Saturday 12 / July / 2025
Muscat: The rapid adoption of Artificial Intelligence (AI) in the financial services industry could create significant new opportunities for current market players, according to an industry expert.
“The development of AI has opened the door for disruption in the past when new actors brought new ways of doing business,” Elie Nachawaty, Senior Business Development Manager - Mena at Xs.com, said in an exclusive interview with the Times of Oman.
In this regard, early adopters could have a significant advantage over competitors. AI could help improve the quality of services, raising standards in the industry and offering clients more valuable and efficient trading platforms.
With data becoming ever more important, the capabilities of this technology can also help financial institutions access and analyse new sources of information, including social media and other unstructured sources, leading to new insights and opportunities, he added.
Recent developments in AI
Elaborating on the recent developments in AI and how it is changing the world of finance. Elie Nachawaty said that AI systems are being increasingly incorporated into the financial industry to help with making internal processes more efficient and improving the services provided.
AI is transforming the financial industry by improving efficiency, reducing risk, and providing better service to customers.
“These technologies are being used heavily for regulatory and compliance aspects to detect and prevent fraud in financial transactions and ensure compliance with regulatory requirements. Machine learning algorithms can analyse large volumes of data and identify patterns that may indicate fraudulent activity which helps improve transparency in the financial system,” he added.
Risk management is also a good candidate for AI systems where they are used to analyse risk factors in financial portfolios and predict potential losses. AI models can also be used to develop more accurate credit scoring models that take into account a wider range of data points. This can help reduce the risk of default and increase access to credit for underserved populations.
“Since AI-powered systems can analyse vast amounts of data, they can be used to make trading decisions in real-time, often faster than human traders which can help improve the efficiency of financial markets and improve liquidity,” Elie Nachawaty said.
Artificial intelligence has also been integrated into customer services to provide personalised services and support. These systems can answer questions, resolve issues, and provide financial advice to customers in real-time, greatly enhancing financial companies’ capacity to serve their customer base.
Potential risks in using AI
Warning about the potential risks associated with using AI in the financial services industry, Elie Nachawaty said, “Using AI in the financial services industry exposes several risks inherent to trading software and complex backend systems to make sure a brokerage runs smoothly. As such, financial institutions need to develop a strong understanding and level of control over the systems they use to ensure those risks remain manageable.”
AI systems might have access to large amounts of sensitive and confidential data, which require stringent security to avoid theft, hacking, or misuse. In addition, AI systems could be vulnerable to technical failures or errors, which could lead to incorrect decisions, system crashes, or other disruptions that can have serious consequences for financial institutions and their customers.
The complexity of AI systems could create a lack of transparency and clarity over how decisions are being made, creating challenges for regulators, customers, and other stakeholders who need to understand how these systems are being used. In this regard, regulators might need to develop new frameworks and guidelines to address the use of AI in financial services.
Benefits of using AI
Outlining the potential benefits of using AI in the financial services industry, Elie Nachawaty said, “The use of AI in the financial industry has many positive implications such as improved efficiency, better customer experience, reduced risk and increased accuracy for traders. AI has the potential to help push a new wave of growth for the financial industry.”
AI can help financial institutions automate processes and make more informed decisions, leading to improved efficiency and lower costs. The ability to analyse large volumes of data can help make predictions with a high degree of accuracy, leading to better investment decisions and reduced errors.
It can help improve the financial industry as a whole by identifying and managing various types of risks more effectively, reducing the likelihood of fraud, money laundering, and other criminal activities as well as safeguarding the institutions' operations.
Another growth vector that could be fuelled by AI is a better customer experience as AI-powered chatbots and virtual assistants can provide personalised and responsive customer service, improving the overall customer experience. This could help bring financial services to a wider audience by making them more accessible.
Elaborating further about the how use of AI can increase efficiency and accuracy in financial transactions, Elie Nachawaty said, “Current advances in artificial intelligence can be used to enhance financial institutions’ ability to operate in financial markets on the one hand as well as on the payment processing side on the other, which are two important facets of the sector.”
AI can be used to monitor financial transactions in real-time and identify potential risks, such as credit default or market volatility. This can help financial institutions make more informed decisions and reduce the risk of losses. This can lead to more advanced automated trading strategies by computing larger amounts of data more accurately.
This also applies to payment processing as AI can be used to reduce the time and resources required to complete transactions and monitor counterparty risk, fraud and other factors.
Customer experience and AI
AI can also be used to improve the customer experience within the financial services industry as customer experience could be strongly boosted by the adoption of AI as it enables personalised service, 24/7 support, predictive customer service, fraud prevention, streamlined processes, and voice assistants among other things.
Online trading brokerages especially, often have large volumes of customer data at their disposal and can use AI algorithms to provide personalised recommendations, investment advice, and financial planning, helping customers make more informed and efficient decisions that could improve their overall satisfaction with financial services.
As always-on systems, AI-powered chatbots and virtual assistants can provide 24/7 customer support, answering common questions and resolving issues in real-time, improving customer experience by providing immediate and responsive service. They can also allow customers to perform financial transactions with more ease, by providing a more intuitive and convenient interface.
“In addition, AI algorithms can analyse customer data to predict their future needs and preferences, allowing financial institutions to proactively address customer concerns and the appropriate products and services beforehand,” Elie Nachawaty further added.
