Group CEO of Kuwait Finance House (KFH), Khaled Yousef AlShamlan said that in 2024, Kuwait's economy demonstrated resilience amid global economic challenges. He added that the banking sector in Kuwait maintained stability, benefiting from increased financing activity and improved asset quality.

“Looking ahead to 2025, Kuwait's economy is expected to continue its positive trajectory, driven by diversification efforts. The banking sector is likely to experience further growth through digital transformation initiatives and increased investment in non-oil sectors, presenting opportunities for innovation and expansion,” AlShamlan explained in an interview with Global Finance magazine. “There will be more reliance on AI and robotics as adopting generative AI promises improvements in decision-making, profitability, fraud detection and prevention, and better risk management.”

Meanwhile, AlShamlan said that “Kuwait's economic reforms are paving the way for significant opportunities for financial institutions. Initiatives aimed at enhancing the business environment, such as public-private partnerships and regulatory simplifications, will facilitate greater investment inflows. Moreover, the push for digital banking and fintech solutions presents avenues for institutions to enhance service delivery and customer engagement. Overall, these reforms create a conducive environment for sustained growth and collaboration in the financial sector.”

He added that Kuwait is now finalizing a new mortgage law. This would positively impact KFH and the banking sector in general.

Regarding sectors with the greatest growth potential, AlShamlan noted opportunities in those critical to global economic infrastructure and energy needs, specifically oil and gas, construction, and related services. These sectors offer particularly strong growth prospects in the coming years.

He further said that innovation and technology represent some of the most dynamic sectors for growth. “As digital transformation accelerates, the potential for innovation to drive economic progress is significant. The technology sector is crucial for this transformation, with advancements in areas such as artificial intelligence, blockchain, fintech, cyber security, and automation that reshape the future.”

“At KFH, we capitalize on the long-term potential in these sectors by leveraging our strong financial expertise. We are committed to supporting the growth and transformation of these industries, while also contributing to their sustainability and efficiency,” he added.

Challenges

During the interview, AlShamlan discussed challenges of current global uncertainty, inflation, and market volatility. He emphasized that KFH has effectively managed these challenges through a comprehensive approach centered on asset and liability management, hedging strategies, repricing strategies, capital adequacy, stress testing, and active oversight.

Moreover, he highlighted that one of the operational challenges is for banks to ensure that the changing business models adhere to the state-of-the-art cyber security standards going forward to ensure the confidentiality, integrity and availability of the digital assets and protect them from the threat of malicious actors. “Also, the rapid change of the financial landscape could be a challenge, thus banks should keep abreast of development by increasing productivity through digital economy and sustainable finance,” AlShamlan concluded.