Islamic Banking and their Responses to the New Wave of Digital Disruption in the Gulf Countries

This paper discusses the digitalization drive that is sweeping across the gulf banking industry and the approaches taken by the banks in the Gulf region considering this new wave of disruption. The paper has made a special emphasis on understanding how the Islamic banks of this region are responding to this digitalization wave. The study was made using secondary approaches referring to various written sources, including articles, interviews, and annual reports to arrive at his findings and conclusions. The outcome of the study indicated that the banking system in the region, in general, has adopted a three-pronged strategy for digitalization: Internal digital transformation, Establishing a digital banking subsidiary, and Standalone digital-only banks. The banks in the region will be better positioned if they follow the first two strategies since this is expected to provide the much-needed breadth to evolve as a new force within the banking space. The digitization wave can enable Islamic banks to create a platform and to bring out new products and services without compromising their principles. It can ultimately lead to establishing a gateway for new digital-based Islamic banks that could lead the development in the emerging and frontier Islamic markets of the GCC and MENA region.