As tensions escalate between Israel and Iran, several major banks, including Singapore’s DBS, are restricting travel to conflict-affected areas in the Middle East. This move comes in light of a military escalation, jeopardising international efforts aimed at financial diversification in the region.
Background of the Escalation
On 24 June 2024, Israel ordered an attack on Tehran, accusing Iran of violating a recently announced ceasefire—an assertion Iran has denied. The conflict threatens years of initiative by nations like Saudi Arabia and the United Arab Emirates, which have been positioning themselves as regional financial hubs.
Bank Responses
- DBS: The bank announced on Tuesday that it suspended all non-essential travel to the affected areas, stating, “We are closely monitoring the evolving situation in the Middle East, including developments in and around Dubai,” according to a spokesperson.
- Bank of Singapore: Ang Wee Khoon, the head of risk management at their DIFC branch, confirmed that all non-essential travel to and from Dubai has been halted, prioritising staff safety.
- JPMorgan: The US bank is allowing only essential travel for employees in the region, while also offering individual support as needed.
- Goldman Sachs: Staff in Israel were advised to work remotely last week as a precaution.
- Japanese Banks: Several, including Sumitomo Mitsui Financial Group and Mitsubishi UFJ Financial Group, have begun evacuating their staff and their families from conflict areas.
Implications for the Financial Sector
The current conflict could derail financial ambitions in the Middle East, where reforms and incentives were established to attract global banking firms. As travel restrictions take effect, banks are preparing for potential disruptions to their operations.
Banking experts are watching the situation closely, understanding that maintaining staff safety is paramount while also navigating client expectations during these turbulent times.