UAE banks face AI disruption: Will customers demand better returns?

Dubai: There was a recent report that Citigroup and Bank of America have restricted AI agents’ access to customer accounts. JPMorgan has also signalled restrictions. Their concerns include security, liability and the prospect of bots moving idle cash elsewhere for better returns. Those are legitimate worries. But there is a commercial issue here too: what happens when customers stop leaving money unattended?

After 40 years in banking, I can appreciate both sides. Nobody wants software transferring the rent money without proper authority. Equally, customers are entitled to ask why their surplus cash should earn little when better options exist.

For UAE banks, this is a question worth addressing before someone else answers it for them. 

Value of doing nothing

Current and savings accounts, known as CASA, are among banking’s most prized sources of funding. Customers value convenience and access. Banks benefit because these balances generally cost less than fixed deposits or market borrowing.

Much of this money serves a purpose. Households need cash for bills; businesses must meet payroll and supplier payments. But some balances remain untouched because their owners have better things to do than compare accounts and read promotional conditions.

An AI agent could do that homework. Imagine a customer telling an assistant: “Keep enough for my usual expenses and an emergency buffer. Find a better return for the rest, without locking it away.”

That is a modest instruction. Repeated across thousands of households and businesses, however, it could become an expensive one for banks.

The UAE arithmetic

Central Bank figures put UAE bank deposits at Dh3.5 trillion at the end of August 2026. Within that total, current, savings and call-account balances for corporates and individuals stood at Dh1.67 trillion. This is not a complete measure of CASA, but it gives a sense of the scale of funding potentially exposed to more active cash management.

Consider a simple scenario across the sector. Suppose balances equivalent to 25% of that Dh1.67 trillion reference pool became more rate-sensitive, and banks had to pay an additional two percentage points to retain or replace the funding - the annual cost would be approximately Dh8.2 billion.

These are scenarios, not forecasts. They assume unchanged balances and asset income, and exclude banks’ responses. Nor should anyone assume every dirham in the reference pool currently earns nothing. Nevertheless, even if only one in four dirhams migrates for higher yield, the sums are meaningful beside the UAE banking sector’s Dh90 billion net profit in 2025. Higher funding costs would initially squeeze net interest income rather than translate directly into an identical reduction in after-tax profit.

Importantly, deposits moving between UAE banks do not vanish from the system. The more immediate threat may be that banks retain the money but have to pay more for it. 

Safety cannot become an excuse

There is a genuine unresolved issue: who pays when an agent gets something wrong? Bank of America’s Brian Moynihan argues that a human should authorise money leaving an account. Citi says its restrictions help safeguard customers’ accounts and information.

 Those concerns deserve serious answers. An agent must understand withdrawal restrictions, promotional rates, liquidity needs and, where relevant, Sharia-compliant preferences. Chasing the highest advertised number is not responsible cash management.

 But protecting customers and protecting cheap funding are different objectives. Banks should be honest about the distinction.

The UAE has an opportunity to establish sensible rules through AlTareq, its Open Finance initiative. HSBC’s published guidance explains that regulated providers can, with explicit permission, access financial information and initiate services. Customers can pause or withdraw consent, and the bank still executes payments initiated through the provider. This is controlled access, not an invitation to hand a bot the banking password.

Give customers a reason to stay

UAE banks should build their own cash-management agents, with clear permissions and sensible limits. They should help customers identify genuinely surplus balances and offer suitable choices before an outside provider does.

That will require uncomfortable decisions. A useful agent may recommend something that reduces its own bank’s margin. But customers will quickly notice an assistant that is clever about everything except finding them a better return.

Convenience, advice and trust can still earn loyalty. An attractive app alone cannot justify an unattractive deal indefinitely.

For years, banks have invested in technology that makes customers’ money easier to manage. They should not be surprised when customers finally use it to manage that money better.