Hassan Ali on Revolutionizing Internal Audit with AI at Mashreq
Internal Audit Transformation in Banking
Internal audit is currently experiencing one of its most notable transformations, especially within the banking sector, where changes are occurring rapidly. Hassan Ali, the Group Chief of Internal Audit at Mashreq, discussed this evolution on the AB Majlis podcast, highlighting how the function is transitioning from a traditional compliance checkpoint to a proactive, technology-driven strategic partner.
In his remarks, Hassan underscored the inherent nature of evolution. “Evolution is the nature of everything in life, right, and audit is no exception,” he stated. Over the years, he explained, internal audit has shifted from simple checklist-style inspections to “intelligent risk-focused auditing.” This transformation empowers the internal audit function to actively participate in the organization’s decision-making processes.
Industry Comparisons and Regulatory Influence
Hassan noted that the evolution of internal audit has not been uniform across various industries. “Across industries… the progression… is not equal,” he remarked. In fact, the banking sector is making significant strides, primarily due to regulatory demands. “The banking industry is probably leading in terms of this transformation because… regulators… push forward and stress and… guide the organization to drive better controls,” he highlighted.
Enhancing Mashreq’s Internal Audit Function
Upon joining Mashreq over two years ago, Hassan found the internal audit function already well-regarded. “With Mashreq’s internal audit function already held in such high esteem for its impact and effectiveness, my mission was more difficult, as I was starting from an already elevated benchmark,” he said. His objective was not to repair the function but to enhance it further, aligning it with the bank’s extensive digital transformation initiatives.
Hassan emphasized the necessity of alignment with the bank’s risk profile, stating, “Once the risk profile of the bank changes, internal audit should actively align its priorities with the priorities of the bank… because the focus of internal audit has to come towards the risks that the bank is facing.”
To facilitate this alignment, a foundation of partnership and transparency was established. “Our approach was to create an environment of transparency and trust… and build a common understanding that internal audit is here to work with you to protect the organization and to help the organization grow further,” he noted.
The Role of AI in Internal Audit
As discussions turned to artificial intelligence, Hassan expressed a firm belief that AI is essential for the future of internal audit. He stated, “The methodologies and procedures that are currently being implemented by internal audit are going to become obsolete very soon. Mainly because of AI.” Rather than resisting this change, he argues that internal auditors should lead the adoption of AI technologies.
Mashreq has already taken significant steps in this direction by equipping each internal auditor with secure and responsible AI tools. “All of them use it on a daily basis, and… we have seen significant improvement in terms of the efficiency of our work and the impact of our work,” Hassan explained.
Looking ahead, the bank aims to build an in-house AI audit engine, which will analyze data from connected systems to conduct specific risk assessments. “By ingesting data from all connected systems and performing specific risk analyses, the engine will enable the audit process to operate in real time or as near to real time as possible,” Hassan emphasized.
This development addresses a critical issue: traditional periodic audits are becoming insufficient. “Reviewing risks every two or three years doesn’t provide the same value anymore, because the pace of change today is far quicker,” he explained.
Governance and Ethical Considerations in AI
With the increasing complexity of AI, the demand for oversight becomes paramount. Hassan emphasized the role of internal audit in ensuring that AI models are ethical and transparent. “We actually look at the full life cycle of AI… the transparency of the AI models, the explainability… how bias is being controlled… because the data quality… is quite important,” he said.
To prepare for this landscape, Mashreq has also established an AI academy to upskill all employees. “Every employee in the bank is actually trained and upskilled and is able to use and utilize these models and AI tools responsibly,” he noted.
Characteristics of Leading Audit Functions
Looking to the future, Hassan stated that the most effective audit teams will be those that combine insight and agility. “The audit functions that stand out will be those that combine insight, agility, and strategic influence… They will move beyond reporting on what went wrong to advise on what could go right,” he asserted.
Technology will play a pivotal role in this transformation. “The future of audit lies in foresight… using data, technology, and judgment to anticipate risk and opportunities… and shape decisions at the leadership table,” he explained.
Culture, he further noted, is equally significant. “Great audit functions will also be deeply connected to the culture of the organization… helping the organization live its values through every action.”
Ultimately, the distinguishing feature of an effective audit function will be its capacity to instill confidence, foster progress, and contribute to long-term resilience and value creation.
Hassan summarized his vision by outlining his leadership approach: “Strategic audit leadership… means driving a progressive culture of trust that transforms assurance into predictive foresight… to enable confident and value-driven decisions in the organization.”
Published on 1765235500 • Category: Podcast