The Banking Executive Issue - October 2025 Issue

the BANKING EXECUTIVE 90 ISSUE 202 OCTOBER 2025 FinTech and AI Chornicle The Dubai Financial Services Au- thority (DFSA), the independent reg- ulator of the Dubai International Financial Centre (DIFC), released the results of its artificial intelligence (AI) survey 2025, revealing a rapid accel- eration in AI adoption among finan- cial firms in the Centre, with 52% of firms actively using AI – up from 33% in 2024 – with growth particu- larly pronounced in the adoption of Generative AI (+166%). The survey, conducted in June 2025, captured data from 661 Authorised Firms (88% participation rate) oper- ating across Banking, Capital Mar- kets, Wealth & Asset Management, and Fintech – providing an insight into how AI is being adopted and governed within the financial serv- ices sector in the DIFC. The findings reflect a significant shift in the market, with most firms now integrating AI in at least one area of their operations – and a clear major- ity planning further AI deployment, with expected continued adoption over the next 12 months. The DFSA emphasised that, while the pace of innovation is welcome, it must be underpinned by effective governance and oversight, ethical use of data, and sound risk manage- ment practices. The regulator contin- ues to engage closely with the industry to develop guidance and frameworks for responsible AI adop- tion. Justin Baldacchino, Managing Direc- tor, Supervision, of the DFSA, said, "The DIFC’s financial services ecosystem is embracing AI at pace. While AI adoption remains at a nas- cent stage for many firms, there is growing recognition of its strategic potential to enhance organisation- wide performance, from operational efficiency and regulatory compliance to customer engagement and sales. Our priority at the DFSA is to bal- ance innovation with integrity – en- suring that when firms harness AI’s potential, they do so within frame- works that protect customers, man- age risk, and uphold market confidence. It is therefore important that governance frameworks evolve in parallel, with clear accountability and oversight at every stage of adop- tion.” The survey results also underscore a cautious and controlled approach to deployment. Many firms continue to focus their use of AI on internal functions and processes, rather than external or customer-facing applica- tions. This caution is reflected in the divergence of AI applications in use, as well as the need to build experi- ence and develop appropriate gover- nance frameworks. The DFSA will continue to follow a risk-based approach to regulation, ensuring that its oversight remains proportionate and responsive to emerging risks without imposing un- necessary burdens on firms. In the months ahead, the Authority will continue to engage actively with firms and other financial regulators in the UAE and globally to chart a path forward that reinforces our commit- ment to balance the enabling of re- sponsible innovation with safeguarding financial stability and investor protection. GENERATIVE AI ADOPTION NEARLY TRIPLED WITHIN DIFC IN LAST 12 MONTHS