Africa’s banking institutions are planning to ramp up their investment in artificial intelligence (AI) despite many lacking formal return on investment (ROI) measurements in place, according to a new study by Backbase.

This finding indicates that banking institutions in the region consider AI a strategic necessity but also also highlights a gap in value assessment and performance measurement.

The survey, which polled 277 senior banking executives across 37 African nations, revealed that 82% of respondents who currently lack formal ROI measurement intend to expand AI spending over the next 12 months. This underscores how executives perceive AI adoption as a business imperative driven by the fear of falling behind and the promise of improved performance. It also suggests that organizations are lacking robust frameworks to assess the financial and operational impact of these investments, which can be substantial.

In particular, the study found that the executives responsible for investment decisions are the least likely to track AI ROI. Only 50% of C-suite are measuring AI ROI, compared to 82% of finance teams, which are responsible for managing profit and loss.

This disconnect present a significant governance risk because those with the authority to allocate capital are not holding themselves accountable for measuring whether those investments deliver returns. Meanwhile, those who must manage the financial consequences are left monitoring initiatives they didn’t originate or approve.

Besides measurement gaps, the study identified several obstacles hindering the adoption of AI at African banks. These include technological limitations, data privacy concerns, and a talent shortage.

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