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AI will redefine banking, drive economic and social value: CBSL
- Says AI is now a “strategic imperative” as it is reshaping how banks operate and engage with customers
- Cautions the digital transformation must be guided by ethics and strong governance
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Dr. Nandalal Weerasinghe |
Local banks are accelerating their adoption of artificial intelligence (AI) and digital technologies to improve efficiency, expand financial inclusion, and support sustainable finance, according to the financial sector regulator, the Central Bank said .
CBSL Governor Dr. Nandalal Weerasinghe asserted that AI is now a “strategic imperative” for the sector, as it is reshaping how banks operate and engage with customers.
“AI enhances process accuracy, reduces operational costs, and accelerates service delivery. Advanced machine learning models enable real-time fraud detection, predictive credit scoring, and proactive compliance monitoring. Through hyper-personalisation, AI delivers tailored financial solutions, improving customer engagement and trust,” the Governor said.
He shared these views addressing the CMA Sri Lanka Silver Jubilee International Management Accounting Conference in Colombo last evening.
Dr. Weerasinghe asserted that AI-powered automation is streamlining back-end processes such as loan applications and compliance reporting, enabling banks to “eliminate manual errors, accelerate workflows, and reduce operational costs.”
These gains free human capital for “strategic thinking, complex problem solving, and building deeper customer relationships.”
Dr. Weerasinghe also reiterated the broader social impact of AI adoption.
“AI is considered one of the most effective weapons against fraud and financial crime. AI algorithms can analyse billions of transactions in real-time, detecting and predicting anomalies with an accuracy that human oversight simply cannot match. This enhances the security posture and protects the integrity of the financial system, which is a non-negotiable part of the social contract.”
He said AI can also extend access to finance for previously underserved populations, using alternative data such as mobile phone usage or utility payment histories to assess creditworthiness. Digital platforms and AI-enabled services, including chatbots and virtual assistants, are making banking services available 24/7, bridging geographic and physical barriers.
Beyond inclusion and efficiency, AI is supporting sustainable finance. AI facilitates the evaluation of Environmental, Social, and Governance (ESG) metrics, thereby channelling capital toward green investments and climate-resilient projects.
“By analysing vast datasets, we can better assess the sustainability of our investments and financing activities. AI can help us track and report on green initiatives, ensuring our actions align with our commitments,” Dr. Weerasinghe said.
However, he cautioned that the digital transformation must be guided by ethics and strong governance. The CBSL chief stressed that efforts must be made to ensure this technological revolution is inclusive and that no one is left behind.
This requires a commitment to robust governance frameworks, transparency, and a continuous investment in upskilling the workforce. In addition, he noted Sri Lanka must be transparent in its use of AI, ensuring that our models are fair, ethical, and free from discrimination.
“The future of banking is not just about moving money, it is about moving society forward. It is about leveraging the immense power of AI to create a financial system that is not only robust and profitable but also accessible, and a force for positive change,” the Governor said.
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