Core banking platforms are shifting from stable systems of record to real-time transaction engines expected to support regulatory responsiveness, product agility, and ecosystem connectivity. This shift is exposing the structural limits of batch-based and heavily customized legacy architectures. 

Globally, banks are adopting modular, cloud-enabled platforms to support real-time processing and incremental change. Everest Group estimates the global core banking technology market at US$14-15 billion in 2025, growing at a 10-11% Compound Annual Growth Rate (CAGR) through 2030. 

In the Middle East, modernization is shaped less by discretionary refresh cycles and more by regulator-defined mandates and national digital agendas. Regional core banking technology spend is estimated at US$0.5-0.6 billion in 2025 and is expanding as banks move toward structured platform transformation. 

Recent deployments reflect this trajectory. MIDBANK migrated to Temenos to support real-time analytics and digital onboarding. Banque Saudi Fransi modernized its payments infrastructure using Tata Consultancy Services (TCS) BaNCS™. Burgan Bank launched a new core platform with TCS BaNCS™ to enhance product delivery and operational responsiveness. These initiatives indicate a clear focus on regulatory alignment, delivery feasibility, and time-to-value in core banking decisions. 

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How core modernization is taking shape in the Middle East 

Core transformation in the Middle East is being shaped by a combination of regulatory direction, structural banking requirements, digital expectations, and execution constraints. These forces collectively influence sequencing decisions and platform selection criteria. Exhibit 1 outlines the structural forces shaping core modernization in the Middle East and how they interact to define transformation priorities. 

Exhibit 1: Structural forces shaping core modernization in the Middle East 

Together, these forces shape not only architectural decisions, but also governance models, risk appetite, and delivery approaches across the banking sector. 

A comparative lens: how the Middle East differs from global markets 

Modernization themes such as cloud adoption and Application Programming Interface (API) enablement are globally consistent. However, the drivers and sequencing in the Middle East diverge in several respects. 

In mature markets, core transformation is often driven by cost optimization and legacy rationalization. In the Middle East, regulatory alignment and structural banking requirements act as primary anchors. 

• Modernization is closely aligned with national infrastructure initiatives 
• Islamic product configurability becomes a primary platform selection criterion 
• Real-time capability is expected earlier in the transformation cycle 
• Phased and hybrid execution models are common due to capability and talent constraints 

The implication is clear: while global technology providers offer broadly similar architectures, successful deployment in the Middle East depends on alignment with regional operating realities rather than replicating global transformation blueprints. 

What changes as core modernization moves into delivery 

As programs scale, banks are adjusting their evaluation criteria. The emphasis is shifting from system replacement toward building the capability to evolve the core over time. 

Rather than waiting for a complete core transformation, banks are prioritizing initiatives that deliver near-term regulatory compliance and greater product flexibility, while allowing broader modernization to advance in phases. Expectations from core platforms are also evolving. Banks require frequent configuration changes, embedded Islamic banking logic, and seamless integration with onboarding, servicing, and national infrastructure layers. Tolerance for heavy customization and prolonged change cycles is steadily diminishing. 

Evaluation is increasingly weighted toward delivery clarity, migration strategy, and the ability to sustain ongoing change without operational disruption. Adaptability over time is becoming as important as feature coverage at selection. 

Strategic positioning: how providers can align with market expectations 

As modernization advances, banks are filtering platforms and partners less on capability breadth and more on alignment with regional operating realities. Platforms, hyperscalers, and delivery partners are evaluated on their ability to operate within regulatory constraints and sustain viability post-implementation. 

Regional providers: contextual depth as a competitive advantage  

Regional providers retain relevance, particularly among mid-tier and domestic institutions. Their familiarity with local regulatory frameworks and national infrastructure can reduce execution friction. In many cases, contextual alignment outweighs global scale.  

Exhibit 2: Global and regional core banking providers with recent Middle East deployments 

Global core banking platforms: from universal solutions to selective fit 

For global platforms, functional breadth is now a baseline expectation. Differentiation increasingly depends on localization depth and operationalization capability. 

Banks prioritize platforms that embed Islamic banking logic natively and reduce compliance-driven customization. In-region delivery presence and regulatory familiarity influence confidence. Platforms are increasingly aligned to specific segments or phases of transformation, rather than positioned as universal replacements. 

Hyperscalers: cloud adoption under sovereign guardrails  

Hyperscalers are playing a growing role in modernization, but adoption is shaped by data residency mandates, regulatory oversight, and sovereign cloud expectations. Banks favor cloud strategies aligned with national policies and supervisory models. 

Recent examples illustrate localized commitment: 

• Microsoft, United Arab Emirates (UAE): expanding hyperscale data center capacity in partnership with G42, adding over 200 Megawatt (MW) infrastructure to support enterprise and regulated workloads 
• Amazon Web Services (AWS), Saudi Arabia: launched a CloudFront edge location in Jeddah to support lower latency and localized content delivery 
• Google Cloud, Saudi Arabia: advancing plans for a dedicated Google Cloud region in the Kingdom to address local data residency requirements 
• Bank ABC – ila Bank, Bahrain: Deployed Temenos’ cloud-native core banking platform on AWS to support its digital banking operations 

These examples indicate that hyperscaler participation in Middle East core modernization increasingly depends on localized infrastructure presence and region-specific deployment partnerships. 

System integrators and consulting partners: execution assurance as a differentiator 

As programs scale, banks are placing increasing weight on execution assurance. System integrators and consulting partners are evaluated not only on delivery capacity, but also on their ability to sequence transformation, manage operational risk, and support continuity during multi-year transitions. 

Partners that can enable phased migration, limit service disruption, and transfer ownership to internal teams are increasingly preferred. Execution credibility is measured not by initial go-live milestones, but by sustained operational stability.  

Recent regional implementations illustrate this evolving role: 

• NdcTech (Systems Limited): implemented Temenos’ core banking platform for Bank ABC’s digital subsidiary, ila Bank, supporting a cloud-based deployment in Bahrain 
• DXC Technology: provided testing and implementation support for MIDBANK’s Temenos core modernization program as part of a broader transformation initiative in Egypt 

This indicates that system integrators in the Middle East are positioned not only as implementation providers, but as long-term transformation partners responsible for execution stability and managed transition risk. 

What is in store over the next 12-18 months?  

Core banking modernization in the Middle East is entering a narrow decision window. While strategic objectives mirror global trends, regulatory timelines, embedded Islamic banking logic requirements, and national infrastructure initiatives are compressing the opportunity for course correction. Over the next 12-18 months, banks will effectively lock in their future core operating models, not merely select technology platforms. The choices made during this period will determine whether banks build core systems capable of absorbing regulatory change, supporting product expansion, and integrating seamlessly with ecosystem partners, or embed structural constraints that will prove costly and complex to reverse. 

For banks, the primary risk is no longer delayed modernization; it is embedding rigidity into the next generation of core platforms. For technology providers, this phase will distinguish those equipped to enable sustained, multi-year transformation from those optimized primarily for initial implementation milestones.  

The Middle East is not following a generic modernization playbook. The region is defining a more execution-disciplined model, one in which long-term flexibility will be determined by near-term architectural and operating decisions. 

If you found this blog interesting, check out, Banking on Autonomous Agents: Embracing Agentic AI in Financial Services – Everest Group Research Portal, which delves deeper into another topic relating to banking. 

If you have any further questions and would like to discuss core banking modernization strategies in the Middle East, please reach out to Ketan Kumar ([email protected]), Kriti Gupta ([email protected]), Laqshay Gupta ([email protected]), Rakshit Gupta ([email protected]).