CBK explores use of AI agents in banking operations

The Central Bank of Kenya (CBK) is investigating the implementation of artificial intelligence agents to streamline banking operations, as the regulatory authority seeks to harness the technology while proactively managing associated risks. Director of Research Robert Mudida revealed that the CBK is contemplating the utilization of agentic AI in various sectors, including payments, while maintaining human oversight over decisions made using this technology.

Agentic AI refers to sophisticated software systems capable of independently planning and executing multi-step tasks using digital tools, surpassing mere individual user prompt responses.

Mudida emphasized that while agentic AI presents significant opportunities, it also brings considerable dangers, necessitating a cautious approach. The CBK is gradually adopting this technology, acknowledging both its potential benefits and inherent dangers. The regulator is actively exploring more than 300 AI applications aimed at enhancing operational efficiency, among which lies a new AI-powered chatbot currently under testing.

The CBK's Research Department has already employed AI for microforecasting in volatile economic conditions and nowcasting to address data gaps, providing the Monetary Policy Committee with near-real-time insights into the country's economic landscape. The regulator's current exploration of AI agents coincides with an industry-wide trend where financial institutions are increasingly leveraging artificial intelligence to bolster payment processing, fraud detection, credit risk assessment, and customer service.

Mudida highlighted that the CBK is meticulously weighing the potential advantages of AI agents against the risks involved. Key concerns include data security, governance, and regulatory compliance, which remain paramount considerations in the bank's cautious yet proactive stance toward adopting artificial intelligence.