UAE Banks Face AI Disruption: Will Customers Demand Better Returns?
Dubai: There was a recent report that Citigroup and Bank of America have restricted AI agents’ access to customer accounts. JPMorgan has also signalled restrictions. Their concerns include security, liability and the prospect of bots moving idle cash elsewhere for better returns. Those are legitimate worries. But there is a commercial issue here too: what happens when customers stop leaving money…
Dubai-based banks are grappling with the potential impact of artificial intelligence on their operations, as concerns over security, liability, and the prospect of customer money being moved elsewhere for better returns grow. Citigroup, Bank of America, and JPMorgan have all taken steps to restrict AI agents' access to customer accounts. However, this AI disruption also presents an opportunity for UAE banks to offer improved services to their customers.
Current and savings accounts, known as CASA, are among the most valued funding sources for banks. These accounts offer convenience and easy access to customers, while banks benefit from lower funding costs. Many customers have surplus funds that could be put to better use, but they often lack the time or knowledge to compare accounts and promotional conditions. An AI agent could streamline this process, helping customers find better returns for their surplus money.
UAE bank deposits amount to Dh 3.5 trillion, with Dh 1656 billion in current, savings, and call-account balances for individuals and corporations. If 25% of this pool became more rate-sensitive, banks could face an additional two percentage points in funding costs, resulting in an annual expense of around Dh 8.2 billion. While these figures are estimates, the potential financial impact is significant, especially when compared to the UAE banking sector's net profit of Dh90 billion in 2025.
The key question for UAE banks is whether safety concerns or the prospect of better returns will ultimately drive customers to seek alternative solutions. Banks must address these issues before competitors do, establishing clear rules and limitations for AI agents through initiatives like AlTareq, the UAE's Open Finance project. By offering controlled access to customer information and financial services, banks can mitigate risks while still providing valuable cash-management services.
Ultimately, UAE banks should develop their own cash-management agents with stringent permissions and sensible limits. By helping customers identify surplus balances and offering suitable alternatives, banks can differentiate themselves from competitors and foster customer loyalty. Convenience, advice, and trust are crucial factors in maintaining customer relationships, even when the financial margins may be thin.
As technology advances, banks must adapt to meet customer expectations and deliver value beyond simple app functionality.
Written by urgent.news from Gulf News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
