The Banking Executive Issue - October 2025 Issue

2025 IMF–World Bank Meetings the top tier of the AI Preparedness Index underscored this positioning. In Washington, MENA officials par- ticipated in sessions on fintech, digi- tal payments and DPI, highlighting: • Rapid growth of instant payment systems and digital wallets in the GCC and parts of North Africa; • Use of digital platforms for MSME finance, including supply-chain fi- nance and marketplace lending; • Regulatory sandboxes and innova- tion hubs that allow experimenta- tion while managing risks. The UAE, for example, showcased progress in fintech partnerships and digital sukuk issuance, aligning these with broader sustainable-finance and financial-inclusion objectives. For banks across the Arab world, the challenge is to scale digital offerings for MSMEs—long the backbone of employment—without compromis- ing credit quality or cybersecurity. IMF staff noted that well-designed DPI can reduce the cost of customer onboarding, improve credit scoring and strengthen tax compliance, all while supporting inclusion. ARAB REGIONAL INSTITUTIONS: FROM SUPPORTERS TO SYSTEM SHAPERS The Washington meetings also high- lighted the growing strategic role of Arab regional institutions. At the Arab Governors meeting with Banga, Arab Monetary Fund (AMF) Director-General Fahad Alturki rep- resented regional financial institu- tions, underscoring their role in macro-stability, payments integration and policy coordination. The Islamic Development Bank, Arab Fund for Economic and Social Development, OPEC Fund and oth- ers used the week to coordinate with the IMF and World Bank on co-fi- nancing pipelines—especially around climate, digital infrastructure and private-sector development. From a bank CEO’s perspective, the Washington meetings delivered a clear risk-management checklist. CAPITAL & LIQUIDITY With global debt rising and sover- eign–bank linkages under scrutiny, boards will be expected to demon- strate robust capital planning under stressed sovereign and rate scenarios, and to review concentration limits on domestic government exposures. Nonbank Interlinkages. Banks with significant dealings with NBFIs—through derivatives, funding lines, securitisations or co-lending— face heightened expectations around counterparty risk management and liquidity contingency planning. AI & DIGITAL The AI preparedness narrative is moving from macro to micro. Super- visors are likely to ask how banks are using AI in credit, risk and compli- ance, how they govern model risk, and how they are preparing staff and systems for rapid technological change. CLIMATE & TRANSITION RISK The push for “smart development” and the rise of climate co-benefits in MDB portfolios will feed into super- visory expectations on climate-re- lated risk assessment, disclosure and scenario analysis, particularly for banks exposed to carbon-intensive sectors. DEVELOPMENT & INCLUSION Especially in MENA, banks are in- creasingly seen as partners in deliv- ering MSME finance, infrastructure funding and social programs via dig- ital channels. That opens new busi- ness lines but also demands investments in data, cybersecurity and inclusive product design. the BANKING EXECUTIVE 52 ISSUE 202 OCTOBER 2025 6. BANKING & FINANCIAL SECTOR TAKEAWAYS