AI Accountability Phase in African Banking

A new report from Backbase and African Banker magazine indicates that while commitment to artificial intelligence remains strong across the continent’s banking sector, institutions are entering a more rigorous “accountability phase.” The survey of 277 senior executives found that concerns about foreign exchange pressures, cloud costs, and data localization requirements are driving demand for demonstrable ROI.

Key Findings

• AI budgets continue to grow even among those without formal measurement frameworks
• Institutions using third-party AI vendors show returns at more than double the rate of in-house builds (71.7% vs 31%)
• Conversational AI remains popular as an entry point, but advanced applications like credit risk tools are gaining traction
• Legacy architecture is the biggest constraint, with over half citing integration challenges

Among those measuring ROI, results consistently meet or exceed projections – yet only 67.1% of all respondents currently track this metric.

Use Cases and Impact

Fraud detection and transaction monitoring are seen as the most impactful applications, followed by credit scoring for underserved populations. The report highlights AI’s potential to bring more unbanked individuals in Sub-Saharan Africa into the formal financial system.

Despite these positive trends, Backbase cautions that architectural debt is limiting progress. Currently, 55.7% of IT spending goes toward maintaining legacy systems – even as nearly half rate those systems as capable of supporting AI.

“African banks don’t have an AI problem, they have an architecture problem,” said Aymen Daoud, Regional Vice President at Backbase. “Institutions that prioritize integration will spend less, comply more easily, and be better positioned for future technology shifts.” The full report is available on the Backbase website.