I had a battle recently where there were over 12 allies along with my 8 units. Almost all of the units (mine and allied) had the same or visually very similar armor, helmet and weapons. It was very difficult to tell which units were controlled by me and which were controlled by the AI but allied to me. The only visual distinction I could tell were the arm bands however they are rather small and when the unit took damage it blended in too much with the units armor. In addition the morale banner (or whatever it is) was displayed in roughly the same location and thus hid (was over top of) the arm band.
As a suggestion can you change the color of the base of the figure? Something like green for units I control, blue for allied AI units and red for enemy units.
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