms. Breaking processes into granular steps, validating assumptions with data, and balancing impact against implementation effort are critical. Change must be sequenced carefully, avoiding excessive simultaneous disruption and over-reliance on technology that automates flawed processes. Success also hinges on strong ownership through participative change management to overcome resistance and sustain improvements. Finally, redesigned processes must be continuously reviewed and adapted to changing business contexts. BPR is not a one-time fix, but an ongoing discipline to remain competitive in a dynamic marketplace.

Banks face five core IT challenges: making IT strategically relevant and customer-centric, improving returns on IT spend, enabling next-generation banking, aligning applications and infrastructure with enterprise vision, and building strong IT capabilities. However, IT strategy succeeds only through disciplined execution. The Balanced Scorecard (BSC) provides a practical framework to translate IT strategy into action by linking financial and non-financial objectives with measurable outcomes.An effective IT scorecard is built in four steps. First, articulate 20–25 clear IT objectives across customer, financial, process, and learning & growth perspectives, forming a coherent strategy map. Second, define meaningful lead and lag measures with well-calibrated targets to manage and communicate performance. Third, align and prioritize IT projects so that every initiative directly supports a strategic objective, with clear quality, time, and cost metrics. Finally, assign singular ownership and align individual performance measures with enterprise goals.When reviewed monthly and actively used by leadership, the IT Balanced Scorecard drives accountability, sharper execution, and sustained IT performance.

Banks often assess performance mainly through financial results, which are lag indicators and do not reflect long-term sustainability. A balanced scorecard for banks must therefore integrate financial and non-financial objectives across four perspectives: financial, customer, process, and learning and growth.An effective bank scorecard rests on four building blocks: creating a strategy map, defining the right measures, aligning initiatives to objectives, and assigning clear ownership. The strategy map balances short- and long-term priorities across business segments, clarifying financial goals, customer value propositions, process excellence, and organizational capabilities.Measures must combine lead and lag indicators using ratios, monetary values, and survey-based metrics tailored to banking, with targets ranging from realistic to breakthrough. Strategic initiatives such as cost efficiency, digital channels, process improvement, human capital development, and technology transformation must directly support objectives.Finally, clear, singular ownership aligned to individual performance ensures accountability. When embedded in monthly management reviews, the balanced scorecard becomes a practical tool for sustained enterprise performance.

Alternative and peer-to-peer (P2P) lending has matured into a permanent part of the financial ecosystem, with the market projected to exceed $70 billion. Growth has been strongest in SME lending, driven by digital players using advanced analytics, low-cost customer acquisition, simplified processes and AI-driven credit models. Regulatory burdens and compliance costs have further enabled non-banks to gain market share.For banks, the strategic choice is whether to compete, collaborate or co-exist. Collaboration includes partnerships where banks leverage P2P platforms’ data, underwriting and customer acquisition capabilities. Co-existence models involve white-label lending or banks purchasing portfolios of P2P loans to diversify assets. Competition sees banks building or acquiring digital lending platforms and hybrid marketplaces.With consolidation inevitable among alternative lenders, banks must either partner or build capabilities organically or through acquisitions. Adopting multi-channel digital lending, automation, AI-driven credit assessment and agile operating models will be critical. Proactive engagement, rather than resistance, will determine long-term relevance.  

Sanjiv Anand, Chairman, Cedar Management Consulting InternationalThe Covid-19 pandemic has created unprecedented challenges for banks, severely impacting profitability, asset quality, liquidity, fee income and customer behavior across retail, SME, corporate and wealth segments. Falling interest rates, stressed sectors, rising NPAs, shrinking deposits and declining branch usage have disrupted traditional revenue and cost models, making “business as usual” untenable.Yet, this crisis represents a once-in-a-lifetime opportunity for banks to accelerate digital transformation. Banks must rapidly reassess sector exposures, re-segment clients, strengthen workout and credit risk teams, redesign scorecards, and protect liability books. A sharp focus on digitizing transaction banking, especially for SMEs and corporates, is critical to retaining customers and unlocking value.Digital channels, cloud, cybersecurity, automation, AI and FinTech partnerships can drive resilience, efficiency and customer engagement. Ultimately, banks must rethink their operating and cost models from the ground up, embracing zero-based budgeting and digital-first strategies. Those that act decisively can emerge stronger, while laggards risk losing relevance.

Modern banking success depends not just on customer segmentation but on delivering differentiated, high-quality experiences. Traditional segmentation by wealth or income Mass Retail, Affluent, HNI and Ultra HNI remains relevant, but banks are increasingly complementing this with demographic, behavioral and micro-segmentation driven by advanced analytics. Understanding customer preferences, transaction behavior and life-stage needs enables more precise, predictive engagement.The HNI segment, comprising around 17 million individuals globally, is especially valuable due to its stability, deposit strength and fee income potential. While wealth management remains central, service differentiation and experience are decisive. Customers increasingly expect advisory-led, holistic offerings supported by seamless omnichannel access and digital tools.FinTech disruption and generational wealth transfer from Baby Boomers to Millennials are accelerating the need for personalized, digital-first engagement. Hygiene factors such as mobile banking, PFM tools and integrated channels are no longer differentiators; their absence is more noticeable than their presence. Banks that anticipate changing needs, leverage data intelligently and adapt experiences quickly will sustain profitable growth in the new age.  

In this episode, we turn to Saudi Arabia and examine how its banking sector is evolving alongside the Kingdom’s broader economic transformation. We discuss how Vision 2030, rising non-oil growth, and strong regulatory support are accelerating the shift toward a digital-first, cash-light economy.The conversation highlights the strength of Saudi banks, which combine solid capital positions and low credit stress with rapid growth in lending and digital adoption. We explore how online banking, real-time payments, and mobile wallets are becoming mainstream, supported by major investments in digital infrastructure and cloud platforms.We also unpack the key technology themes shaping KSA banking today—open and embedded finance, fintech collaboration, SME-focused innovation, and growing use of AI to enhance customer experience, underwriting, and fraud prevention.The key takeaway is clear: future-ready banks in Saudi Arabia will win by pairing scale and stability with digital agility, AI-led personalization, and ecosystem-driven growth.

In this episode, we look at Kuwait’s banking market and how it is steadily moving toward a digital-first, cash-lite future. We discuss how near-universal internet access, strong central bank support, and widespread use of mobile payments are accelerating the shift from cash and branches to digital channels.The conversation explores Kuwait’s evolving payments landscape, where instant payments and modern POS and wallet ecosystems are reshaping everyday transactions. We also examine the growing opportunity in digital banking, particularly among younger, mobile-first customers and underserved SME segments, where seamless onboarding, simple lending, and value-added services matter most.A major theme is the role of AI—improving personalization, automating back-office processes, strengthening fraud prevention, and enabling smarter decision-making. We close with a clear takeaway: Kuwait’s future-ready banks will be those that combine trusted payment rails, intuitive digital experiences, and AI-led efficiency to unlock growth in a rapidly digitising market.

In this episode, we focus on the UK and how it continues to shape the future of digital banking through regulation-led innovation and strong fintech adoption. We discuss why the UK remains a global financial services leader, even in a low-growth environment, driven by widespread digital banking usage, a vibrant fintech ecosystem, and early adoption of open finance.The conversation explores how neo banks and personal finance platforms are redefining customer expectations, while open finance APIs enable smarter lending, payments, and data-driven services. We also dive into the growing role of generative and agentic AI—powering fraud prevention, personalised financial advice, and operational efficiency at scale.We close by examining the UK’s biggest challenge and opportunity: modernising legacy operating models to combat rising fraud and complexity. The key takeaway is clear—future-ready UK banks will win by combining AI, open finance, and ecosystem-driven platforms with stronger accountability, agility, and customer-centric design.

In this episode, we explore how Southeast Asia is fast becoming one of the most dynamic digital banking regions globally, with Singapore at the centre of innovation. We discuss how strong economic fundamentals, deep digital adoption, and sustained fintech investment have helped banks across the region modernise while remaining resilient and well-capitalised.The conversation highlights a rapidly evolving landscape shaped by digital-only banks, superapps, and real-time payments, alongside growing adoption of open finance frameworks that enable secure data sharing and cross-border connectivity. We also examine how AI is being deployed to strengthen fraud prevention, improve risk management, and personalise customer journeys at scale.We close by looking at what change really means for banks in Southeast Asia: moving away from slow, siloed operating models toward agile, cloud-native, and API-driven architectures. The key takeaway is clear—future-ready banks in the region will win by combining collaboration, speed, trust, and technology-led customer focus.

In this episode, we focus on the UAE and how it has emerged as the most digitally advanced banking market in the region. We discuss how a diversified, non-oil economy and sustained population growth have created the right conditions for a fast-scaling financial sector, with banks expanding rapidly and outperforming many global peers on efficiency and returns.The conversation explores the forces reshaping UAE banking today: the rise of digital-only banks, real-time and contactless payments becoming mainstream, and AI-driven personalisation transforming how customers interact with financial services. We also examine how open banking APIs are moving beyond experimentation to power embedded finance, SME solutions, and new revenue models.We close by looking at the UAE’s forward-leaning approach to digital assets and currencies, and what this means for trust, innovation, and scale. The key takeaway is clear—the UAE’s bank of the future is digital-first, AI-led, open by design, and built to deliver seamless, personalized experiences at speed.

In this episode, we turn our focus to Bahrain and how it is positioning itself as one of the most progressive digital banking markets in the GCC. We unpack Bahrain’s economic shift away from oil toward financial services, and how this transition is reinforcing innovation across banking, regulation, and customer experience.The discussion highlights the strength of Bahrain’s banking system, where solid balance sheets, growing Islamic banking, and improving operational efficiency are creating a stable foundation for transformation. We then explore the technology themes defining the market—open banking moving from regulatory compliance to commercial opportunity, AI-driven personalisation reshaping customer engagement, and national digital identity and eKYC frameworks accelerating fully digital journeys.The episode also looks at how lending is evolving through faster approvals, SME digitisation, and closer fintech collaboration. We close with a clear takeaway: Bahrain’s “bank of the future” will be built on AI-led automation, agile delivery, open APIs, and data-driven decision-making—balancing innovation with trust, regulation, and scale.

In this episode, we turn to Oman and explore how its banking sector is evolving as the economy steadily diversifies beyond oil. We discuss how Vision 2040, infrastructure investment, and regulatory reforms are creating new momentum for private financing, SMEs, and Islamic banking.The conversation highlights a resilient banking system, where strong capital buffers and disciplined cost structures are supporting steady growth, even as liquidity tightens. We then dive into the technology shifts shaping Oman’s financial future—AI-led automation improving credit, compliance, and fraud management; digital-only banking gaining pace under a clear regulatory framework; and open banking APIs unlocking collaboration between banks and fintechs.We close by looking at what change really means for Omani banks: moving toward digital-first operating models, AI-powered customer experiences, and ecosystem-driven innovation. The key takeaway is clear—Oman’s future-ready banks will balance stability with agility, using technology to scale inclusion, efficiency, and trust.

In this episode, we explore how banking is being reshaped globally and in India as technology, regulation, and customer expectations collide. We look at why global banks are financially resilient, yet under pressure to modernise faster, and how trends like generative AI, open banking, embedded finance, and cloud-native cores are redefining scale and speed.The conversation then shifts to India’s banking story one driven by deep digital adoption, expanding financial inclusion, and a rapidly maturing fintech ecosystem. Private and public sector banks alike are showing stronger balance sheets, better risk discipline, and improving productivity, while fintechs are pushing innovation in payments, lending, and customer experience.We close by discussing what truly defines a “bank of the future”: shorter idea-to-execution cycles, AI-led automation, data-driven decision-making, and open, API-ready platforms. The message is clear banks that combine agility, technology, and customer-centric design will be best placed to lead the next phase of financial services transformation.

Islamic finance is a Sharia-compliant financial system rooted in principles developed over 1,400 years ago from the Quran and Sunnah. It emphasizes ethical, interest-free, and socially responsible finance. Core principles include the prohibition of interest (riba), avoidance of excessive uncertainty (gharar) and gambling (maysir), risk sharing, asset-backed transactions, transparency, and investment only in permissible (halal) activities. Returns must be linked to real economic activity, and profit is allowed only when risk is shared.Islamic banking replaces loan-based models with trade- and investment-based structures. Sale-based contracts include Murabaha (cost-plus sale), Salam (forward purchase), Ijara (leasing), and Istisna (manufacturing or construction finance). Investment-based contracts include Mudaraba (profit-sharing between capital provider and manager), Musharaka (equity partnership), and Wakala (agency-based investment).Strong Sharia governance underpins the system, involving Sharia boards, auditors, and standard-setting bodies such as AAOIFI and IFSB. Together, these structures enable Islamic finance to align financial activity with ethical conduct, fairness, and real asset creation.

Sanjiv Anand, Chairman, Cedar Management Consulting InternationalThis year is your critical breakout moment to embrace AI and full digital transformation. With global net income rising, you must transition to AI-driven customer acquisition, credit, and instant delivery to remain competitive. You should clearly define your target audience and tap into the "gold mine" of underserved SME banking through improved credit assessment models.To succeed, you must simplify product offerings and balance digital efficiency with strong relationship management to avoid becoming a generic commodity. You should strive for a "100% digital" goal aiming for account openings in under four minutes supported by AI-powered cross-sell engines that can reduce acquisition costs by 50%. Finally, building a performance-oriented culture with clear accountability is essential, as even a digital bank requires a motivated, tech-savvy workforce to execute a successful strategy.

In this episode, Chetan Parekh from Cedar Consulting emphasizes that transaction banking has become a top priority for corporate banks. As low interest rates shift revenue from interest to fee income, banks are targeting a $1 trillion global opportunity. To improve profitability, banks must lower their cost-to-income ratios by choosing to be market disruptors rather than being disrupted. Parikh suggests two paths for innovation: building agile platforms release-by-release with fintechs, or partnering with large tech companies to prioritize existing platforms. Key innovation priorities include replacing traditional systems with B2B APIs and developing dedicated SME platforms. These platforms should feature straight-through onboarding via digital signatures and API integration with official registries. Furthermore, creating an "SME ecosystem" allows for diverse use cases like working capital finance and invoice discounting. Ultimately, Parikh advises banks to adopt an agile approach with fintech partners to deliver unique user experiences and dashboards, which will effectively boost revenues while significantly reducing operational costs.

A digital core banking system is essential for banks to innovate faster and respond to evolving customer expectations for personalized, efficient, and digital-first services. While many banks have launched modern apps and websites, true digital transformation cannot be achieved at the channel level alone. It requires digitization across the entire bank, anchored by a modern digital core.A future-ready core banking platform should follow key principles: a “hollow core” that functions primarily as a system of record with minimal customization; a componentized, modular architecture that allows selective deployment and upgrades; microservices that are independently deployable, cloud-native APIs enabling agility with minimal disruption; cloud readiness to improve scalability, security, availability, and cost efficiency; and open banking APIs to connect banks with fintech ecosystems.Together, these principles reduce reliance on legacy systems, support faster innovation, and enable banks to compete in an ecosystem where many customer interactions and transactions will increasingly occur through fintech and third-party platforms rather than traditional bank-owned channels.

Sanjiv Anand, Chairman, Cedar Management Consulting InternationalThere is growing global concern that bank CEOs and CFOs are excessively paid, prompting closer review of executive compensation practices. Analysis of leading banks shows that relying solely on short-term financial performance to assess executives is flawed. Banks must balance financial and non-financial measures, such as digital transformation, which strongly influence medium- to long-term success. Poor target setting, especially overly aggressive goals, can encourage risky behavior, particularly in lending, driven by bonus and stock option incentives.Compensation assessment should be comprehensive, including fixed pay, variable pay, and stock options. In some markets, regulators historically focused too narrowly on fixed compensation, overlooking the significant wealth created through equity gains. Vesting periods for stock options are critical: they should begin after two to three years and extend over three to four years to align rewards with sustained performance and risk outcomes. Strong malus and clawback provisions are also essential to recover pay if performance later deteriorates.While pay-for-performance is necessary, boards must ensure fairness, rationality, and responsible compensation multiples across the organization.