Banks demand clarity on AI rules as compliance concerns grow

Zimbabwean compliance officers have urged the establishment of robust regulatory frameworks and internal governance to guide the responsible adoption of artificial intelligence (AI) in the banking sector, warning that while AI offers significant opportunities, it also poses serious risks.

The call came during a panel discussion at the Institute of Bankers of Zimbabwe's annual summer conference in Cape Town, where professionals shared insights on integrating AI into anti-money laundering (AML) and counter-financing of terrorism (CFT) systems.

Vongai Bayiwa, head of compliance at TN CyberTech Bank, acknowledged the rapid pace of technological change in financial institutions. "As officers, we are also scared with the evolution of technology, adoption of AI, but it's no secret that we have to catch up," she said, noting that AI tools are already in use for digital onboarding, facial recognition, and adverse media screening.

Bayiwa stressed concerns around data privacy and human rights, highlighting the need for legislation beyond the Cyber and Data Protection Act to specifically regulate AI.

Similarly, Sharon Katsande, an AML and CFT analyst at BancABC, called for strong governance and accountability, noting that board-approved policies, data quality, and audit trails are critical for effective AI deployment.

From an operational perspective, Jacqueline Chikwanha, AFC compliance manager, explained that AI helps streamline processes by filtering low-risk alerts, allowing analysts to focus on high-risk transactions. She warned against overreliance on machines, emphasizing that human oversight remains crucial.

"You will get a letter from the regulator to say, hey, how is your system working? You can't then say, the algorithm did it," Chikwanha said.

Gugulethu Ndlela, compliance and monitoring specialist at NMB, highlighted challenges such as resistance to change, lack of expertise, budgetary constraints, and complex regulatory rules, which have hindered innovation in the sector.

The panel concluded that collaboration between public and private sectors is essential to create a secure and innovative banking environment. Ndlela suggested establishing partnerships focused on AI similar to existing initiatives on cryptocurrency.

The conference, themed "Navigating the Bank of the Future, Today," underscored the need for Zimbabwean banks to balance innovation with accountability and regulatory compliance as AI becomes increasingly integrated into financial services.