The UAE Central Bank is currently guiding FIs on the responsible application of artificial intelligence, a move that sparked a conversation.
I spoke with Katie Chambers on Dubai Eye. We explored a fundamental shift in our industry: whether automated decisioning truly expands access to capital or if it simply reinforces existing digital exclusion. While digitisation and basic algorithms have supported credit bureaus for years, the shift to AI represents a massive leap in data volume.
In my view, the main difference today is that AI allows banks to unlock vast amounts of alternative data that traditional machine learning tools previously ignored. When I talk about alternative data, I am referring to the digital footprint of your daily life—things like your Netflix subscription, your phone bill, or even a Disney+ account. These data points have traditionally sat outside the credit scoring box, but AI can now integrate them to create a much deeper dive into your financial habits.
However, this is a double-edged sword. A primary danger is that AI is trained on existing data, meaning any historical bias within that data is likely to be amplified. If a specific demographic was traditionally denied loans in the past, that bias will be carried into the AI model. This is why the UAE Central Bank guidance is so vital; it stipulates that institutions must use representative data to ensure their learning models remain inclusive and balanced.
The question of oversight is where many of us feel a sense of trepidation. I look at it through three frameworks: human-in-the-loop, human-on-the-loop, and human-out-of-the-loop. While I expect banks to maintain a human in the loop for ultimate decision-making initially, operational pressures will eventually tempt them to step back. We could move to a system where a human only intervenes if a flag is raised, or eventually, to the third stage where a human isn’t involved at all.
Regulators are working hard to get to grips with this, but I don’t believe they are keeping pace with how quickly AI is evolving; I struggle to keep up myself. Because of this, we might see regulators stifle innovation temporarily to ensure consumer safety. While traditional banks remain risk-averse, I expect the most interesting developments to emerge from the fintech world. Tech players and fintechs will continue to push these boundaries, and that is where the regulatory focus must remain to ensure innovation doesn’t come at the cost of consumer duty.
