By Jelle van Schaick, VP Marketing at Lorum.
The Middle East is a switchyard for global money. Capital arrives in the Gulf and then redistributes across high velocity routes to South Asia, Africa, and Europe. These same routes run in reverse, fueled by wages, trade settlement, and massive sovereign investment.
In the world of global finance, the region is often treated as a later add-on to Western centric stacks. This is a mistake. The Middle East is where a massive percentage of cross-border volume already lives. To succeed here, you cannot simply layer an API over existing rails. You have to build directly into the flows.
The power of predictable corridors
Remittances provide the hardest data for this claim. While early 2020s estimates hovered around $600 billion, latest reports from the World Bank and IMF show that officially recorded remittances to low and middle income countries have now crossed the $700 billion mark. Within the GCC, outward flows continue to outpace global averages. These regions are the primary engines for global wealth redistribution.
These are not just numbers. They are repeat, high frequency payments with real world consequences. They set a rigorous expectation for speed and certainty. When a single region facilitates hundreds of billions in annual flows, good enough infrastructure is not an option. This volume demands a dedicated clearing logic that simple messaging layers can no longer support.
The mandate to be “Excessively Local”
As Thomas Yeddou explores in his analysis of why founders are turning to the Middle East, building in this region requires an excessively local mindset. The challenge is that the financial ecosystem is still emerging and highly fragmented. Building from the outside often results in failure because remote first assumptions break when they hit regional realities.
- The regulatory partnership. In an emerging ecosystem, innovation does not happen in a vacuum. It requires working closely with regulators to drive the rulebook forward. Founders here help architect the sandbox alongside entities like the UAE’s ADGM or Saudi Arabia’s SAMA.
- The weekend mismatch. Managing liquidity across a Friday to Sunday weekend gap requires more than just a smart dashboard. It requires a local balance sheet strategy and an understanding of regional liquidity cycles.
- Reconciliation norms. Cut-off times vary by bank and rail. If you do not design for these nuances, exceptions become your default operating state.
A payment is not done when it is sent. It is done when the beneficiary can use the funds.
The illusion of speed: messaging vs. finality
While the industry has mastered onboarding and tracking, these are often cosmetic improvements that mask a lack of true finality. SWIFT’s data shows real progress on processing speed, but it also highlights the beneficiary leg as a key remaining constraint.
For a treasury team, that last mile is the entire product. It determines whether payroll lands on time or if a supplier releases a shipment. Domestic rails are improving rapidly. In the UAE, the central bank’s launch of Aani set a new bar for instant movement. However, cross-border routes still span multiple regimes and balance sheets.
The operator’s rule is simple. Control more of the route if you want predictable outcomes. If you only sit on top of existing infrastructure, you inherit every upstream failure.
The retreat of correspondent banking
The traditional pipes are shrinking. WOCCU reports correspondent banking relationships contracted by roughly 25% between 2011 and 2020.
Fewer relationships mean fewer paths. When one node slows down, the entire corridor gets bottlenecked. While the G20 has set ambitious targets for cross-border payment improvements by 2027, a Reuters report cites the Financial Stability Board saying the industry is set to miss them. Clearing slows down when liquidity is treated as balance sheet yield rather than a utility.
A new manifesto for MENA founders
To build successfully in this switchyard, founders must adopt a new playbook:
- Build inside the route: Start with regulated local accounts that match how funds actually arrive and leave.
- Run liquidity as an operating system: Implement intraday rules and clear cut-offs that account for regional time zones.
- Collaborate with the ecosystem: Work with regulators to ensure that new technology matches the risk appetite and strategic goals of the region.
- Prioritize finality over messages Measure success by when funds are available for use, not when a message is sent.
From status dashboards to real infrastructure
The Middle East rewards operators who treat settlement as a primary product rather than a back office detail.
Lorum is an example of this shift in focus. By moving beyond the messaging layer and into the clearing layer for regulated institutions, operators can provide the predictability that overlay fintechs cannot.
By building where the flows already are, it is possible to turn cross-border movement from a constant constraint into a controlled, high performance system.
If you want to move money in the Middle East, stop looking at the map of where the banks are. Look at the map of where the money is already moving and build right in the middle of it.
