The Dubai Financial Services Authority (DFSA) has co-lead a report along with the UK’s Financial Conduct Authority (FCA).

The report, on behalf of the Global Financial Innovation Network (GFIN), provides key insights on the use of consumer-facing AI in global financial services. It outlines topics such as the transformative role of AI and machine learning (ML), with a focus on their application within risk management, customer service, fraud detection, and investment strategies.

DFSA is a founding member of the GFIN, a global network of more than 90 regulators and organisations committed to supporting financial innovation.

Working alongside the FCA to facilitate international roundtables and to host discussions on AI’s adoption in consumer-facing financial services, the two entities brought together more than 40 other regulators, industry stakeholders, and financial innovators across multiple jurisdictions.

Ian Johnston, Chief Executive of the DFSA, said: “As the regulator of the Dubai International Financial Centre (DIFC), we wish to ensure that innovation in AI is harnessed responsibly, balancing progress with appropriate safeguards. We remain committed to supporting responsible AI development, adoption, and governance that fosters trust, transparency, and ethical standards – ensuring that AI contributes positively to financial services markets.

“We are proud to present this pioneering GFIN report. Together, we have uncovered critical insights into the consumer-facing applications of AI that enable faster decision-making, increased efficiency, and offer more personalised customer experiences. However, with these opportunities come challenges, particularly in the areas of data privacy, risk management, regulatory compliance, and ethical considerations. We will continue to work with governments and international bodies to ensure that AI’s integration into the market is beneficial, secure, and sustainable.”

Among some of the key insights in the report are:

  1. Consumers are increasingly seeking clarity on how robo-advisors make decisions, with a growing demand for transparent decision-making processes in automated financial advice.
  2. AI’s role in expanding financial inclusion is clear, assisting the unbanked and underbanked to access the financial tools needed to build better, more resilient futures.
  3. Although AI-powered open finance models drive innovation, they also present governance, accountability, and cybersecurity challenges, therefore highlighting the importance of balancing risk and opportunity.
  4. Global collaboration is essential for harnessing AI’s full potential whilst protecting consumers, firms, and markets across borders.

AI is unlocking new possibilities in financial services, from enhancing accessibility to creating personalised solutions for consumers

AI is poised to significantly impact how individuals, households, and organisations interact with their daily finances, including how they earn, spend, save, invest, and plan for the future and the GFIN AI report is designed to facilitate knowledge sharing and insights rather than serve as regulatory guidance.

“AI is unlocking new possibilities in financial services, from enhancing accessibility to creating personalised solutions for consumers. As a regulator within the GFIN, the DFSA is committed to fostering innovation in financial services while ensuring that integrity, transparency, and agility remain at the forefront,” added Johnston.

“This report captures a global perspective on how AI can transform financial systems for the better, but also highlights the importance of a robust regulatory framework to address emerging risks.”

The project paves the way for continued global collaboration, including exploring the feasibility of a global AI sandbox and enhanced information-sharing frameworks among regulators.

Source: https://www.arabianbusiness.com/industries/banking-finance/dfsa-co-leads-report-on-ais-impact-in-financial-services