Artificial Intelligence Regulations Announced by Jordan's National Bank for Financial Institutions
Jordan Introduces New AI Regulatory Framework for Banking Sector
Jordan has taken a significant step towards modernizing its financial industry by introducing a new regulatory framework for the ethical and secure use of Artificial Intelligence (AI) in the banking sector. The Central Bank of Jordan (CBJ) has developed this initiative, which is a testament to its commitment to safe and effective AI adoption in banking.
The new framework, developed by the CBJ's Steering Committee on Artificial Intelligence and Emerging and Future Technologies in the Financial and Banking Sector, is designed to govern the use of AI within Jordan's banking sector. It reflects the CBJ Governor’s view that AI is a vital enabler of economic development and a key driver for the digital transformation of Jordan’s financial industry.
The framework is based on several key principles and guidelines. It emphasizes the safe, responsible, and well-considered integration of AI technologies, protecting stakeholders and the financial system. Good governance principles are also integral to ensure AI deployment aligns with sound management and oversight within banking institutions.
Comprehensive risk management protocols are mandated to identify, assess, and mitigate risks associated with AI applications. Data protection and privacy safeguards are in place to protect customer information and comply with relevant standards on confidentiality and security. The framework also stresses the importance of transparency and explainability in AI-driven decision-making.
The framework is part of Jordan's efforts to modernize its financial system and embrace digital innovation, aligning with national objectives. It aims to facilitate digital transformation and provide a flexible, secure regulatory environment that encourages innovation and fintech development. The CBJ also seeks to position Jordan as a regional financial technology hub, aligning with national goals for economic modernization and digital advancement.
The framework outlines principles and standards designed to ensure data privacy, fairness, and risk management protocols. The use of personal and financial data in AI systems must comply with existing laws and CBJ regulations for responsible handling. Clear roles and responsibilities at the executive and board levels are required for AI risk management. Institutions are expected to establish robust governance mechanisms, including AI oversight bodies and clear policies for accountability and escalation.
The framework mandates continuous testing, validation, and performance monitoring of all AI models to minimize unintended consequences. Banks and financial institutions across the Kingdom are expected to begin aligning their operations, systems, and governance models with the new regulations. The CBJ has committed to regularly reviewing and updating the framework as global standards and AI technologies evolve.
The core aim of the framework is to enhance the competitiveness of Jordan's financial sector. By adhering to these guidelines, banks and financial institutions can demonstrate their commitment to responsible AI use, fostering trust among consumers and contributing to financial stability. The framework also addresses the need to prevent algorithmic bias and discrimination, ensuring fairness in AI-driven decision-making.
This initiative aligns with Jordan's broader digital transformation strategy, aiming to enhance financial inclusion, economic efficiency, and innovation. By embracing AI, Jordan's banking sector can stay competitive in the global market, positioning itself as a regional leader in responsible fintech development.
- The Central Bank of Jordan (CBJ) has introduced a new regulatory framework for AI in the banking sector, aiming to ensure its secure and ethical use.
- The framework emphasizes the safe integration of AI technologies, prioritizing the protection of stakeholders and the financial system.
- Compliance with the framework is expected to encourage fintech development and position Jordan as a regional financial technology hub.
- The framework includes transparency and explainability requirements in AI-driven decision-making, preventing algorithmic bias and discrimination.
