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AI's Role in Banking Takes Focus at Financial Stability Meeting in Dakar

Monday, 27 May 2024 15:29
AI's Role in Banking Takes Focus at Financial Stability Meeting in Dakar

(Ecofin Agency) - The integration of artificial intelligence (AI) in the banking sector took center stage at the first semi-annual meeting of the Regional Consultative Group of the Financial Stability Board for Sub-Saharan Africa (GCR-ASS). The event, hosted by the Central Bank of West African States (BCEAO), was held in Dakar, Senegal, from May 22 to 23, 2023.

While the press release following the meeting did not disclose specific details, it highlighted the financial stability board's ongoing concern about the banking sector's full understanding of AI. Central banks and regulators are particularly cautious about this issue.

As a reminder, on March 24, 2024, BCEAO’s training center for banking executives held a virtual conference on AI in the banking sector. Over a thousand industry professionals participated, according to a post-event statement.

The Financial Stability Board's main concern is not AI usage itself but setting standards for banks using AI to assess risks. These standards, initially proposed for market intermediaries and asset managers, might also be applied in this context.

Currently, the focus is on AI's potential benefits for the banking sector, such as speeding up risk profile analysis. "AI could automate over 18% of tasks and accelerate the execution of financial transactions. For instance, ChatGPT, the most well-known AI application, has reduced the time required for certain tasks by 40% while improving their quality by 18%, according to a July 2023 MIT study," explained Professor Marc Israel, who led the COFEB conference.

BCEAO continues to stress its vision on these issues, advocating for improved money transfer solutions within the West African Economic and Monetary Union (WAEMU) and addressing financing needs for climate resilience. This sector, which also requires ongoing learning, could greatly benefit from AI.



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ECOFIN AGENCY offers a selection of articles translated from AGENCE ECOFIN. Founded in 2011, Agence Ecofin is a leader in Francophone Pan-African economic news, particularly in West and Central Africa. The agency publishes daily news on nine African economic sectors: Public Management, Finance, ICT, Agribusiness, Energy, Mining, Transport & Logistics, Communication, and Training.

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