UAE Central Bank Establishes Regulatory Framework for AI Use in the Financial Sector as part of a structured regulatory response to the growing integration of artificial intelligence (AI) and machine learning (ML) across licensed financial institutions. The new framework introduces comprehensive supervisory expectations designed to ensure that technological advancement within the banking system is supported by strong governance, transparency, and consumer protection standards.
As financial institutions increasingly deploy AI-driven tools in credit scoring, fraud detection, compliance monitoring, risk modelling, and customer engagement, the regulator has defined clear principles to manage associated risks while preserving financial stability.
Governance and Institutional Accountability
A central pillar of the framework is the requirement for a formal, documented governance structure for AI and ML systems. Financial institutions must implement oversight mechanisms proportionate to their operational scale, complexity, and risk profile.
Accountability extends beyond technical teams. Senior management and boards of directors are responsible for overseeing AI system performance, validating outputs, and ensuring compliance with regulatory and risk management standards. By embedding AI oversight within board-level governance, the Central Bank integrates technology risk into enterprise-wide supervisory controls.
Fairness, Non-Discrimination, and Ethical Standards
The framework places strong emphasis on fairness in automated decision-making. Institutions must ensure AI systems do not generate discriminatory, biased, or manipulative outcomes.
Monitoring, validation, and testing mechanisms must be implemented to detect algorithmic bias, particularly in lending decisions, pricing structures, and customer profiling. The regulatory position is clear: operational efficiency must not compromise ethical conduct or equitable treatment.
Transparency and Consumer Rights
Transparency is a core requirement under the framework. Financial institutions must clearly inform customers when AI materially influences decisions that affect them.
Consumers have the right to request explanations of AI-generated decisions and may seek human review where necessary. Alternative arrangements should be available for customers who prefer not to be subject to automated processes. These measures aim to preserve trust in digital financial services and prevent opaque decision-making practices.
Data Governance and Human Oversight
Given the reliance of AI systems on large data sets, the framework establishes strict expectations around data integrity, privacy protection, and cybersecurity compliance.
Effective human oversight is mandatory. AI systems must operate within controlled environments that allow timely intervention if anomalies or risks arise. Institutions must ensure that automated outputs are subject to appropriate supervisory review and are not relied upon without scrutiny.
Alignment with National AI Strategy
The UAE Central Bank Establishes Regulatory Framework for AI Use in the Financial Sector in alignment with the country’s broader ambition to lead in artificial intelligence innovation while maintaining strong regulatory discipline.
By formalizing supervisory expectations, the Central Bank provides clarity for financial institutions pursuing digital transformation initiatives while reinforcing accountability and governance standards.
Regulatory Implications and Forward Outlook
The UAE Central Bank Establishes Regulatory Framework for AI Use in the Financial Sector as a forward-looking supervisory measure designed to safeguard consumer rights and strengthen financial system resilience.
Licensed institutions will be required to enhance compliance structures, strengthen board-level oversight, and continuously assess AI-related risks. As technological adoption accelerates, the framework ensures that innovation within the UAE’s financial sector remains responsible, transparent, and aligned with public interest objectives.
