Financial institutions in Saudi Arabia and the UAE, despite facing economic constraints, are leading the way in investing in artificial intelligence (AI), Banking as a Service (BaaS), and embedded finance. Finastra's 2023 global survey, titled "Financial Services: State of the Nation Survey," reveals that 87% of UAE institutions and 64% of Saudi Arabian institutions have been affected by the economic climate, limiting their technology investments. However, both regions maintain a positive outlook, with 78% in the UAE and 72% in Saudi Arabia expecting their investments to fully recover by the first half of 2024, surpassing the global average of 69%.

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Despite economic challenges, both Saudi Arabia and the UAE have emerged as global leaders in AI adoption. Saudi Arabia leads with 55% of respondents having deployed or improved AI in the last year, while the UAE follows closely at 45%, both exceeding the global average of 37%. Additionally, these regions are showing a strong interest in generative AI (Gen AI), with 88% of decision-makers in Saudi Arabia and 86% in the UAE expressing interest, and a significant portion having already incorporated it in some form. The top use cases for Gen AI differ between the two regions, with automation of manual tasks and ESG data analysis being prominent in the UAE, and ESG data analysis and IT operations enhancement leading in Saudi Arabia.

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In terms of other developments, the UAE and Saudi Arabia lead in BaaS adoption, with 49% and 53% of institutions, respectively, having improved or deployed BaaS in the last year, surpassing the global average of 48%. Both regions are excited about the pace of technological and cultural change in the financial services industry, with a strong commitment to ESG initiatives and a focus on financial literacy and supporting vulnerable audiences.

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