Kuwait Finance House cuts risk processing time by 96% with Microsoft AI solutions

Kuwait Finance House (KFH) was established in 1977 as the first Islamic bank in Kuwait, setting the stage for Shari’a-compliant financial services in the region. It offers a broad range of banking services including real estate, trade finance, investment portfolios, and commercial, retail, and corporate banking.

AI-powered risk management

KFHis embracing artificial intelligence to drive its digital transformation in alignment with its strategic vision. “Under the direction of the board, KFH is advancing a critical phase in its digital transformation by integrating AI technologies. This initiative not only strengthens KFH’s leadership as a pioneering Islamic bank in the region but also positions us to extend our influence globally,” explains Haytham Alterkait, Deputy Group Chief Executive Officer, Transformation, Technology and Operations at Kuwait Finance House.

As KFH expanded its operations across 12 countries, managing risk became increasingly complex. "Previously, we would manually compile data with spreadsheets, which raised questions about data accuracy. This also slowed down our ability to provide timely insights to support business decisions and strategic direction," explains Gehad Albendari, Group Chief Risk Officer at Kuwait Finance House. The acquisition of another bank intensified the need for a centralized risk management system.

KFH turned to its long-time partner Microsoft and consolidated data from all its subsidiaries onto KFH data center powered by Microsoft services. This enabled the bank to use Microsoft Fabric to process large amounts of raw data, structure it, and move it to Microsoft data warehouse. KFH didn’t just want a centralized system—it also wanted to have more advanced data analytics. It used Microsoft AI solutions to build ‘RiskGPT,’ an in-house AI engine in collaboration with R&D institute. The AI engine is guided by KFH's business rulesand policies, enabling KFH risk management executives to maintain control over the process, rather than allowing the AI to dictate the rules. The company connected RiskGPT to Microsoft 365 Copilot and Power BI Copilot, making it easier for employees to interact with the data and get useful insights in creative, flexible ways. This setup enabled KFH to automatically handle complex risk models, such as early warning systems and financial performance metrics (like RAROC), across all branches.

Streamlined consolidation, faster decision-making

After implementing the AI-driven risk management system, KFH saw a dramatic reduction in processing times. "Evaluating credit cases used to take an average of three, and sometimes four to five days. With Microsoft AI-powered RiskGPT, we can carry out dynamic risk rating in less than an hour," Albendari highlights. ”As a result, we can now approveand provide a credit facility in a very short time.”

Reporting timelines likewise improved. "We used to spend two weeks to understand the aggregated data and reconcile figures. Now, once we upload the data to KFH data center using Microsoft Fabric, it instantly appears in Power BI," explains Albendari. “We can now spend time on business strategy, setting goals, and taking immediate actions.”

Albendari’s team now also has more time to work directly with leaders. “Instead of spending time pulling data together, my team can engage with the board, the Group CEO, and CEOs of our subsidiaries,” Albendari says. They can easily show how risks are shifting over time and join in active discussions to adjust lending guidelines.

RiskGPT has also reduced internal stress and improved teamwork. "Previously, people were often chasing other departments for data, whereas now we have an automated process. This has improved well-being within the bank," Albendari says.

This is expected to also improve customer experience. "With AI, the relationship manager can provide relevant and personalized advice to a customer very quickly using RiskGPT. Our staff can point out specific areas where the customer can improve their scores and speed up the approval process. With such targeted information, we anticipate the customer experience improving significantly with AI-powered solutions," explains Albendari. “This improvement in service will, over time, increase customer satisfaction, and, consequently, market share.”

From gatekeepers to value creators

Building on these advancements, KFH is redefining the role of risk management within the bank. Rather than acting solely as gatekeepers protecting the bank from bad asset quality, KFH's risk management now actively contributes to business growth. "For instance, we might identify that a specific sector or sub-industry is performing well, and we have data to show that the risk profile is within the tolerance. This insight enables us to suggest we engage more in that sector to enable smarter growth," Albendari adds. This approach also works well with individual customers. KFH previously used to work only with historical data in assessing a customer’s risk profile. "Now, with Microsoft AI solutions, we can also forecast a customer’s future risk profile, including their financials and cash flow," shares Albendari. “This dual-dimensional assessment improves decision accuracy, helping us optimize risk and ultimately drive profit.”

Senior leadership has embraced this effort. “When we first discussed introducing AI and automation into risk management and presented a basic proof of concept to the board, they quickly saw its strategic potential and gave us full support to move forward,” recalls Albendari. “The IT department also embraced our ambition and provided us a support facilitating the implementation of AI technologies.” Today, senior managers see risk management as a vital part of strategic decision-making. “They’ve increased our budget to keep us competitive. And we’re asked to apply AI-powered solutions to other departments,” Albendari adds.

Continuing innovation

Reflecting on the journey, KFH recognizes the value of aligning with like-minded partners. “When you understand the challenge well and have the right partner to translate it into the right code and technical solutions, you achieve great success, and I believe we’ve done that,” reflects Albendari. “Kuwait Finance House has become the first bank in Kuwait and the most advanced in the region to embrace such an initiative, pioneering the use of advanced technologies in the Group Risk Division. Microsoft has been a true partner on this journey, sharing our ambition and understanding that this is only the beginning. Choosing Microsoft was absolutely the right decision. What was once just an idea is now a reality.”

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