Treasury Beyond Borders - Rewriting the Middle East Playbook

As the Middle East cements its role as a global trade and finance hub, treasurers are embracing innovation to manage risk and seize opportunity, from FX volatility to ESG finance and digital transformation. Here, Karan Khanna, Managing Director, Head of Corporate Sales, Markets & Securities Services, HSBC Bank Middle East; Hani El Khoury, Head of UAE Sovereign Wealth Funds, HSBC Bank Middle East outline the latest trends and opportunities in the region.

For decades, hydrocarbons defined the Middle East’s economic relevance and capital flows. Today, however, that picture is changing rapidly. Diversification into other sectors and significant capital investment is reshaping trade and financial relationships across the region.

Karan Khanna, Managing Director, Head of Corporate Sales, Markets & Securities Services, HSBC Bank Middle East, explains: “The Middle East is no longer just an oil story. The region is proving itself to be a serious contender on the global economic stage by striking a unique balance between strategic geography, resources, and ambitious economic reforms.” With non‑oil GDP in the Gulf Cooperation Council (GCC) growing more than 4.3% annually for the past two years, outpacing the global average of around 2.8%, that diversification is now well established and continues to grow.

Initiatives such as Saudi Arabia’s Vision 2030 and the We the UAE 2031 strategy are driving investment into finance, technology, logistics, and tourism, backed by more than $3tr. of planned capital spending, according to Khanna. Egypt and Türkiye add strategic shipping corridors, industrial capacity and labour. As Khanna notes, this creates a “1+1=3” synergy that delivers more value than each could achieve alone.

The effect of this is already visible on the ground. Jebel Ali in Dubai, one of the world’s top ports, is part of a global network operated by DP World across 75 countries . Saudi Arabia, meanwhile, is building futuristic logistics hubs such as NEOM Port (which is projected to handle more than 10 million containers annually by 2030 ) and Oxagon, a floating port city in NEOM. Moreover, Gulf airlines including Emirates, Etihad and Qatar Airways now link regional trade routes to every major global market.

Hani El Khoury, Head of UAE Sovereign Wealth Funds, HSBC Bank Middle East, reveals: “Countries such as the UAE, Saudi Arabia, and Qatar are establishing themselves as cross‑border financial centres, logistics platforms, and capital connectors between East and West.”

In turn, that drive is reshaping capital flows. Sovereign wealth funds in the region now manage more than US$5.4tr., according to El Khoury. They are deploying capital into strategic industries worldwide, while international firms are increasingly choosing the Middle East as a base for treasury and investment operations. In addition, IPO volumes are surging across regional exchanges like Abu Dhabi’s ADX and Saudi Arabia’s Tadawul, deepening local capital markets.

This growing influence brings new opportunities but also greater complexity for treasury teams operating across the region’s diverse markets. Managing liquidity, currency exposure, and regulatory differences has become part of daily life. “The only thing predictable in today’s market environment is unpredictability,” reflects Khanna. “That’s what corporate treasurers in the region, and globally, need to consider and be prepared for.”

Crucially, that unpredictability is amplified in the Middle East, where pegged currencies and imported monetary policy often mean treasurers must react to shifts beyond their control.

“Treasurers in the Middle East operate in an environment shaped by USD dependency, in some cases restricted capital mobility, and exposure to commodity-linked macro cycles,” El Khoury summarises. “Key FX and liquidity challenges include non-convertible currencies, regulatory controls, and potential dollar funding shortages, all of which affect cash visibility, liquidity pooling and hedging efficiency.”

To manage these challenges, corporates are increasingly centralising operations in financial hubs with supportive regulation and access to deep capital markets. Many multinationals are establishing regional treasury centres – and in some cases, in-house banks within financial hubs such as Dubai International Financial Centre (DIFC), Abu Dhabi Global Market (ADGM), and Qatar Financial Centre (QFC), enabling intercompany netting and cash pooling across multiple jurisdictions.

Alongside these structural moves, techniques such as AI-powered forecasting and dynamic discounting are being used to unlock working capital, while synthetic pooling and currency matching strategies help manage exposure in restricted markets. And according to HSBC’s Corporate Risk Management Survey 2024, 61% of corporates expect AI tools to be integral to treasury risk decision-making within three years.

Elsewhere, the region’s reliance on USD‑pegged currencies is reshaping FX risk management.

The push to centralise liquidity and strengthen risk frameworks is also fuelling further innovation. For example, treasurers in the Middle East are embracing digital tools, ESG‑linked funding, and new skill sets as they reposition for a more complex, globally connected future.

Cloud-based treasury management systems now provide real-time visibility across entities, automated bank feeds and instant reconciliation. Trade finance processes are shifting from paper-based LCs to blockchain-enabled digital instruments, while ports such as Jebel Ali and King Abdul Aziz are integrating with DLT platforms. El Khoury notes: “Treasury teams in the Middle East are actively experimenting with digital trade with a growing preference for stable regulated blockchain based solutions over speculative crypto.”

Khanna adds: “In today’s environment, corporate clients need quick and reliable access to high‑quality data and insights.” Digital platforms and data solutions are now delivering on that need, giving treasurers faster insight and action in one place. “HSBC’s AI Markets platform is designed to meet this need, offering clients access to real-time FX and rates commentary, scenario modelling, and risk management tools under one roof.”

The region’s energy transition adds another layer of change. El Khoury notes that projects under Saudi Vision 2030 and UAE Net Zero 2050 strategies are driving demand for green bonds, sustainability‑linked loans and transition finance. Treasurers are embedding ESG metrics into capital structures and risk models. “We definitely see that ESG‑linked finance is becoming a strategic treasury tool rather than just a regulatory tick box,” he enthuses.

What’s more, innovation is changing not only the systems and funding models treasury relies on but also the skills teams need to succeed. Digital systems expertise, ESG knowledge, and risk analytics are now as essential as traditional cash and risk management skills.

As a result, El Khoury notes that successful teams in the GCC are now building a profile that is “strategic, digitally fluent, risk-intelligent and sustainability-aligned.” In the Middle East, innovation, sustainability and new skills have shifted from optional extras to defining features of modern treasury.

Adaptability, data-driven decision-making, and collaboration are critical. After all, in fast-moving markets, what works today may not work tomorrow. As such, treasurers need flexible strategies, a strong toolkit of hedging and liquidity solutions, and the willingness to rethink their playbooks as the region’s transformation accelerates.

“Be open to change,” advises Khanna. “Just as the region itself is embracing innovation, treasurers need to evolve, try new ideas, and challenge old habits.” In short, as the Middle East accelerates its role as a trade and financial hub, it is becoming a place where treasurers can adapt and put new ideas into practice at pace.

In an era of rapid change, treasurers need strategic insights to stay ahead. This series is designed to help finance leaders navigate uncertainty in an increasingly interconnected world. Listen to this podcast by searching for 'Global Viewpoint' on your preferred podcast player.