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Aden - Yasmine El Tohamy - Financial service providers are being pushed out of their comfort zones to remain relevant in the age of digital disruption and it might be one of the best things to ever happen to the industry.
Competition across the industry in the UAE and, indeed, the broader Middle East and Africa (MEA) region is fierce. New digital players and offerings uniquely suited to the region's needs are emerging all the time. This melting pot of progress and innovation has catapulted the industry forward as companies begin harnessing the power of AI.
In general, business leaders across the UAE are committed to furthering the Artificial intelligence (AI) agenda within their organisations. In fact, the recent Microsoft AI Maturity Report in the Middle East and Africa shows 94 per cent of companies in the UAE report involvement in AI at executive management level - the highest per centage of any country in the region.
This is particularly the case with financial service companies - while the majority of businesses across the broader region are still in the piloting stages of AI, 38 per cent of companies in the financial services sector are already putting AI to active use across their daily operations.
Harnessing AI for competitive advantage
Progress in AI adoption has almost become a self-fulfilling prophecy, with the sector holding notably high expectations around the benefits of AI. As it stands, 62 per cent of regional service providers expect AI to change the fundamentals of how they do business significantly in the next five years. Across the sector, businesses are using AI to reinvent their operations - from using machine learning to detect fraud to reducing compliance and regulatory costs via technologies that digest vast quantities of legal documents.
In many ways the progress made by AI forerunners in financial services provides us with a helpful blueprint of how companies can successfully get started on their AI journeys. In fact, the AI Maturity Report reveals there are at least three standout capabilities that financial companies have used to gain that elusive AI advantage:
Build a solid foundation in data
AI-mature companies have strong foundations in data management - typically because they are already rich in the quality customer data needed to build digital ecosystems.
This is key, because developing precise and useful AI solutions requires not only lots of data, but also accurate data that is appropriately structured and labeled. This is why forward-thinking businesses are investing significantly in more foundational data activities to create a platform for AI solutions in the future.
Taking a page out of the book of these more advanced AI companies, businesses must start taking steps to ensure the value of data is understood and prioritised throughout their organisations. While building data structures, it's also important to remember unstructured data. In fact, 53 per cent of regional companies more advanced in AI use both structured and unstructured data.
Establish a culture of experimentation
One area of AI competency where the industry is significantly ahead of its regional counterparts is the development of an open culture.
It's no coincidence that some of the most advanced AI companies are good at establishing links and co-operation across their organisations to foster collaboration and learning. In fact, many experts agree it's not only technical skills that hold up AI projects, but also the need for a culture of experimentation.
We see this brought to life in the digital transformation strategy of AI industry leaders in the UAE like the Anglo-Gulf Trade Bank (AGTB). As the world's first fully digital trade bank, AGTB's entire market proposition is based on simplifying and supplying client-centric trade banking. Having assessed the most common ways banks service their clients, it knew the manual approach of sending and uploading files, dealing with scans and excessive paperwork had to change. As such AGTB set out to shake things up by facilitating digital ecosystems that would enable data-driven operations. The end goal was a fully automated end-to-end solution, enabled by new tools like data analytics and rule-based algorithms to help it better understand data.
One specific solution the company looked at was enterprise resource planning integration and how API connectivity could be used to manage the information exchange between internal and client-servicing platforms.The bank didn't want its clients to have to prepare files that then needed to be sent to the bank and processed. Instead it created a channel of interaction and communication with the client so that data could flow seamlessly based on algorithms.
By experimenting with data and AI, AGTB has sped up its internal processes and is making smarter decisions. Through Microsoft's intelligent cloud-based security and data solutions, the bank now has a business built on data, enabling it to access a single view of the client and its banking operations.
Access skills from external alliances
Lack of talent remains one of the greatest barriers to implementation of AI within business operations. This is undoubtedly why AI leaders are creating collaborative alliances with external partners that allow them to tap into larger pools of capabilities and talent, ultimately reducing the time taken to develop or deploy working solutions.
Naturally, organisations also need to start building in-house capabilities for the long-term, but strategically engaging a wider ecosystem of consultants and advisors can help them access the skills they need to execute AI projects today while upskilling internal resources for the future. While there are a number of other critical competencies necessary to build a solid foundation for AI, it's clear from analysing key players that focusing on these three key capabilities can provide a solid starting point. By developing these competencies innovative financial services companies in the UAE are making giant leaps - and the fruits of their efforts are just the beginning.
- Naim Yazbeck is regional director, enterprise and partner group (EPG) at Microsoft UAE. Views expressed here are his own and do not reflect the newspaper's policy.
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