Insights on AI Adoption in the DIFC Financial Services Sector: Survey Findings and Regulatory Perspectives (June 2025)

The Future of AI in the Financial Services Sector: Insights from the DIFC Survey

In June 2025, a comprehensive survey conducted on 661 Authorised Firms within the Dubai International Financial Centre (DIFC) revealed significant insights into the adoption and governance of Artificial Intelligence (AI) in the financial services sector. With an impressive participation rate of 88%, the findings highlight a transformative shift in how AI is embraced across various segments, including Banking, Capital Markets, Wealth & Asset Management, and Fintech.

A Paradigm Shift: AI Adoption in Financial Services

The survey’s results indicate that a majority of firms are now integrating AI in at least one operational area, showcasing a marked increase in recognition of AI’s potential. As organizations plan further deployment over the next year, it’s evident that the financial landscape is evolving. The integration of AI promises to enhance operational efficiency, regulatory compliance, customer engagement, and sales processes.

Justin Baldacchino, Managing Director of Supervision at the Dubai Financial Services Authority (DFSA), noted the rapid pace at which the DIFC’s financial ecosystem is adopting AI. “While AI adoption remains at a nascent stage for many firms, there is growing recognition of its strategic potential," Baldacchino stated, emphasizing the importance of leveraging AI responsibly to enhance overall organizational performance.

The Need for Effective Governance

While the enthusiasm for AI innovation is palpable, the DFSA stresses that such advancements must be supported by robust governance and oversight. Effective risk management, ethical data usage, and transparent accountability structures are critical to ensuring that AI deployment does not compromise customer protection or market integrity.

“The priority at the DFSA is to balance innovation with integrity,” Baldacchino explained. As firms continue to harness AI’s capabilities, it is essential that governance frameworks evolve correspondingly. This evolution will help maintain customer trust and manage potential risks associated with AI applications.

Cautious Approach to AI Deployment

Interestingly, the survey reveals a controlled approach among financial institutions in the deployment of AI technologies. Many firms have primarily focused their AI initiatives on internal functions and processes rather than external customer-facing applications. This cautious stance reflects a broader industry sentiment, acknowledging the importance of building experience and establishing appropriate governance frameworks before fully venturing into AI-driven customer applications.

Regulatory Framework and Future Engagement

The DFSA’s commitment to a risk-based regulatory approach is pivotal in fostering an environment conducive to innovation while ensuring regulations remain proportionate and adaptive to emerging risks. By actively engaging with firms and other financial regulators—both locally and globally—the DFSA aims to create a clear path forward, balancing responsible innovation with the safeguarding of financial stability and investor protection.

In the coming months, the Authority will continue to facilitate dialogues with industry players to refine guidance and establish frameworks that promote responsible AI adoption, reinforcing the essential harmony between innovation and oversight.

Conclusion

As AI technology continues to advance, the financial services sector in the DIFC is poised for significant transformation. While the enthusiasm for AI is notable, the focus on responsible governance and oversight—championed by the DFSA—is critical. As firms navigate this complex landscape, the careful balance of innovation and integrity will ultimately define the future of AI in financial services, ensuring that advancements are made without compromising market confidence or customer protection.

As we look to the future, it will be exciting to observe how these developments unfold and how other global markets respond to similar challenges and opportunities. With regions like China reporting a doubling of generative AI usage to 515 million, the international dialogue on AI’s role in financial services is just beginning, promising an era filled with both innovation and responsibility.