Only 1 in 4 Malaysian banks trust AI outputs for decisions: study

Only 26% of financial institutions have a defined strategy for AI adoption.

Only 1 in 4 (25%) of financial institutions in Malaysia would make decisions based on outputs generated by artificial intelligence (AI), according to a joint study by the Asia Institution of Chartered Bankers (AICB), the research firm Ecosystm, and AICB's Chief Risk Officers' Forum.

The study found that AI is already being deployed in areas such as know your customer (KYC) onboarding, fraud detection, anti-money laundering and counter financing terrorism.

However, only 44% of the nearly 90 banks and development financial institutions (DFIs) surveyed are in the developing stage of AI readiness, and only 17% have reached established or advanced maturity when it comes to AI adoption.

Only 26% have a defined strategy, and 79% report AI talent gaps or immature capability.

Just 1 in 3 (34%) have “meaningful in-house AI capability,” AICB, Ecosystem, and the AICB’s Chief Risk Officers’ Forum said.

Only 33% have a structured AI governance and model risk management, the study found.

A separate study found that 2 in 5 finance firms across the APAC region still lag in AI and machine learning technologies.

In a whitepaper, Money 20/20 found that whilst 61.2% of organisations have already adopted the technologies, 35.3% are still in the exploratory stage and 3.5% have not adopted the technologies.