How GenAI is Influencing the Financial Services Sector in the Middle East

A recent World Economic Forum article revealed that AI could contribute $320 billion to the Middle East’s economy by 2030, with financial services playing an important role in driving this growth. From boosting workforce productivity to delivering culturally nuanced customer experiences and enhancing risk management, Generative AI (GenAI) is unlocking immense possibilities for financial institutions in the region. However, success depends not on adopting AI but on how banks and other financial services integrate GenAI into their business to align with regional market demands and regulatory compliance.  

This article analyzes GenAI’s potential across Middle Eastern banking, insurance, capital markets, and payments, featuring localized case studies from Emirates NBD, Al Rajhi Bank, and regional fintech leaders. It provides actionable insights for adopting AI-driven innovation while adhering to Sharia principles, data sovereignty laws, and GCC regulatory frameworks. 

The Financial Services Ecosystem

Middle Eastern financial services operate within four core domains: 

Key Regional Challenges: 

• Sharia Compliance: Ensuring AI models align with prohibitions on riba (interest) and gharar (excessive uncertainty). 
• Data Localization: Adhering to UAE’s PDPL and Saudi Arabia’s NCA regulations requiring in-country data storage. 

Generative AI Use Cases in Middle Eastern Financial Services 

Customer support in the Middle East is often hindered by language barriers and high agent turnover. As there is a shortage of multilingual agents, call centers often struggle to satisfy Arabic-speaking customers seeking assistance with complex Islamic financial products. 

Solution: GenAI, paired with Arabic-optimized models, addresses this challenge through speech-to-text technology and intent parsing, enabling quick, efficient responses. For instance, Emirates NBD’s AI Assistant processes over 500,000 queries monthly in Arabic and English, significantly reducing human agent escalations by 80%, with 95% accuracy in resolving Hajj savings plan inquiries. 

Investment analysts in the Middle East face challenges in assessing the impact of major economic initiatives like Saudi Arabia’s Vision 2030 or Qatar's LNG market shifts. Traditional research methods are slow, making responding to rapidly changing market conditions difficult. 

Solution: GenAI accelerates investment research by analyzing Arabic financial content, such as earnings calls and regulatory filings. For example, Qatar National Bank’s AI Research Hub leverages GenAI to identify ESG-compliant investment opportunities. By analyzing regional developments like NEOM’s hydrogen targets and ACWA Power’s project pipeline, the bank generates personalized portfolios aligned with UAE’s Net Zero 2050 incentives. This approach has resulted in 70% faster research cycles and a 30% increase in assets under management (AUM) from Kuwaiti institutional clients. 

Solution: Oman Insurance integrates IoT data from desert vehicle sensors with AI to dynamically adjust premiums based on off-road driving patterns. Additionally, AI-driven climate models, such as those developed by King Abdullah University, are used to predict flood risks for properties in Jeddah, which has led to a 45% reduction in claim disputes. Similarly, Salama Insurance uses AI to validate auto claims by cross-referencing traffic authority databases and repair invoices submitted via WhatsApp. When a Dubai client reports a collision, AI verifies the details by analyzing data from the RTA’s Hayyak app and photos of the vehicle's damage, timestamped within an hour. This AI-driven approach has resulted in 85% of claims being settled in under 10 minutes and a 50% decrease in fraud rates in Sharjah.  

Solution: AI-driven behavioral clustering allows financial institutions to segment customers into specific groups, such as "Luxury Expo 2020 Investors" or "Makkah Pilgrimage Savers." This enables highly targeted marketing efforts. Additionally, AI-generated content can craft personalized Arabic scripts using dialect-specific idioms, ensuring messages are culturally relevant (e.g., Emirati versus Saudi Arabic). For example, Al Rajhi Bank uses GenAI to analyze spending patterns at local markets like Dates Markets and Souq Al Haraj to customize offers. A Riyadh client might receive personalized offers like "Eid Offers: Earn 10x points on Lazurdi gold purchases!  

Ethical Challenges and Regional Mitigation 

While GenAI offers immense opportunities for Middle Eastern financial services, several ethical and regulatory concerns must be taken into account while integrating it:   

• Problem: AI models may inadvertently perpetuate biases in customer profiling, such as disproportionately disadvantaging specific demographic groups during loan or account eligibility assessments. 
• Solution: Leveraging synthetic data generation to rebalance training datasets and third-party audits by regional regulatory bodies to ensure equitable algorithmic outcomes. 
  

• Problem: AI systems risk generating outputs that violate region-specific financial principles, such as Sharia prohibitions, or contradict local regulatory mandates. 
• Solution: Implementing compliance guardrails via APIs or rule-based frameworks that automatically screen and block non-compliant outputs, aligned with regional ethical and legal standards. 

• Problem: Cross-border data processing or cloud-based AI training may breach national data sovereignty laws requiring sensitive customer information to remain within geographic boundaries. 

• Solution: Deploying locally hosted AI models developed in collaboration with regional academic and regulatory institutions, ensuring data residency and adherence to jurisdictional mandates.

Conclusion 

Generative AI is reshaping Middle Eastern finance, with institutions like Emirates and Al Rajhi Bank achieving 50% faster service delivery and 20% cost savings. Success requires balancing innovation with Sharia compliance and GCC regulatory alignment. Middle Eastern banks can lead the global AI frontier by adopting Arabic-first AI, desert-risk models, and culturally attuned marketing. 

Want to learn how Xebia is helping companies in the financial services industry drive business value through GenAI projects? Contact us today! 

References 

• Emirates NBD (2023).  AI-Driven Customer Service: A GCC Case Study. 
  
• Saudi Data and AI Authority (SDAIA) (2024).  Arabic NLP for Financial Services. 
  
• Qatar National Bank (2024). Vision 2030 Investment Analysis with GenAI. 
  
• UAE Insurance Authority (2023).  AI in Takaful: Regulatory Guidelines. 
  
• Mubasher Intelligence (2024). GCC Market Sentiment Tools. 
  
• Salama Insurance (2024).  AI Claims Processing in the GCC. 
  
• World Economic Forum (2025). Middle Eastern Banks are set for an AI Makeover