The ever-increasing size and complexity of debts in the financial institutions of the Gulf Cooperation Council (GCC) have emphasized the need to make the process of debt recovery and management more efficient and data-driven. The traditional methods of debt recovery in the GCC region have been less efficient, with the process being highly manual, reactive, and based on static credit decisions. The study aims to highlight the impact of artificial intelligence (AI) and automation in the field of debt recovery and management in the financial institutions of the GCC region. The study has been based on the banking and financial services environment of the GCC region and has discussed the impact of AI and automation in the field of debt recovery and management. The study has concluded that the AI-based receivables management system has the potential to significantly improve the debtor segmentation, payment prediction, and recovery timing, which is very important for the sustainability of the financial institutions in the GCC region. The study has also discussed the governance, data, and ethical issues associated with the AI-based decision-making process in the field of debt recovery and management. The study has been based on the relationship between the technological environment and the sustainability of the financial institutions, which makes it very important for the field of digital finance and emerging markets. The study has concluded that the AI-based receivables management system is a critical enabler for the sustainability of the credit risk management and digital transformation of the financial institutions in the GCC region.