Stitch report flags vendor sprawl as Gulf finance’s “hidden culprit”

More than half of financial institutions in Saudi Arabia and the United Arab Emirates say they have missed business opportunities because of legacy technology and fragmented infrastructure, according to a new study released by Stitch.

The findings come as the GCC’s digital banking market is expected to expand rapidly over the next decade, reflecting rising demand across payments, lending, deposits and related services. But Stitch’s report argues that many institutions are not positioned to capture that growth because their technology foundations remain difficult to change.

Vendor adoption rises, but legacy remains

Stitch said the Gulf has seen a broad shift towards external vendor platforms, with many banks relying on third-party tools. However, the report argues that this has not removed legacy systems. Instead, modern capabilities are often layered on top of older architectures, creating stacks that become increasingly complex to integrate, maintain and upgrade.

That complexity appears to be showing up in outcomes. More than 50% of institutions surveyed in Saudi Arabia and the UAE said their current technology setup caused them to miss business opportunities, Stitch reported. The study said missed opportunities were reported across institution types, including exchange houses, financing companies, fintechs and banks.

Legacy and fragmented systems still sit at the heart

Institutions surveyed cited slow product launches and updates, integration challenges across vendors and systems, high costs, and limited flexibility. More than one in five described their systems as outdated or difficult to upgrade, Stitch said.

“Everyone talks about digitization and AI adoption across the sector, but the reality is that legacy and fragmented systems still sit at the heart of all institutions. They slow things down, limit progress, and drain budgets; the hidden culprit. As the MENA region continues its unprecedented progress, modern stacks and a unified operating system unlock a new dimension of opportunity and growth,” said Mohamed Oueida, founder and chief executive of Stitch.

A push towards unification

A key takeaway from the report is a growing preference for consolidation. Stitch said 73% of institutions in Saudi Arabia and 66% in the UAE agreed that a single provider would deliver more value than managing multiple disconnected platforms.

Respondents pointed to expected benefits including faster product launches, improved customer experience, easier management and lower maintenance costs. The report frames unification as a way to reduce operational friction, simplify compliance and integration workloads, and give product teams more control over timelines.

Modernisation plans meet switching constraints

Stitch said modernisation intent is high in both markets, with a large share of institutions planning technology upgrades within the next 12 months. However, it said execution is constrained by high switching costs, long-term contracts, regulatory and compliance concerns, and downtime risk.

The report argues these barriers help explain why legacy systems persist even as vendor and cloud adoption increases, particularly in infrastructure-heavy areas such as lending.

Stitch positions its platform as a response

Stitch said its unified financial infrastructure platform can help institutions launch products faster than traditional timelines, and pointed to a regional client roster including Lulu Exchange, Alamoudi Exchange, Foodics, Yanal, Raya Financing and Tanmeya Capital.

The report concludes that as competition rises across the Gulf’s digital banking market, institutions that reduce fragmentation and regain control of product delivery will be better positioned to capture growth.