- Emerging markets see AI as opportunity.
- AI tools unlock growth and inclusion.
- Arab banks can gain through smart adoption.
Across many emerging economies, a quiet but unmistakable shift is taking place: populations, institutions, and policymakers are embracing artificial intelligence with notable confidence. Unlike the anxiety that often colors public debates in advanced economies, discussions in developing regions reflect a deeper sense of possibility—an understanding that AI, if approached wisely, can support national development strategies, strengthen human capital, and broaden access to opportunities.
This growing optimism is not theoretical. It is rooted in lived experience, visible progress, and a recognition that AI need not be the exclusive domain of nations leading in model construction. Rather, its potential lies in how countries deploy, adapt, and refine the tools already available. For Arab economies—diverse in their capacities, ambitions, and demographics—this global trend offers critical insights, practical lessons, and timely opportunities.
A Surprising Reality: Emerging Economies Are More Optimistic About AI
During a recent visit to Kazakhstan, observers were struck by the speed at which conversations about AI had entered the mainstream. Academics, entrepreneurs, and public officials spoke about it not with hesitation, but with conviction—seeing it as a means to address longstanding structural issues, from limited economic diversification to the challenge of extending essential services to remote regions.
This experience mirrors broader global patterns. The United Nations’ latest Human Development findings show that people in emerging markets are not only aware of AI’s benefits but are, in many cases, significantly more optimistic than populations in advanced economies. While US and European debates often focus on job displacement or labor-market disruption, citizens in developing regions tend to highlight the potential for stronger collaboration between humans and machines.
This contrast, while intriguing, is logical. For many emerging economies, the question is not whether AI will restructure existing industries; it is whether AI can fill gaps that otherwise require substantial capital, infrastructure, or specialized labor—gaps that may take decades to close through traditional means.
Beyond Model Building: A Different Path to AI Adoption
Concerns about a widening “AI digital divide” typically stem from the fact that only a handful of countries possess the resources and infrastructure to build large-scale models. These systems require extraordinary investment, deep pools of high-end technical talent, and advanced hardware—all areas where countries like the United States and China have an undeniable lead.
However, focusing exclusively on model construction obscures the areas where most countries can gain real advantage. AI’s value does not lie solely in building new systems, but also in the ability to apply existing ones effectively.
The rapid growth of open-source models—many of them developed in China—means that the cost of fine-tuning, adapting, and deploying AI tools is falling sharply. For governments, banks, and private institutions in emerging economies, this levels the playing field. Innovation and competitive advantage no longer depend on developing foundational models, but on how existing technologies are employed to address context-specific challenges.
This shift is especially important for the Arab region, where national digital strategies are accelerating, population growth remains dynamic, and governments increasingly look to technology to strengthen public services and economic resilience.
The Infrastructure Foundations: Electricity, Connectivity, and Data Mobility
To fully utilize AI tools, emerging economies must establish certain essential foundations. These requirements, while modest compared to those for building AI models, are nonetheless critical:
- Reliable electricity, ensuring uninterrupted digital access and operational stability
- Fast and affordable mobile internet, enabling widespread participation in the digital economy
- Sound regulatory frameworks that allow data to move securely and efficiently, subject to appropriate safeguards
The importance of secure and frictionless data mobility cannot be overstated. Many of the most impactful AI applications depend on the availability of structured, high-quality data that can be shared across platforms. India’s Unified Payments Interface (UPI) is often referenced as a model for such systems—a mechanism that supports efficient payments and allows individuals to control how their financial data is shared.
For Arab countries, several of which already possess robust telecommunications infrastructure and well-designed financial regulations, building similar systems is not only feasible but strategically important. The ability to manage, govern, and benefit from domestic data will increasingly define a country’s capacity to develop competitive AI-enabled sectors.
Financial Inclusion as a Key Opportunity
One of the most consequential areas where emerging economies can benefit from AI is financial inclusion. For individuals with limited assets, inconsistent income records, or fragmented documentation—common realities across many developing markets—traditional banking channels often remain inaccessible.
Digitalization, however, changes the equation.
As societies shift from cash-based economies to digital payment systems, millions of families and small enterprises begin to generate financial data for the first time. Properly governed, this data becomes the backbone of modern credit assessment.
AI-enabled credit scoring offers the possibility of creating financial identities for people previously excluded from the formal financial system. This opens the door to:
- Microcredit that is both scalable and sustainable
- Broader participation in the commercial ecosystem
- Higher rates of entrepreneurship
- More inclusive economic growth
For Arab banks—particularly those operating in countries with young populations, large unbanked segments, or significant rural communities—AI-driven credit analytics represent a promising direction. They enable institutions to expand their customer base responsibly, reduce risk, and meet national financial inclusion goals set by central banks and regulatory authorities.
The Expanding Role of E-Commerce and SMEs
Small and medium-sized enterprises (SMEs) form the backbone of most emerging economies. Yet many face structural limitations: restricted access to markets, reduced visibility, and limited capacity to scale.
The spread of digital commerce platforms—enhanced by AI’s ability to analyze demand patterns, forecast consumer behavior, and support targeted marketing—gives SMEs a powerful toolset. With more accessible online marketplaces, even very small enterprises can reach larger audiences, diversify income streams, and compete more effectively.
In the Arab region, where SMEs form a critical component of national development strategies from the Gulf to North Africa, AI-enabled e-commerce ecosystems offer a pathway to greater competitiveness. Banks and financial institutions can support this shift through tailored SME financing products, supply chain solutions, and integrated digital services.
Extending Services in Health and Education
Emerging economies often struggle with uneven geographic distribution of health care and education services. Here, AI-powered applications are already demonstrating tangible benefits:
- Remote diagnostic tools allow doctors to reach communities far from urban centers.
- Digital learning assistants help students master subjects without needing constant in-person instruction.
- Personalized education platforms support learners with varying abilities and backgrounds.
These tools ultimately strengthen human capital—one of the most important factors in long-term economic development. For Arab policymakers, especially in countries where population growth is outpacing the expansion of educational and medical infrastructure, AI-enabled solutions offer a cost-effective way to widen access without compromising quality.
AI as a Catalyst for Skill Development and Productivity
Another important dimension involves workforce development. In many service-sector roles—customer service, logistics, retail, and even frontier fields like software development—AI tools can accelerate learning curves and improve productivity.
An inexperienced employee, guided by an AI assistant that draws on accumulated operational experience, can deliver higher-quality work earlier in the training cycle. This leads to faster onboarding, more consistent service standards, and more efficient use of human talent.
For Arab financial institutions, which often invest heavily in training due to fast-paced regulatory and technological shifts, AI-assisted learning could significantly reduce training costs while improving outcomes. Banks operating large call centers, back-office processing hubs, and digital support teams stand to benefit most.
Why Emerging Economies Are Well Positioned
The emerging world’s optimistic approach to AI has a clear rationale: the technology enables countries to leapfrog traditional barriers that once limited economic and social progress. While they may not build frontier AI models, they are well positioned to apply them at scale.
For Arab economies, this perspective offers a valuable insight. The question is not whether the region should attempt to compete in foundational model development—an area dominated by global technology giants—but how it can accelerate development through targeted adoption, strategic regulation, and a commitment to building the right digital foundations.
Many Arab states have already made significant strides in digital governance, fintech expansion, and national AI strategies. The opportunity now is to translate these efforts into broad-based adoption across financial services, government institutions, and private-sector industries.
A Forward-Looking Recommendation for Arab Banking Leaders
To fully benefit from AI’s expanding capabilities, Arab banks and financial institutions should embrace a pragmatic and forward-leaning approach. Three priorities stand out:
- Invest in secure, interoperable data ecosystems that empower individuals while allowing institutions to develop advanced AI applications responsibly.
- Leverage AI-driven credit analytics, SME tools, and digital payment infrastructure to enhance financial inclusion and expand the bankable population.
- Adopt AI-enabled training and operational systems to improve workforce skills, raise productivity, and reduce long-term costs.
By prioritizing these areas, Arab banking leaders can ensure that the region not only keeps pace with global developments but also uses AI to advance economic resilience, social development, and financial sector competitiveness. The opportunity is substantial—and the moment to act is now.
