AB Majlis podcast: Hassan Ali talks about transforming internal audit and embracing AI at Mashreq

Internal audit is undergoing one of the most significant transformations in its history and within the banking sector, that shift is happening at remarkable speed. Speaking on the AB Majlis podcast, Hassan Ali, Group Chief of Internal Audit at Mashreq, explained how the function is evolving from a traditional compliance checkpoint into a proactive, technology-led strategic partner.

Hassan began by putting the transformation into perspective. “Evolution is the nature of everything in life, right, and audit is no exception,” says Hassan. Over the years, he explained, internal audit has moved away from checklist-style inspections and into “intelligent risk-focused auditing”, a shift that has enabled, empowered, and given internal audit the freedom to contribute to the decision making process of the organisation.

This evolution has not happened evenly across industries, he noted. “Across industries… the progression… is not equal,” notes Hassan. But banks are far ahead, driven by the demands of regulators. “The banking industry is probably leading in terms of this transformation because… regulators… push forward and stress and… guide the organisation to drive better controls.”

Transforming audit at Mashreq

When Hassan joined Mashreq just over two years ago, he found a function already held in high regard. “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.” 

His goal, therefore, was not to fix internal audit, but to elevate it further and align it with Mashreq’s sweeping digital transformation. “Once the risk profile of the bank changes, internal audit should actively actually 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.”

This alignment, he added, has been achieved through partnership. “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 organisation and to help the organisation grow further.”

AI will redefine internal audit

The conversation turned to artificial intelligence and whether AI could eventually replace internal audit. Ali’s view is uncompromising: the function must embrace AI or risk irrelevance.

“The methodologies and the procedures that are currently being implemented by internal audit are going to become obsolete very soon. Mainly because of AI.”

Rather than resisting, he believes internal auditors should lead the shift. “It should be the priority of any leader… to push forward in terms of adopting AI because the technology is already here.”

Mashreq has already equipped every internal auditor with secure, 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.”

The bank’s next step is more ambitious: building an in-house AI audit engine. “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,” emphasises Hassan.

This is essential, Hassan argued, because traditional periodic audits are no longer fit for purpose. “Reviewing risks every two or three years doesn’t provide the same value anymore, because the pace of change today is far quicker.”

Responsible AI requires strong governance

With powerful technology comes the need for oversight. Hassan stressed that internal audit plays a crucial role in ensuring 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.”

Mashreq has also launched an AI academy to upskill all employees. “Every employee in the bank is actually trained and upskilled and is able to use and utilise these models and AI tools responsibly.”

What will define the best audit functions

Looking ahead, Hassan believes the most successful 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.”

Technology will be central to this. “The future of audit lies in foresight… using data, technology, and judgment to anticipate risk and opportunities… and shape decisions at the leadership table.”

But culture matters just as much. “Great audit functions will also be deeply connected to the culture of the organisation… helping the organisation live its values through every action.”

Ultimately, he said, what will set audit apart is “its ability to drive confidence, enable progress, and contribute to long-term resilient value creation.”

Hassan concluded by tying his vision to his own leadership style. “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 organisation.”