Banks lag on trustworthy AI: Only 11% ready
Banks lead sectors in AI spending as investments surge. Yet, only 11% achieve trustworthy AI with high internal confidence. This analysis examines SAS-IDC study findings, with focus on UAE implications from Dubai’s fintech hub.
Overview
Artificial intelligence transforms banking operations, with 60% of banks expecting 4% to 20% spending growth and 12% anticipating steeper rises. Banking outpaces other industries, prioritizing customer experience and market share over cost savings. However, trust gaps hinder progress: only 11% of banks combine high confidence with validated AI systems, per SAS’ Data and AI Impact Report: The Trust Imperative, based on IDC’s survey of 2,375 global IT and business leaders.
In the UAE, Dubai’s fintech ecosystem positions Middle East banks ahead. Strong data foundations and governance enable scaling, but global shortfalls warn of risks like regulatory scrutiny.
Nearly half of banks (47%) face a “trust dilemma”: underusing reliable AI or over-relying on unvalidated systems.
Trust gap persists despite AI surge
Only 11% of banks reach the top of IDC’s Trustworthy AI Index, with 23% at the highest level overall. About nine in 10 lack alignment between trust perceptions and proof.
“On trustworthy AI, banking leads every sector in this study – and even so, most banks’ foundational readiness is nowhere near where it needs to be,”
— Stu Bradley, Senior Vice President of Risk, Fraud and Compliance Solutions at SAS
Significance: This gap exposes banks to reputational risks amid rising regulator and customer demands. In Dubai, it underscores urgency for UAE banks to validate AI before scaling.
Key barriers hinder readiness
Nearly one in five banks (19%) use siloed data; 45% lack data governance; 41% have suboptimal infrastructure; 42% face AI skills shortages. These structural challenges prevent institutions from achieving validated AI deployment at scale.
“Roughly nine in 10 banks have yet to fully align trust with proof, and about one in five are still running on siloed data. Closing the gap between AI ambition and AI readiness should be a top priority for all banks.”
Significance: These issues curb ROI and innovation. UAE’s robust oversight offers a model, but Dubai banks must address talent gaps to lead MENA fintech.
ROI tied to trustworthy practices
Customer experience yields $1.83 per dollar invested; market share $1.74; cost savings $1.54. Trustworthy AI users are 60% more likely to double returns. Over half (52%) plan AI architecture expansion; 43% aim to grow AI teams.
“Banks in the Middle East are well-positioned to build on strong foundations, with robust data, clear governance, and effective oversight enabling AI investments to scale and deliver reliable results. At the same time, prioritizing transparency and making AI decisions easier to understand will play a key role in strengthening confidence. Banks that place responsible AI at the heart of their strategy will be best positioned to drive innovation, earn trust, and create sustainable long-term value,”
— Michel Ghorayeb, Managing Director at SAS UAE
Significance: Prioritizing trust boosts competitiveness. In Abu Dhabi and Dubai, this aligns with UAE Central Bank AI guidelines for fairness.
What’s next
Nearly one-third of banks eye agentic AI, demanding more trustworthy investments. Watch UAE’s AI execution phase, with 53% of banks deploying for accuracy. Dubai regulators will shape MENA standards. Banks investing in governance pre-scale will dominate.
Conclusion
Only 11% of banks master trustworthy AI amid surging spends, revealing trust dilemmas and foundational gaps. UAE banks, via Dubai’s hub, hold advantages in data and oversight. Prioritizing governance unlocks superior ROI, positioning MENA leaders in the AI race. The 47% of institutions caught in trust dilemmas face mounting pressure to validate systems before expansion.
Sources: Zawya, SAS, LinkedIn, MEA Finance
