Skip to main content
Perspective:
Perspective
30 Mar 2026
6 minute read

Middle East Financial Services: Resilience redefined

Navigating geopolitical risks and building financial resilience in the Middle East

The Middle East’s financial services sector faces unprecedented challenges amid escalating geopolitical tensions and market volatility. This report explores the impact on banks, insurers, and asset managers, offering strategic insights to help institutions build resilience and adapt to a rapidly evolving landscape.

Patrycja Oselkowska
Middle East Financial Services: Resilience redefined
Download PDF (3MB) View PDF

 

The Middle East is experiencing geopolitical uncertainty, particularly around the Strait of Hormuz, a vital corridor for global energy trade. These disruptions have triggered a repricing of energy, credit, and geopolitical risks, significantly impacting financial institutions across the Gulf Cooperation Council (GCC) and the broader MENA region. Central Banks face challenges balancing inflation and liquidity amid volatile markets.

  • Central banks face a delicate balancing act between managing inflation pressures and supporting economic growth.
  • GCC central banks, with currencies pegged to the US dollar, must align monetary policy closely with global developments while addressing local liquidity challenges.
  • Less-capitalized economies are experiencing pressure on foreign exchange reserves due to declining revenues and increased volatility.
  • Non-performing loans (NPLs) are expected to rise, especially in sectors exposed to conflict such as aviation, maritime logistics, and tourism.
  • Trade finance volumes may contract as insurers reprice marine cargo risks, increasing counterparty and collateral risks.
  • Banks need to recalibrate credit risk models to incorporate geopolitical and energy transition risks and accelerate digital banking adoption to maintain service continuity.
  • War-exclusion clauses are being invoked widely, leading to premium spikes in marine, aviation, and political risk insurance.
  • The reinsurance market is undergoing structural repricing, creating opportunities for sovereign wealth funds and state-backed insurers to fill capacity gaps.
  • Regulatory focus on capital buffers and protection gaps is intensifying, with insurers revisiting actuarial models and stress-testing frameworks.
  • High-net-worth clients are shifting assets toward traditional safe havens such as gold, US Treasuries, and Swiss francs.
  • Sovereign wealth funds are reassessing long-term asset allocations with increased emphasis on geopolitical resilience and diversification.
  • The conflict is accelerating growth in Islamic finance and ESG frameworks are being recalibrated in light of energy supply shocks.

Get in touch

Patrycja Oselkowska

Patrycja Oselkowska

Partner | Financial Services Leader | Middle East Growth Leader
+971 (0) 4 376 8888

Did you find this useful?

Yes
No

Thanks for your feedback

Your feedback is important to us

To tell us what you think, please update your settings to accept analytics and performance cookies.

Need help updating cookies?

Our Thinking

Financial Services

Explore Deloitte’s insights and solutions for the banking & capital markets, insurance, and investment management sectors.  
Industry
5 minute read

Digital Insurance Maturity 2025

Explore deep insights into digital functionalities and user experience design provide a comprehensive picture of how insures are performing in the digital age.
Research
5 minute read

Managing growth: How Gulf SWFs are facing new challenges

Explore how Gulf Sovereign Wealth Funds are evolving to meet new challenges in talent, technology, and transparency amid rising global scrutiny. Read our latest report for key insights.
Research

Banking & Capital Markets

Deloitte Banking & Capital Markets consulting specialists help you meet customer expectations as the way people and corporations engage with finances changes. 
Industry
5 minute read