Agentic AI Takes Over Credit Sanctions Role As UAE Banks Make Major Strides In Digital Banking

The digitalisation drive is also seeing the emergence of major partnerships between banks and fintechs to deploy AI and data to deliver context-aware offers at the customer’s moment of need, besides cutting operational expenses in the banking sector.

Emirates NBD’s digital-only bank is among the UAE banks which have moved from the pilot stage to live models for autonomous underwriting, while fintechs such as UAE-based leading digital SME lending platform Beehive are partnering with banks for its AI “credit bot” model designed for scaling in SME finance.

“Autonomous underwriting is no longer confined to pilots – in the UAE, it is already in action,” Siobhan Byron, EVP – Universal Banking at Finastra, a London-headquartered financial software major, told Arabian Business.

“Liv., Emirates NBD’s digital-only bank, now grants personal loans of up to AED 200,000 directly in-app with a sub-three-second service-level agreement and zero human touch,” she said.

Byron said the AI agent ingests bureau scores, salary flows and real-time behavioural signals, renders an approval or decline, books the loan to the core and pushes funds to the customer wallet – in one atomic workflow.

Similarly, Beehive uses machine-learning risk models fed by cash-flow, e-commerce and utility-payment data to auto-approve working-capital tickets in hours rather than weeks.

Digital banking dominance ahead

Industry players said the rapid digitalisation comes in the wake of an increasing realisation that, going forward, the combination of the lowest unit cost and deep personalisation at scale will define market dominance in the region.

They said banks that seize the platform opportunity will be able to accelerate their migration to an augmented, cloud-native banking core, while monetising data and APIs through open banking frameworks and across non-bank channels.

Industry executives said such banks will also be able to scale rapidly by leveraging partnerships instead of building everything in-house.

Those that hesitate will be vulnerable to loss of market share, they said.

Byron said Finastra’s ‘Financial Services – State of the Nation 2024’ report showed that 71 per cent of UAE institutions increased their budget for modernisation, such as cloud-native and API-first projects, in the last year, the highest ratio of any market surveyed.

“From a Finastra Universal Banking point of view, we’re seeing increased spend in areas such as retail banking and Islamic finance,” she said.

The Finastra senior executive said MENA banks that orchestrate partner ecosystems – instead of building everything themselves – will lead the region’s $11 billion-plus digital banking platform boom.

Emerging partnership and revenue models

Sector experts said even as the fintech-bank partnerships for the digitalisation drive are on the rise, there are various partnership and revenue-sharing models are in the works to preserve the bank’s primacy while providing partners ample room to innovate.

Though there are several constructs working in the UAE – and the wider Gulf market – risk-weighted revenue share is seen among the preferred models, they said.

In BNPL schemes, for example, the bank provides the asset – i.e., the loan – and takes on the risk, while the fintech is the delivery channel, taking a distribution fee that flexes with portfolio performance.

Another is co-branded embedded finance, where the merchant checkout still shows the bank’s brand and customers return to the bank’s app for servicing, ensuring data and cross-sell opportunities stay with the bank.

“By layering AI, machine learning and deep analytics on that core, institutions can harness real-time insight into each customer’s habits and needs.

“The result is hyper-personalised services, for example, automatically extending a low-rate loan to a customer who is edging their overdraft or providing live balance and spending-pattern alerts in a slick mobile app, while bots handle the routine back-office work,” Byron said.

She said looking ahead, the same architecture will let banks move from reactive to predictive.

“With ever-richer data feeds and predictive models, they can spot life events and market shifts before customers do, then present precisely timed, personalised solutions, turning anticipation into the next competitive edge,” Byron said.