CBK calls for responsible innovation in Kenya’s financial sector
By Faith Lagat, November 20, 2025The Central Bank of Kenya (CBK) has reaffirmed its commitment to responsible innovation as artificial intelligence continues to reshape the country’s financial ecosystem.
Speaking during the opening of the CBK Artificial Intelligence (AI) Hackathon 2025 in Nairobi on November 20, 2025, the Director of Bank Supervision, Matu Mugo, said AI presents vast opportunities but must be adopted with ethics, accountability and strong governance frameworks.
“CBK’s philosophy is clear: we want to maximise the benefits of technology while minimising the risks,” Mugo said.
“We support innovation that broadens opportunity and inclusion while protecting stability, consumers, and trust in the financial system.”
Survey shows growing AI adoption.
According to a recent CBK survey, half of Kenyan financial institutions have already adopted AI tools, mostly to improve credit scoring, enhance fraud detection and boost customer service through chatbots and machine learning platforms.
Institutions that reported the most success were those that combined AI innovation with clear strategies, strong data governance policies, ethical guidelines and human oversight.
The survey also highlighted pressing challenges facing the sector. Fifty-nine per cent of respondents identified data quality and governance as the greatest risk, while 54 per cent pointed to cybersecurity vulnerabilities. Another 52 per cent cited a shortage of skilled AI professionals.
The report noted that many institutions are moving away from opaque “black box” systems in favour of explainable AI and are adopting new methods to minimise bias in automated decision-making.
“Ninety-three percent of surveyed institutions have asked CBK to issue formal guidance on AI,” Mugo noted. “They want clarity on governance and compliance, risk management frameworks, and incident reporting.”
Guidance note in final stages
In response to the growing demand for regulatory clarity, the Central Bank is finalising a Guidance Note on Artificial Intelligence. The document will outline expectations, safeguards and recommended practices for responsible deployment without hindering innovation.
“Looking forward, CBK is committed to supporting safe and responsible use of AI. We are formulating a Guidance Note on Artificial Intelligence, which will provide clarity on expectations, risks, safeguards, and good practices.”
“Innovation thrives where there is clarity, trust, and accountability,” the director said. “Our upcoming guidance will ensure human oversight remains central, especially when AI decisions affect people’s lives.”
“Today marks a step toward ensuring AI becomes a genuine force for good in Kenya and across Africa,” he concluded.