The opportunities and challenges as we edge closer to an AI-centric world are highlighted in our new global report Ghosts in the Machine Revisited. It analyzes survey responses from 355 senior executives from financial institutions and FinTech companies, as well as interviews conducted with leading experts in the field.

The report finds increased confidence and enthusiasm for AI in the global financial markets, which are reflected in the Middle East. In fact, the region, and particularly the United Arab Emirates, has become a popular place for developers and banks to trial innovative AI solutions, with its potential expected to increase apace in the short-term.

Ghosts in the Machine Revisited is a follow up to Baker McKenzie’s 2016 research Ghosts in the Machine: Artificial intelligence, risks and regulation in financial markets.

Here are some points of interest from the report:

  1. The importance of “big data” is growing:
    AI has been around for several decades, but it has only been in the last few years that it has really taken off due to two key factors: faster and smarter technology and the availability of large amounts of relevant data.
  2. AI is changing the customer experience:
    Customer-facing applications (such as chatbots and “conversational interfaces”) are now seen as one of the key areas for the use of artificial intelligence in financial services. In 2016, only 20% of survey respondents said the biggest potential of AI was its ability to improve the customer experience. In 2018, this figure more than doubled to 42%. No other segment saw such a sizeable jump over just two years.
  3. AI is not a quick fix:
    A significant minority of 42% contends that AI capabilities in financial services have progressed slower than expected. However, respondents acknowledge that when AI is focused on clearly defined tasks it can live up to its potential.
  4. Cloud of uncertainty and gaps in regulation:
    The majority of respondents said that they see gaps in regulation, and expressed uncertainty as to whether their own organizations understand the legal risks that come with emerging technologies.

Regulatory issues concerning AI’s use in financial markets have become sharper and more nuanced. Every new piece of AI added to an institution’s operations needs to be fully understood within the context of existing regulations and for compatibility with future regulations.

View website or download PDF.

Please do not hesitate to get in touch if you would like to discuss the implications for your organization with us.

Global contacts

Stephanie Magnus Sue McLean Theodore Ling
Principal, Singapore
Financial Services Regulatory
Partner, London
Partner, Toronto

Middle East contacts

Sandeep Puri Matt Shanahan Kellie Blyth
Head of Banking & Finance, UAE Partner, UAE
Financial Services Regulatory
Counsel, UAE
IT & Communications

Sandeep Puri is the Head of the UAE Banking & Finance practice of Baker McKenzie Habib Al Mulla, based in Dubai. He has extensive experience advising on all aspects of banking, finance and capital market matters across the Middle East. Sandeep has been based in the UAE since 2003 and has worked on both conventional and Islamic finance transactions across various asset classes, including project finance, corporate finance, asset finance, real estate and capital markets (including sukuk).


Matthew Shanahan is a partner in Baker McKenzie Habib Al Mulla's UAE Banking & Finance practice, based in Dubai. He has over twenty years of experience of financial services regulators and financial services regulatory regimes in the UK and Middle East. Matthew advises on all aspects of financial services regulation, including fintech, financial markets, anti-money laundering, investigations and data protection, and has full rights of audience in the DIFC Courts.


Kellie Blyth is a Counsel and Head of the UAE Data and Technology practice of Habib Al Mulla & Partners, a member firm of Baker & McKenzie International, based in Dubai. An experienced technology and privacy lawyer, Kellie has been advising local and multinational clients in the technology, telecoms, financial services, insurance and automotive sectors, on their strategic IT projects, helping them develop, commercialise and implement digital and technology solutions whilst managing legal and regulatory risk.

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