KUWAIT CITY, Oct 30: The Future Investment Initiative (FII) held in Riyadh hosted a panel discussion on the rapidly evolving financial landscape, the crucial roles of traditional banks, AI, and FinTech in defining the future of the banking industry. Shaikha Al-Bahar, Deputy Group CEO of National Bank of Kuwait (NBK), participated in the panel discussion, offering her valuable insights.

The panel discussion themed “Can Traditional Banks Compete with AI and Fintech Disruptors?", included leading international figures from financial services and technology, explored the challenges and opportunities that AI, FinTech, and traditional banks face as they seek to coexist—or outcompete—in the digital age. In a world where financial technology is changing the rules of the game, Shaikha Al-Bahar provided brilliant insights into how NBK is not only keeping pace with these innovations but also leading the charge.

Redefining the Banking Landscape

"Fintech has been labeled a 'revolution' in banking, but the data tells a more nuanced story," Shaikha Al-Bahar opened the discussion. "Despite billions of dollars in investments, not a single FinTech company ranks among the top 250 global banks. The reality is that FinTechisn't a revolution that will replace traditional banking. Rather, it challenges us to evolve."

Al-Bahar pointed out that, contrary to popular belief, the banking industry's business model has proven remarkably resilient, withstanding multiple disruptions over the past decade. She emphasized that traditional banks, including NBK, are integrating new technologies to enhance rather than replace core banking functions.

"The progress we've seen from the digital era isn’t about FinTech replacing us," she continued. "It's about integrating digital innovations into a more comprehensive and inclusive business model. At NBK, our digital transformation allows us to build on the solid foundation of traditional banking while leveraging technology to enhance customer experiences."

Collaboration vs. Competition: Banks and FinTechs in the New Financial Ecosystem

The panel discussed whether traditional banks and FinTech companies are destined to compete or collaborate. Al-Bahar argued that the future of banking will be defined not by head-to-head competition, but by cooperation.

"Banks and FinTechs have historically competed for customers, but we are entering an era of collaboration," she remarked. "Traditional banks have the financial capacity, while FinTechshave agility and innovation. The key is finding the right balance between these strengths. It's not about one outdoing the other, but about leveraging each side’s advantages."

As a case in point, Al-Bahar referenced NBK’s own digital bank, Weyay. "We at NBK operate both our traditional bank and Weyay, a fully digital bank. Both operations complement each other and interact seamlessly, providing a unique, customer-centric journey. That is the real revolution in banking."

Navigating the Balance of AI within Banking Frameworks

As the panel discussion shifted to the role of AI, the conversation turned to the immense potential and risks associated with artificial intelligence in the financial industry. Banks have already invested billions in AI-powered systems for fraud detection and risk management, but concerns remain about whether AI might introduce new vulnerabilities into the system.

"AI is a great enabler—it allows banks to analyze vast amounts of data, recognize patterns, and simulate scenarios," Al-Bahar explained. "But while AI enhances our capabilities, we must ensure that it does not make us complacent. Human oversight is critical. Technology recommends, but humans must decide."

Al-Bahar highlighted the importance of transparency and accountability in AI systems, stressing that while AI can provide powerful insights, banks must ensure that these insights are based on real, verifiable data. She cautioned against an overreliance on AI, noting, "We cannot let AI be the sole decision-maker. It’s crucial to have a pilot behind the wheel, to monitor, review, and intervene when necessary."

Transforming Banking from the Inside

While much of the FinTech discussion focuses on customer-facing applications, Al-Bahar offered a compelling argument that the true potential of AI lies behind the scenes—in back-office operations, regulatory compliance, and capital allocation.

"At NBK, we’ve automated over 100 processes using Robotic Process Automation (RPA), and the results have been remarkable. AI and machine learning don’t just make processes more efficient; they redefine them, allowing us to be more responsive and dynamic."

She noted that AI could revolutionize risk management by continuously learning from new data points and adjusting risk profiles in real-time. This, she believes, is where AI’s most transformative impact will be felt in banking—areas where rule-based, data-driven tasks can be optimized for greater accuracy and speed.

The Balancing Act Between Regulation and Innovation

The panel also addressed the complex relationship between innovation and regulation. In a rapidly evolving industry, governments are struggling to keep pace with technological advancements. Al-Bahar argued that regulators are playing a crucial role in safeguarding the financial system while supporting innovation.

"Regulators have been quick to recognize the importance of digital technologies in banking," she said. "Many have created 'sandboxes'—safe environments for testing new FinTech solutions. However, I believe regulators' primary role should remain that of protectors of the financial system. Banking is highly regulated for good reason—its role in the global economy is critical, and any disruptions can have far-reaching consequences."

Embedded Finance: Will the Bank Brand Become Irrelevant?

Another intriguing topic was the rise of embedded finance—the integration of banking services into non-banking platforms. With more companies offering financial services through digital ecosystems, some have predicted that "bank as a brand" may become obsolete. Al-Bahar was quick to point out that traditional banks still have a vital role to play.

"This new model works well on a smaller scale—like payment wallets and transfers—but banks will remain the backbone of the financial system. Embedded finance is just another example of how the industry is evolving to meet changing customer demands. Banks will need to adapt by developing their own technologies or partnering with FinTechs to provide these services."

She also pointed out that some digital banks are reverting to traditional models, opening offline branches and offering human-based customer service to enhance growth—a sign that even FinTech leaders recognize the value of traditional banking services.

Leading the Change Through A Holistic Approach to Innovation

Finally, the panel addressed the leadership challenge facing traditional banks. Al-Bahar argued that to remain competitive in an era of rapid technological change, banks must go beyond simply investing in technology—they must transform their organizational culture.

"Industry leaders need to foster a culture of innovation that permeates the entire organization. It’s not just about adopting digital technologies, it’s about aligning every decision-making process with a digital mindset, from junior staff hires to strategic planning at the executive level."

Al-Bahar also emphasized NBK's leadership in digital transformation, expressing immense pride in the bank's accomplishments.

“Our journey towards integrating digital technologies while preserving the stability and trust of traditional banking is a testament to our commitment to providing the best for our customers," Al-Bahar noted.

Looking forward to 2030, Al-Bahar concluded with a bold prediction: "The CEOs who strike the right balance between traditional banking and Fintech agility will define the future of the industry. Success will depend on being able to adapt, innovate, and evolve—without losing sight of the core values that have made traditional banking such a pillar of the global economy."