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AI set to transform UAE's financial landscape

AI’s ability to analyse vast amounts of data in real time has revolutionised fraud detection and risk management

Artificial Intelligence (AI) has emerged as a game-changer in the UAE’s financial services sector, profoundly transforming customer experience. This shift is driven by the country’s strategic embrace of digital innovation and its ambition to become a global leader in financial technology, an industry expert said.

“One of the most visible impacts of AI is the proliferation of chatbots and virtual assistants in most of the banks in the UAE. These AI-powered tools provide 24/7 customer support, handling routine inquiries and transactions with remarkable speed and accuracy, although there is still room for improvement. Our KPMG CEE report shows a decline in customers’ perceptions of their experiences. Technology contributed to the fall, specifically in the way banks implemented technology that shepherded customers into low-cost and low-satisfaction channels – these channels are seen to lack empathy and the human touch,” Gonçalo Traquina - partner, management consulting - financial services leader, head of the customer advisory at KPMG Lower Gulf, told Khaleej Times in an interview.

As with many industries, AI’s ability to analyse vast amounts of data in real time has revolutionised fraud detection and risk management. “Financial institutions in the UAE are now leveraging data-driven AI capabilities to identify credit fraud and improve fraud prevention, including money laundering. This not only protects customers but also enhances trust in digital banking platforms,” Traquina said.

AI advancements in UAE banks have significantly improved customer service and operational efficiency. AI provides personalised, secure, and efficient banking experiences, helping banks meet customer expectations and streamline operations. “As AI evolves, its impact on UAE banking will grow, enhancing customer service and internal processes,” Traquina said.

AI-driven automation has revolutionised many back-office operations. “Tasks such as data entry, compliance checks, and document processing are now managed by AI systems, which significantly reduces the time and cost associated with these activities. This minimises human error and ensures more accurate and reliable processing,” Traquina said.

Using artificial intelligence (AI) to improve customer experience offers businesses in the UAE a big opportunity. However, this shift comes with challenges. “It’s crucial to understand these dynamics to maximise AI’s benefits and reduce risks. Leading banks in this year’s CEE rankings have learned that old methods don’t work in this new AI-driven landscape,” Traquina said.

The UAE’s financial services sector is set for dramatic transformation. With accelerating technological advancements and evolving customer expectations, financial institutions are gearing up for a new era of hyper-personalised, secure, and efficient services.

These are some of the use cases that KPMG sees being adopted in the near future:

AI-driven chatbots and virtual assistants are expected to become more sophisticated, handling increasingly complex queries and providing personalised, real-time support. This shift will not only help customer satisfaction but also improve operational efficiency by freeing people to focus on high value tasks.

Financial institutions will leverage advanced data analytics to offer hyper-personalised products and services. By analysing customer data more deeply, banks can tailor their offerings to meet individual preferences and behaviors, resulting in higher engagement and loyalty.

With the rising importance of data privacy, financial institutions in the UAE will invest heavily in AI-powered cybersecurity solutions. These advanced security measures will protect sensitive customer information and ensure compliance with stringent regulatory requirements. As a result, customers can expect a safer and more secure banking experience.

Blockchain technology will gain prominence for its potential to enhance transparency and security in financial transactions. “By leveraging blockchain, banks can offer more secure and efficient transaction processes, which will bolster customer trust and streamline operations,” Traquina said.

The next five years will see financial services becoming more embedded in customers’ daily lives. Collaborations between financial institutions and non-financial sectors, such as retail and healthcare, will lead to integrated service offerings that provide added value and convenience. This integration will make financial transactions more seamless and part of everyday activities.