Category: Daily Financial Times

LOLC Al-Falaah Takaful Life and LOLC Al-Falaah Takaful General have been honoured with four distinguished awards at the 10th Islamic Finance Forum of South Asia (IFFSA) Awards 2025, in recognition of their outstanding contributions to Shariah-compliant takaful solutions during 2024. This marks the first time both entities have been recognised simultaneously at this esteemed regional forum, representing a remarkable milestone in their journey.

The accolades include Silver and Bronze awards for Takaful Window/Unit of the Year 2024/25 for Life and General respectively, along with Bronze and Merit awards for Islamic NBFI Window/Unit of the Year 2024/25 for Life and General.

These recognitions highlight LOLC Al-Falaah Takaful’s commitment, as one of the fastest-growing Takaful entities in Sri Lanka, to delivering trusted, Shariah-compliant protection solutions across both Life and General segments, while continuously addressing the evolving needs of customers and communities.

LOLC Al-Falaah Takaful Head of Takaful Shathik Niyas stated, ‘We are truly honoured to receive this recognition for both our Life and General companies at IFFSA 2025. This milestone serves as a powerful encouragement for our ongoing efforts to deliver takaful solutions that are thoughtfully designed to meet the diverse needs of our communities, supported by service excellence and advanced digital capabilities. We extend our heartfelt gratitude to our valued customers for their continued trust and confidence. With our extensive branch network, dedicated takaful centres, experienced sales teams, and innovative digital platforms, we remain steadfast in empowering individuals, families, and businesses to build secure and resilient financial futures.’

Established under LOLC Insurance, LOLC Al-Falaah Takaful General commenced operations in 2014, followed by LOLC Al-Falaah Takaful Life in 2016. Today, the company offers a comprehensive portfolio of Shariah-compliant solutions, including Family Protection and Loan Protection Plans, Motor Takaful, Fire Takaful, Travel Takaful, Solar Takaful, Liability Takaful, and Engineering Takaful. Through these offerings, LOLC Al-Falaah Takaful continues to set new industry benchmarks and standards in Sri Lanka’s takaful sector by integrating innovation, customer-centricity, and digital transformation to deliver meaningful, Shariah-compliant financial protection that supports long-term resilience and prosperity.

The annual cost of cybercrime to Sri Lanka could range between $ 450 million and $ 1 billion, Asian Development Bank (ADB) Digital Sector Office Director Antonio Zaballos said yesterday, calling for stronger cybersecurity measures and a shift in national awareness as the country expands its digital economy.

Speaking at the ADB’s Serendipity Knowledge Program (SKOP) on Digital Transformation: Cybersecurity and Data Protection for Digital Economy Development held in Colombo, Zaballos said global losses from cybercrime have reached $ 10.5 trillion, or nearly 9% of the world’s GDP.

‘If we were just doing a rough estimate, and we consider just between 0.5-1% of the total GDP of Sri Lanka, we would be talking around $ 450 million to $ 1 billion a year related to cybercrime,’ he said.

He cautioned that as economies become increasingly connected, they also become more vulnerable. ‘The more connected we are, the more at risk we are,’ Zaballos said, describing cybersecurity as both a development and technical challenge that must be addressed through cooperation between governments, the private sector, and citizens.

Data Protection Authority Chairman Rajeeva Bandaranaike said Sri Lanka’s challenge lies not only in technology but in fostering a culture of data privacy and cybersecurity.

‘We don’t have a culture of data privacy and data protection, and awareness levels are very low,’ he said. ‘It’s about policymakers taking ownership and embedding a sense of responsibility across society.’

Bandaranaike said Sri Lanka’s forthcoming Data Protection Act and cybersecurity legislation would lay the groundwork for better governance, but long-term awareness building was equally important. ‘Like helmets and seatbelts, data protection will eventually become second nature, but it requires consistent enforcement and education,’ he said.

The Regional Development Bank (RDB), Sri Lanka’s premier state-owned development bank, third largest branch network with 272 branches, has announced the appointment of Dr. Asanga Tennakoon as its new General Manager/Chief Executive Officer, effective from 13 October 2025.

Dr. Tennakoon is a highly accomplished and versatile C-suite banking professional with over 25 years of progressive experience in wholesale banking, covering corporate and SME segments across Sri Lanka and the Middle East. He is a specialist in credit appraisal, risk management, project financing and asset management, with a consistent track record of delivering strategic business growth and operational excellence.

Prior to joining RDB he served as Vice President – Corporate Banking at Union Bank of Colombo PLC, and led a dynamic team in driving high-value client relationships and enhancing portfolio performance. Throughout his tenure at Union Bank, Dr. Tennakoon has held several senior leadership roles, including Assistant Vice President and Zonal Head, where he successfully managed large credit portfolios, and implemented central credit processing.

His international exposure includes a role at Doha Bank in Qatar and Dubai, where he managed corporate clients during the global financial crisis, effectively restructuring non-performing assets. At Sampath Bank PLC, he contributed to the bank’s success by managing corporate accounts and conducting credit mentoring and other training programs.

Dr. Tennakoon holds a Doctor of Business Administration (DBA) from Universidad Azteca, a Master’s in Financial Economics from University of Colombo and multiple professional qualifications in banking and finance. He is an Associate Member of the Institute of Bankers of Sri Lanka and a member of several other prestigious professional bodies.

With deep expertise in strategic planning, regulatory compliance, customer relationship management and team leadership, Dr. Tennakoon continues to make significant contributions to the banking sector, focused on value creation, sustainable growth, and innovation.

RDB Bank, with the objectives to facilitate the overall regional economic development of Sri Lanka, promotes the development activities of the country such as agriculture, livestock, trade and commerce, fisheries, tourism, and industry. Complemented by 272 branches along with a 6 million customer base island-wide, it empowers all Sri Lankans over the 40 years of the bank’s history.

The Asian Development Bank (ADB) yesterday urged Sri Lanka to treat cybersecurity and data protection as central pillars of its digital transformation agenda, warning that national competitiveness and public trust in digital services will depend on how well the country safeguards its information infrastructure.

ADB Sectors Department 2 Director General Cleo Kawawaki said cybersecurity is not only a policy or institutional concern but a shared responsibility that must extend across government, business, and individuals.

‘This morning, I woke up with a phishing email telling me that my app had been accessed from somewhere else and that I should press a button to fix it,’ she said at the ADB Serendipity Knowledge Program (SKOP) on Digital Transformation: Cybersecurity and Data Protection for Digital Economy Development yesterday in Colombo, in partnership with the Department of National Planning of the Finance Ministry.

‘We all know what that means. It means that if I press that, it steals all my details. Cybersecurity threatens every single one of us. All of the promises of the digital economy can be undone by one person not watching out and pressing that button,’ she added.

She said that while technology and policy are critical, awareness and behaviour across society are equally vital to building a resilient digital economy.

‘It is not just a policy issue, it is not just an institutional issue, but a whole-of-society issue,’ she said. ‘Events like this can raise awareness and help us find solutions so that the promise of digital can be delivered to the whole society without the crushing risks and breaches of trust that come from these threats.’

Kawawaki said the ADB’s SKOP is a flagship initiative supporting Sri Lanka’s evolving development priorities and advancing secure, inclusive, and interoperable digital ecosystems across the Asia-Pacific region.

‘The Government has recently launched its cybersecurity strategy and is reinforcing its institutional foundations through the implementation of the Data Protection Act and the forthcoming Cyber Security Bill,’ she said.

‘As Sri Lanka accelerates its digital transformation, enabling whole-of-Government digitalisation and expanding services to citizens, the need for a secure and trusted digital economy has become more relevant than ever.’

She warned that cyber threats and data privacy risks are growing in scale and complexity, posing significant challenges to public trust, economic resilience, and national security.

‘Without trust, digital services cannot thrive. Without security, the benefits of digitalisation risk being undermined,’ she said. ‘That is why cybersecurity and data protection must be embedded by design and by default into all of the country’s digital initiatives.’

Kawawaki said the ADB is working with the Government to strengthen the country’s cybersecurity and data protection governance frameworks and build institutional capacity to respond effectively to emerging threats.

Chief Adviser to the President on Digital Economy and Information Communication Technology Agency of Sri Lanka (ICTA) Chairman Dr. Hans Wijayasuriya told the forum that Sri Lanka will anchor its digital economy strategy on cybersecurity and data protection, viewing them not as regulatory necessities but as the foundation for innovation, competitiveness, and economic resilience.

Dr. Wijayasuriya said secure data systems and privacy frameworks will define Sri Lanka’s ability to build trust and attract investment in the digital era.

‘A good data protection and cybersecurity framework provides the platform for innovation and competitive advantage. Few countries can now compete on cost; agility and trust are the new calling cards,’ he said.

He explained that cybersecurity and privacy measures form the ‘security by design’ foundation for the Government’s plan to grow the digital economy fivefold to $ 15 billion by 2029 and triple digital exports to more than $ 5 billion.

‘We designed the Digital Economy Blueprint for Sri Lanka to be Artificial Intelligence (AI)-first and anchored on trust. Cybersecurity, privacy, and ethical AI are not optional-they are the bedrock of growth,’ he added.

Dr. Wijayasuriya noted that Sri Lanka has already made significant progress with the enactment of the Personal Data Protection Act (PDPA), the establishment of the Data Protection Authority, and the development of the National Cyber Security Centre (NSSERT). These, he said, place Sri Lanka in the upper quartile globally in terms of cyber resilience.

He urged policymakers and businesses to treat trust and data governance as strategic differentiators.

‘In today’s digital economy, our unique competitive advantage must be trust, delivered through world-class cybersecurity, privacy technologies, and governance,’ he said, adding, ‘Sri Lanka should aim to be known as the Serendip of trust, governance, and safety in the digital world.’

Industry leaders and Government officials yesterday emphasised the urgent need to build a security-first and privacy-respecting culture across Sri Lanka’s digital ecosystem, highlighting enforcement challenges, data protection gaps, and the importance of public-private partnerships at the SKOP on Digital Transformation: Cybersecurity and Data Protection for Digital Economy Development hosted by the ADB in Colombo.

During the first panel discussion, moderated by ADB Digital Technology Specialist – Cybersecurity and Data Privacy Masatake Yamamichi, participants examined the role of cybersecurity and data protection in developing Sri Lanka’s digital economy, enforcement challenges, and international cooperation. Speakers included Japanese Internal Affairs and Communications Ministry Office of the Director-General for Cybersecurity Director Yuki Naruse, Sri Lanka Computer Emergency Readiness Team (SLCERT) Chairman Thilak Pathirage, Commercial Bank of Ceylon PLC Chief Information Security Officer Sunari Dandeniya, Sysco LABS Security Architect Lasantha Priyankara, and Scybers Head of Threat Intelligence Chamath Rathnasekara.

The panellists discussed the need for greater capacity building and consistent enforcement of cybersecurity policies, while stressing that rapid digitalisation across sectors has made resilience and data protection essential to economic stability. The discussion also covered emerging cyber threats, the balance between privacy and innovation, and strengthening institutional frameworks through international collaboration.

A second panel, moderated by ADB Digital Sector Director Antonio Zaballos, focused on cultivating a ‘security-first and privacy-by-design’ mindset from schools to workplaces, including within Government institutions. Speakers included LIRNEasia Founder and Sarvodaya Chairman Prof. Rohan Samarajiva, Data Protection Authority Chairman Rajeeva Bandaranaike, and Visa Sri Lanka and Maldives Country Manager Avanthi Colombage.

The discussion underscored the importance of building trust in digital services, enhancing regulatory enforcement, and improving digital literacy across both public and private sectors. Bandaranaike highlighted that regulation must evolve alongside awareness, while Prof. Samarajiva called for consistent public policy frameworks to prevent data misuse. Colombage noted that private-sector collaboration can help improve public confidence in digital transactions and strengthen cybersecurity infrastructure.

The Government has rolled out a series of measures to improve facilities and streamline services for visitors ahead of the upcoming tourist season, with plans to ease visa processing, expand airport capacity, and digitise ticketing at major attractions.

A Special Task Force appointed by President Anura Kumara Dissanayake to expedite tourism promotion met for the second time at the Presidential Secretariat on Tuesday (14). The meeting focused on facilitating visa issuance, streamlining the Electronic Travel Authorisation (ETA) process, and increasing airport counters to reduce congestion during peak arrivals.

Discussions also covered expanding online ticket purchasing options at sites requiring visitor entry tickets and addressing operational bottlenecks faced by tourists and industry stakeholders.

The meeting was chaired by Foreign Affairs, Foreign Employment and Tourism Minister Vijitha Herath and attended by Deputy Tourism Minister Ruwan Ranasinghe. Industry participants included John Keells Holdings Chairman Krishan Balendra, EKHO Hotels and Resorts Vice President Nihal Muhandiram, and other private-sector representatives, the President’s Media Division said.

Citrus Leisure PLC has announced the reopening of The Steuart by Citrus, following an extensive refurbishment that breathes new life into one of Colombo’s most iconic heritage properties. Reimagined for the modern traveller, the hotel reopens its doors with a refreshed spirit, upgraded spaces, and exciting experiences, all while preserving the charm and history that have long defined it.

Housed in the landmark Steuart House, the building served as the city headquarters of George Steuart and Co., Sri Lanka’s oldest business house and one of the oldest in the world. Founded in 1835 by British sea captain James Steuart and his brothers George and Joseph, the company stands as a pillar of Sri Lanka’s mercantile history, and the legacy continues today.

The Steuart by Citrus is more than a hotel; it is a living tribute to Colombo’s colonial and commercial heritage. Located in the heart of the capital’s bustling business district, it offers 44 fully refurbished rooms that combine traditional Scottish charm with warm Sri Lankan hospitality, creating a boutique experience ideal for business and leisure guests alike.

A standout feature of the hotel is the charming old boardroom of George Steuart and Co., carefully preserved within the property. This historic space has been modernised for contemporary use while honouring its storied past, offering a rare and meaningful venue for meetings and intimate corporate events.

As part of the reopening, the much-loved and Co Pub and Kitchen also returns with a refreshed look and menu. The and Co Pub and Kitchen is an integral part of the hotel experience, offering great food, drinks, and a welcoming atmosphere for all.

Citrus Leisure PLC Vintage Pub Director and CEO Chandana Thalwatte said: ‘The Steuart by Citrus has always been a special part of our portfolio and of Colombo’s hospitality landscape. We’re honoured to reopen its doors and invite guests to experience a space that reflects both the rich history of George Steuart and Co. and the vibrant, contemporary spirit of Citrus.’

Minister K.D. Lalkantha yesterday said the Government will hold Provincial Council (PC) elections next year, either under the existing system or after introducing a new electoral framework.

He told reporters that the elections could proceed under the previous system by amending the Bill already passed in Parliament. ‘We have a two-thirds majority and can pass the necessary legislation to hold the PC elections under the old system,’ he said.

Responding to questions on whether the Opposition alliance would pose a challenge, the Minister dismissed the idea.

‘The Opposition will not be an issue. We have a functioning Executive Presidency and 159 MPs working effectively. A new political culture has been established, and the people have confidence in the National People’s Power (NPP) Government and the local bodies it administers,’ he said.

The Asian Development Bank (ADB) yesterday urged Sri Lanka to treat cybersecurity and data protection as central pillars of its digital transformation agenda, warning that national competitiveness and public trust in digital services will depend on how well the country safeguards its information infrastructure.

ADB Sectors Department 2 Director General Cleo Kawawaki said cybersecurity is not only a policy or institutional concern but a shared responsibility that must extend across government, business, and individuals.

‘This morning, I woke up with a phishing email telling me that my app had been accessed from somewhere else and that I should press a button to fix it,’ she said at the ADB Serendipity Knowledge Program (SKOP) on Digital Transformation: Cybersecurity and Data Protection for Digital Economy Development yesterday in Colombo, in partnership with the Department of National Planning of the Finance Ministry.

‘We all know what that means. It means that if I press that, it steals all my details. Cybersecurity threatens every single one of us. All of the promises of the digital economy can be undone by one person not watching out and pressing that button,’ she added.

She said that while technology and policy are critical, awareness and behaviour across society are equally vital to building a resilient digital economy.

‘It is not just a policy issue, it is not just an institutional issue, but a whole-of-society issue,’ she said. ‘Events like this can raise awareness and help us find solutions so that the promise of digital can be delivered to the whole society without the crushing risks and breaches of trust that come from these threats.’

Kawawaki said the ADB’s SKOP is a flagship initiative supporting Sri Lanka’s evolving development priorities and advancing secure, inclusive, and interoperable digital ecosystems across the Asia-Pacific region.

‘The Government has recently launched its cybersecurity strategy and is reinforcing its institutional foundations through the implementation of the Data Protection Act and the forthcoming Cyber Security Bill,’ she said.

‘As Sri Lanka accelerates its digital transformation, enabling whole-of-Government digitalisation and expanding services to citizens, the need for a secure and trusted digital economy has become more relevant than ever.’

She warned that cyber threats and data privacy risks are growing in scale and complexity, posing significant challenges to public trust, economic resilience, and national security.

‘Without trust, digital services cannot thrive. Without security, the benefits of digitalisation risk being undermined,’ she said. ‘That is why cybersecurity and data protection must be embedded by design and by default into all of the country’s digital initiatives.’

Kawawaki said the ADB is working with the Government to strengthen the country’s cybersecurity and data protection governance frameworks and build institutional capacity to respond effectively to emerging threats.

Chief Adviser to the President on Digital Economy and Information Communication Technology Agency of Sri Lanka (ICTA) Chairman Dr. Hans Wijayasuriya told the forum that Sri Lanka will anchor its digital economy strategy on cybersecurity and data protection, viewing them not as regulatory necessities but as the foundation for innovation, competitiveness, and economic resilience.

Dr. Wijayasuriya said secure data systems and privacy frameworks will define Sri Lanka’s ability to build trust and attract investment in the digital era.

‘A good data protection and cybersecurity framework provides the platform for innovation and competitive advantage. Few countries can now compete on cost; agility and trust are the new calling cards,’ he said.

He explained that cybersecurity and privacy measures form the ‘security by design’ foundation for the Government’s plan to grow the digital economy fivefold to $ 15 billion by 2029 and triple digital exports to more than $ 5 billion.

‘We designed the Digital Economy Blueprint for Sri Lanka to be Artificial Intelligence (AI)-first and anchored on trust. Cybersecurity, privacy, and ethical AI are not optional-they are the bedrock of growth,’ he added.

Dr. Wijayasuriya noted that Sri Lanka has already made significant progress with the enactment of the Personal Data Protection Act (PDPA), the establishment of the Data Protection Authority, and the development of the National Cyber Security Centre (NSSERT). These, he said, place Sri Lanka in the upper quartile globally in terms of cyber resilience.

He urged policymakers and businesses to treat trust and data governance as strategic differentiators.

‘In today’s digital economy, our unique competitive advantage must be trust, delivered through world-class cybersecurity, privacy technologies, and governance,’ he said, adding, ‘Sri Lanka should aim to be known as the Serendip of trust, governance, and safety in the digital world.’

Industry leaders and Government officials yesterday emphasised the urgent need to build a security-first and privacy-respecting culture across Sri Lanka’s digital ecosystem, highlighting enforcement challenges, data protection gaps, and the importance of public-private partnerships at the SKOP on Digital Transformation: Cybersecurity and Data Protection for Digital Economy Development hosted by the ADB in Colombo.

During the first panel discussion, moderated by ADB Digital Technology Specialist – Cybersecurity and Data Privacy Masatake Yamamichi, participants examined the role of cybersecurity and data protection in developing Sri Lanka’s digital economy, enforcement challenges, and international cooperation. Speakers included Japanese Internal Affairs and Communications Ministry Office of the Director-General for Cybersecurity Director Yuki Naruse, Sri Lanka Computer Emergency Readiness Team (SLCERT) Chairman Thilak Pathirage, Commercial Bank of Ceylon PLC Chief Information Security Officer Sunari Dandeniya, Sysco LABS Security Architect Lasantha Priyankara, and Scybers Head of Threat Intelligence Chamath Rathnasekara.

The panellists discussed the need for greater capacity building and consistent enforcement of cybersecurity policies, while stressing that rapid digitalisation across sectors has made resilience and data protection essential to economic stability. The discussion also covered emerging cyber threats, the balance between privacy and innovation, and strengthening institutional frameworks through international collaboration.

A second panel, moderated by ADB Digital Sector Director Antonio Zaballos, focused on cultivating a ‘security-first and privacy-by-design’ mindset from schools to workplaces, including within Government institutions. Speakers included LIRNEasia Founder and Sarvodaya Chairman Prof. Rohan Samarajiva, Data Protection Authority Chairman Rajeeva Bandaranaike, and Visa Sri Lanka and Maldives Country Manager Avanthi Colombage.

The discussion underscored the importance of building trust in digital services, enhancing regulatory enforcement, and improving digital literacy across both public and private sectors. Bandaranaike highlighted that regulation must evolve alongside awareness, while Prof. Samarajiva called for consistent public policy frameworks to prevent data misuse. Colombage noted that private-sector collaboration can help improve public confidence in digital transactions and strengthen cybersecurity infrastructure.

The country’s manufacturing and services sectors in September have expanded, as per the Purchasing Managers’ Index (PMI), its compiler the Central Bank of Sri Lanka (CBSL) said.

The Manufacturing PMI registered an index value of 55.4 in September, indicating an expansion in manufacturing activities at a faster rate compared to 55.2 in August 2025.

The CBSL said this expansion has remained above the neutral threshold during the month from all sub-indices.

The growth in New Orders and Production were largely attributed to the manufacture of the textiles and wearing apparel sector.

Stock of Purchases also increased during the month, driven by the planned accumulation of inventory in preparation for upcoming production targeting the festive season.

The Employment sub-index turned below the neutral threshold in September, with many firms highlighting difficulties in retaining and attracting skilled workers.

However, Suppliers’ Delivery Time further lengthened during the month, as many respondents cited persistent delays in international shipping operations.

The CBSL said the outlook for manufacturing activities over the next three months remains positive, reflecting the expectations of strong year-end seasonal demand.

The Services PMI registered an index value of 58.7 in September, showing accelerated expansion in services activity following a similar trend observed in the same period last year, albeit at a slower rate compared to 68.9 in August 2025.

Business activities continued to expand in September 2025, supported by improvements observed across multiple sectors.

The expansion was driven by strong performance in wholesale and retail trade. In addition, business activities related to financial services also continued to improve, underpinned by increased lending activity.

New businesses increased in September 2025, mainly reflecting the expansions observed in wholesale and retail trade, and financial services-related activities.

The CBSL said employment continued to increase in September 2025, as several companies recruited additional staff to meet ongoing operational requirements.

However, Backlogs of Work declined slightly compared to the previous month.

Expectations for business activities over the next three months continue to improve, supported by favourable macroeconomic conditions, increased tourist arrivals, and the anticipated boost from the upcoming festive season.

For decades, financial analysts have relied on a core set of tools and models to assess risk, predict market trends, and guide investment strategies. While these traditional methods have provided a valuable foundation, they often fall short in today’s increasingly complex and data-rich environment. The limitations of these traditional approaches are becoming ever more apparent.

The limits of traditional financial analysis

Traditional financial analysis often oversimplifies complex financial realities. Models struggle to capture the nuances and interdependencies within a company’s data. Moreover, they often struggle to process the sheer volume of data available today, potentially overlooking critical signals and patterns. And, as some have pointed out, financial statements can sometimes be deliberately obfuscated (Piazza et al., 2022), making accurate analysis even more challenging. The primary focus of these traditional models has been on prediction – forecasting future performance based on historical data – without providing much insight into why those predictions are made.

The promise of AI

The rise of artificial intelligence offers a powerful new set of tools for financial analysis. AI algorithms, particularly those based on deep learning, can sift through massive datasets to identify patterns and anomalies that would be impossible for human analysts to detect (Mienye et al., 2024). AI has the potential to revolutionise financial analysis, enabling more accurate predictions, more efficient risk management, and more informed investment decisions.

The problem with ‘black box’ predictions

However, the increasing reliance on AI in finance also raises some important concerns. Many AI models, particularly the most sophisticated ones, operate as ‘black boxes.’ While they may be able to generate highly accurate predictions, it can be difficult or even impossible to understand how they arrived at those conclusions (Yeo et al., 2025). This lack of transparency poses several risks. ‘Black box’ models can be susceptible to hidden biases, leading to unfair or discriminatory outcomes (Nasir and Rinaudo, 2025). Without understanding the reasoning behind a model’s predictions, it can be difficult to identify and correct these biases. Furthermore, a lack of transparency can erode trust in AI-driven financial systems. If stakeholders don’t understand how decisions are being made, they may be reluctant to accept them.

Explainable AI: A new paradigm

Explainable AI is emerging as a critical solution to the limitations of black-box models (Nasir and Rinaudo, 2025). XAI techniques aim to make AI models more transparent and understandable, allowing humans to comprehend the factors driving their predictions. By providing insights into the decision-making process, XAI can help build trust in AI systems, reduce bias, and ensure ethical and responsible use of the technology (Nasir and Rinaudo, 2025). Several different approaches to XAI are being developed, including techniques such as SHAP and LIME (Mienye et al., 2024). These methods provide insights into the importance of different features in driving a model’s predictions, helping analysts understand which factors are most influential.

Applications and the future of XAI in finance

The potential applications of XAI in finance are vast. From risk assessment and fraud detection to investment strategies and customer service, XAI can help make financial systems more transparent, accountable, and reliable. As AI continues to transform the financial landscape, XAI will play an increasingly important role in ensuring that these powerful technologies are used responsibly and ethically. Ongoing efforts are focused on making even the most complex black-box methods more interpretable (Yeo et al., 2025), paving the way for a future where AI-driven financial decisions are both accurate and understandable.

However, despite the advancements in AI and XAI, we must not overlook the irreplaceable role of human intuition in the decision-making process. While these technologies provide valuable insights, they cannot fully capture the complex dynamics of human behaviour, organisational culture, and unforeseen external factors. Human expertise, shaped by experience and nuanced understanding, remains essential for interpreting AI outputs within a broader context. Factors such as employee morale, team dynamics, subtle shifts in market sentiment and socio-political conditions are often difficult to quantify and model effectively.

Ultimately, it is human judgment that must weigh these intangible elements alongside the data-driven insights provided by AI. The most effective approach to financial decision-making will likely involve a synergistic partnership between AI and human expertise, leveraging the strengths of both to achieve superior outcomes. The rise of Explainable AI represents a fundamental shift in the way we approach financial analysis, moving beyond prediction to a new era of transparency and insight, augmented by the indispensable wisdom of human intuition.

References:

Mienye, E., Jere, N., Obaido, G., Mienye, I. D., and Aruleba, K. (2024). Deep Learning in Finance: A Survey of Applications and Techniques. AI, 5(4), 2066. https://doi.org/10.3390/ai5040101

Nasir, W., and Rinaudo, O. (2025). Future Directions in AI for the Financial Sector: Overcoming Bias and Enhancing Decision-Making with Explainable Models.

Piazza, M., Passacantando, M., Magli, F., Doni, F., Amaduzzi, A., and Messina, E. (2022). Explainable Artificial Intelligence for identifying profitability predictors in Financial Statements.

Yeo, W. J., Van Der Heever, W., Mao, R., Cambria, E., Satapathy, R., and Mengaldo, G. (2025). s10462-024-11077-7.pdf.

(Rozan Jameel holds an MBA (PIM-USJ), FCA, ACMA, BSc (Physical Science); has over 25 years of experience in the sectors of construction and engineering, retail supermarket chain, hospitality industry, import export field, automobile and education, and held positions such as Director Finance, CEO and Group CFO.)

(Dr. Susil Kumara Silva holds a PhD (Mgt. USJP), is a Sr. Lecturer, Researcher, Management Consultant; Accredited Director (SL), Chartered Member CIPM, MSLIM, CIM (UK), 26 years of managerial experience in construction and engineering, trading, apparel, manufacturing and education sectors, and held positions such as CEO, Sr. Executive Vice President and Group Head of HR and Administration in large organisations.)