Artificial Intelligence (AI) in Banking and Securities Activities– Transforming Decision-Making
Part 1 of the series: Algorithmic Consent, Liability and Corporate Governance – How Kuwait Financial Institutions Must Make AI Work with the Law
By Emile Khoury Hélou (Of Counsel)
AI’s Rapid Adoption in Finance
AI is no longer limited to pilot initiatives—it is deployed at scale across banking and financial markets, fundamentally reshaping how decisions are made and executed. In securities activities, AI powers automated trading and portfolio management, executing transactions in milliseconds using market signals and predictive analytics.
Robo-advisors, which are now regulated by the Kuwait Capital Markets Authority (CMA) under Book 19, automatically rebalance portfolios based on predefined risk profiles. High-frequency algorithms analyse vast datasets and optimise buy/sell decisions—often independent of direct human judgment.
AI Applications in Banking
AI is equally transformative in banking. Automated AI systems increasingly make credit and loan decisions, assessing creditworthiness through income, spending patterns, and alternative data such as utility payments. Underwriting that once took days can now be completed within minutes.
AI is also central to fraud detection and risk management, monitoring millions of transactions in real time and intercepting anomalies before they escalate. Predictive analytics identify emerging defaults or market risks early, allowing institutions to intervene proactively.
Implications
AI brings efficiency, speed, and accuracy—but As autonomous AI systems increasingly perform actions that resemble legal consent, often through processes that may not be fully observable or intelligible, a critical question emerges: how can the law determine whose consent is being given, and who bears responsibility for the consequences of system hallucinations, where false information is generated, or inference errors, where are misinterpreted and incorrect outcomes result? These questions are examined in the next article: Algorithmic consent and liability – When AI acts: How the law interprets consent and allocates liability?
Next in the series: Algorithmic consent and liability– When AI acts: How the law interprets consent and allocates liability?
