Banking and tech experts gathered at the ENGAGE Dubai event to explore how banks can apply Artificial Intelligence (AI) to take banking to the next generation in terms of modernisation, customer experiences and inclusivity.
Banks around the world are actively leveraging AI to enhance customer-facing chatbots, prevent fraud, and streamline processes like regulatory reporting and software development workflows.
However, widespread adoption is yet to be achieved. According to McKinsey, up to 80% of IT budgets in banks are allocated to maintaining outdated systems, rather than investing in innovations to stay competitive amid growing AI adoption.
Speaking at the event, Jouk Pleiter, Founder & CEO of Backbase, argued that allocating resources to integrate AI could be the key differentiator between banks that succeed with customers and those that do not.
He asserted that AI could significantly boost productivity and efficiency, improve the customer experience, and provide banks with a competitive edge to grow profitably.
“A huge opportunity is knocking on the door. In the last ten years we’ve focused mostly on mobile-first basic servicing. Over the next ten years we will focus on AI-driven growth,” he said.
“The legacy system is channel and product centric. We need to shift away from this to customer centric systems that integrate AI. AI is going to live inside platforms and live inside software applications,” he said. Pointing to the Backbase Intelligence Fabric, he added: “This is AI natively embedded within the Backbase ecosystem.”
Pleiter emphasised the urgent need for African banks to modernise their legacy systems and integrate AI-powered capabilities. While Backbase is already assisting several banks in making this essential transition, more momentum was needed to transform the industry.
Focusing on some of the areas within banking where AI is already delivering productivity gains, Pleiter pointed out that “McKinsey says that financial institutions often spend one to four weeks creating credit-risk memos. Generative AI could cut time spent on credit-risk memos by 20-60%.”
“Eliminating labour intensive tasks will unlock significant productivity gains,” he said but noted that noting that AI “will both replace and complement human tasks.”
Pleiter revealed that Backbase is advancing Agentic AI (Agentic AI is a new type of AI that can work and act intelligently and independently). Among other tasks, this permis banks to deploy bots that seamlessly execute workflows and boost customer engagement.
These advances are complemented by large language models (LLMs), which are revolutionising daily banking operations by enabling seamless account access, efficient payment management, streamlined transaction history reviews, and effortless handling of card-related tasks across multiple channels.
Similarly, the company is developing AI-driven product activation and up-sell campaigns to boost the number of products held per customer. Backbase is utilizing AI and machine learning models to analyze customer data and behavior.
This analysis provides actionable insights, including early warning indicators for retail customers, cash-flow forecasting for small and medium-sized businesses and customer health and viability information for relationship managers.
To ensure a smooth transition to the modernisation, it is essential to adopt a phased approach to AI integration. “A step-by-step strategy for progressive banking modernization is critical, beginning with user interfaces and gradually extending to backend systems,” Pleiter explained.
Eliminating barriers to modernisation
Bhaskar Dasgupta, senior advisor at the Sheikh Hamdan Bin Ahmad Al Makhtoum private office, emphasized the need for banks to eliminate barriers to innovation in order to successfully modernise.
He said that cumbersome regulatory and compliance burdens continue to impede progress, with the heavily regulated banking sector slowing the pace of innovation due to complex compliance requirements.
“AI adoption faces significant hurdles, including ensuring data privacy and transparency while adhering to protection laws,” he remarked.
Dasgupta also stressed the importance for banks to make the bold moves needed to shift away from legacy systems and infrastructure. He noted that decades-old systems are costly to maintain and challenging to integrate with modern technologies. “Transitioning to new systems is expensive and risks service disruptions, which limits swift innovation.”
Dasgupta pointed out that cultural resistance to change must be addressed. He argued that a mindset shift is necessary, as traditional banking cultures value stability over disruption, creating resistance to innovation.
He noted that these barriers to innovation in banking were giving fintech and private credit firms the upper hand. “Fintechs can go around these problems, becoming quasi banks,” he pointed out.
“When a customer goes to a bank for a huge loan, the processes are often lengthy and cumbersome. But the same customer can approach a private credit firm or fintech and get a deal that serves their needs in a shorter time.”
Discussing the transformative impact of major fintech innovations on the banking sector, Dasgupta identified several key trends. These include digital wallets and mobile payments, robo-advisors and automated wealth management, blockchain and cryptocurrency, as well as lending platforms and alternative financing. “These innovations are reshaping the landscape of banking, offering new opportunities and challenges for financial institutions,” he observed.
Changing gender mindsets
While AI and digital transformation hold significant promise for banks, lenders must ensure that the growth they drive is inclusive. Women need to be part of the innovation process and, crucially, the tech-powered solutions that banks come up with need to help women entrepreneurs to access financial products at more competitive rates.
Incorporating inclusivity into digital transformation strategies can also enhance the transition to a more innovative financial sector. For example, women-led ventures often face unique challenges in accessing capital and building networks. Addressing these disparities will not only support women but also strengthen the fintech ecosystem as a whole.
Likeleli Monyamane, Head of Digital Programs at Standard Bank, argued that for women in banking and tech to be empowered, cultural and social norms must first change. “We come from cultures that are very much centered around patriarchal norms in our society. They make their way into the workplace and they undermine women’s leadership,” she observed. “Men need to recognise and support women as leaders,” she said.
Ghazal Al Sakaal, the Global Head of Digital Strategic Partnerships at Mashreq Bank, noted that despite cultural prejudices, women in banking and tech are increasingly demonstrating their leadership capabilities.
“Women are proving that they are able to break the barriers and that they belong at the top. There is a great opportunity for women to build the foundation of fintech,” she observed.
Sepo Haihambo, CEO Commercial Banking at FNB Namibia, described the ongoing struggles women-led fintechs face in accessing finance compared to their male counterparts. “Another challenge that women face in the fintech and financial services sector is access to capital. There is still a bias towards male-led ventures,” she said.
Haihambo also underscored the difficulties women encounter in accessing networking platforms. “Men tend to have access to different networking platforms to raise funding, or access to investors at a higher level,” she added.
By fostering inclusivity, African banks can supercharge digital innovation and ensure that the benefits of transformation are shared across diverse communities. Addressing challenges like access to capital and networking opportunities for women-led ventures will not only support gender equality but also strengthen the fintech ecosystem and unlock untapped market potential.
AI is already proving its value in areas like fraud prevention, credit risk assessment, and personalized customer service. For African banks, adopting AI while addressing inclusivity challenges provides a practical pathway to modernize operations, better serve underrepresented groups and create more accessible financial solutions that create lasting impact across the region.
