The Banking Executive Magazine - September 2025 Issue

Rethinking Risk and Strategy AI-driven analysis can mislead as easily as it can inform. For policymakers and regulators in the Arab world, the rise of AI also raises questions about oversight, ethics, and the balance between in- novation and prudence. Banking leaders therefore must not only adopt advanced analytical tools but also ensure that they are integrated re- sponsibly into decision-making processes. The challenge is to use AI as an enabler of speed and depth, while preserving the critical role of human expertise and strategic judg- ment. WEIGHING OPTIONS THROUGH RISK FRAMEWORKS No decision-making process is com- plete without the weighing of com- peting options. In uncertain environments, the importance of risk frameworks becomes paramount. Many institutions employ explicit strategies to mitigate risks and allo- cate resources prudently. Corporate boards increasingly use such frame- works to protect asset values, adjust capital-spending plans, and build contingency buffers. In financial markets, investors have long relied on established models such as the Kelly criterion, which calculates the optimal allocation of ISSUE 201 SEPTEMBER 2025 the BANKING EXECUTIVE 43