The UAE Central Bank has issued new guidelines for licensed financial institutions (LFIs) on the responsible implementation and use of artificial intelligence and machine learning to protect consumers and strengthen transparency and governance in the use of advanced technologies.
This guidance sets out basic principles to help financial institutions best use the two technologies. This includes governance and accountability, fairness and non-discrimination, and transparency, the banking regulator said on Monday.
Requirements for effective human oversight, data management and privacy are also part of the new framework.
The new guidance “aims to establish a clear framework to guide financial institutions to deploy these technologies safely and responsibly, while ensuring that consumer rights are protected, governance and transparency principles are strengthened, and fair and sustainable practices are promoted,” the central bank said.
The UAE aims to become a frontrunner in AI as it diversifies its economy away from oil. The country’s affinity for technology research has led to the creation of startups, partnerships, and investments from industry leaders such as Microsoft, Nvidia, and OpenAI.
In 2019, the UAE announced the establishment of a technology-focused university, the Mohammed bin Zayed University of Artificial Intelligence. Two years ago, Emirates became one of the first countries in the world to appoint an AI minister, Omar Al Olama.
The UAE is also working with the US to develop an AI campus in Abu Dhabi that will include 5 GW of AI data center capacity.
In its latest guidelines, the UAE Central Bank said LFIs must adopt a documented AI and ML governance framework commensurate with the size, nature and complexity of their operations.
A culture of understanding the risks of AI and using AI responsibly also needs to be promoted within LFIs, in coordination with all relevant central bank regulations and standards.
Financial institutions’ senior management and boards of directors also need to be held accountable for their AI and ML systems and their outcomes, he added.
According to the new guidelines, financial institutions are also required to ensure that AI and ML systems do not have discriminatory or manipulative outcomes against individuals or groups.
Other specifications include maintaining transparency with customers and stakeholders regarding the use of AI.
According to the new guidelines, consumers must be able to request human review and explanation of AI-generated decisions, and alternative arrangements must also be available if customers do not wish to be subject to AI-generated decisions.
The UAE Central Bank is one of many other global banking regulators that have issued guidelines for financial institutions on AI implementation.
Last week, the U.S. Department of the Treasury published new resources to support faster and broader adoption of AI in the financial sector through more robust AI cybersecurity and improved operational resiliency.
The European Central Bank and the Reserve Bank of India have also issued guidelines on the use of AI in the financial sector, focusing on accountability, fairness and equity.
In the Middle East, with the rapid adoption of new technologies in the banking sector, the Central Bank of Qatar and the Central Bank of Jordan have developed guidelines for the use of AI.
