Artificial Intelligence (AI) is transforming industries worldwide and reportedly, also gradually transforming Zimbabwe’s financial sector. Apparently, there is a growing adoption across banking and microfinance institutions. The Reserve Bank of Zimbabwe (RBZ) is monitoring and assessing AI-driven applications, as it should.
AI Adoption in Financial Services
A recent survey conducted in the second half of 2024 by the RBZ examined the extent to which financial institutions in Zimbabwe are integrating AI into their operations. The RBZ reports that the sector is gradually embracing AI, with institutions implementing basic risk management and reporting systems.
Current AI Applications in Banking
Several financial institutions are already leveraging AI in their daily operations. Key applications include:
- Automated report generation – reducing manual workload and improving accuracy.
- Real-time compliance tracking – enhancing regulatory adherence and operational efficiency.
While these applications mark some progress, in all honesty, they are about the lowest-hanging fruit. The easiest to implement without much fuss, so to speak. However, the sector is much better than others whose AI use does not go beyond customer service functions.
This is to be expected. The financial sector has to be more technically savvy, as there is no finance without technology in this age. They already work with highly complex software and systems.
However, many have always just relied on foreign software vendors and may not actually have the inclination or ability to meaningfully utilize AI on their own. Instead, they may be waiting for their technical partners to whip up some AI integration they can simply plug into.
The RBZ says more advanced AI tools—such as predictive compliance modeling and AI-driven non-performing loan (NPL) analysis—remain largely unadopted.
The Need for AI Governance
The above means AI governance in Zimbabwe’s banking and microfinance sectors is still in its early stages. The RBZ says there is a need for:
- Clear AI strategies and policies to ensure responsible deployment.
- Enhanced regulatory frameworks to mitigate risks and maintain compliance.
- Robust risk management systems to address data security, ethical concerns, and operational vulnerabilities.
I will be honest with you, while I recognize the need for regulatory frameworks and policy, I am afraid of what the RBZ will cook up. We have seen too many RBZ policies negatively impact the economy, and even its precious financial sector at times too.
We have seen frequent and unpredictable policy changes and restrictive measures. The RBZ has often implemented policies without consulting stakeholders, which hasn’t really worked out for us.
Maybe it comes down to policies not being carefully designed or implemented, but too many RBZ policies have had unintended negative consequences—negative consequences we all saw coming, but that the RBZ somehow missed.
Anyway, that’s why I’m not excited about the RBZ talking about enhanced regulatory frameworks. I fear they may actually hinder AI adoption.
The Reserve Bank’s Role in AI Development
The RBZ says it has embarked on a financial innovation, fintech, and digitalization strategy aimed at:
- Improving operational efficiency across the financial sector.
- Strengthening risk management practices through AI-driven solutions.
- Aligning Zimbabwe with global technological developments in financial services.
Again, these goals are great. I just hope the central bank’s actions won’t have unintended negative consequences like before.
Looking Ahead: The Future of AI in Zimbabwe’s Financial Sector
On their part, financial institutions must prioritize:
- Investment in AI-driven predictive analytics to enhance risk assessment.
- Capacity building and training to equip professionals with AI-related skills.
- Collaboration between regulators and financial institutions to establish comprehensive AI governance frameworks. If the institutions sit idly, they will likely get restrictive frameworks.
That said, the report was rather refreshing. Progress is slow, but at least there is something to talk about. Given how AI could be catastrophic if not implemented properly, I guess it’s not a bad thing that advanced applications are yet to be adopted.
