Recently, Standard Chartered released its estimates on the banking assets of the Islamic banking segment globally, which it predicts will reach US$1.1 trillion by 2012, up 33% from 2010. Over the past five years, Islamic banking in the Middle East region — which accounts for 60% of global Islamic banking assets — has witnessed a CAGR of 20% and is well positioned to double by 2015.
Consequently, the likes of Temenos and Misys have seen growing interest in and demand for IT solutions catering to the Islamic banking segment. In the past month alone, two major deals were signed in Oman: Muscat-based Bank Sohar and Bank Dhofar both signed agreements with Path Solutions to implement of their Islamic banking IT solution iMAL.
Growth across the Islamic banking segment is one of many unique local trends driving IT investment in the region. Other trends include regional market consolidations and the expansion of both local and global banks into the region. As the overall banking sector continues to grow in the Middle East, the competition is heightening. In order to gain differentiation in the region, Forrester expects to see major investments in business analytics, mobility, disaster recovery, and risk management. I expand upon these trends and more in my recently published report, which identifies the key trends driving growth across the Middle East and the likely impact those trends will have on IT investments by banks in the region.