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The report (pdf, 2.9mb/16 pages) by the Dubai Financial Services Authority (DFSA) found that generative AI usage among financial institutions had surged by 166% over the past year. Overall, AI adoption in the DIFC rose from 33% of firms in 2024 to 52% in 2025, with significant growth seen in ‘narrow’ AI systems for specific tasks, deep learning and machine learning models.

Despite this rapid uptake, the survey highlighted persistent governance gaps. The DFSA found that 21% of the 661 companies surveyed for the report have yet to introduce clear accountability mechanisms for governing their usage of AI. Similarly, the report warned that 26% of companies that use AI applications in a critical area of their business have no governance framework, with a further 11% lacking it around considerable or important areas of the business.

“The uptake in AI has been rapid, but this comes against a backdrop of evolving regulatory expectations,” said Marie Chowdhry, a fintech expert with Pinsent Masons in Dubai.

“Companies operating in the DIFC must immediately assess whether their governance frameworks adequately address the risks and responsibilities associated with their current level of AI deployments. This assessment should cover compliance with existing regulatory expectations at a minimum, but the strongest and most robust firms will also be looking to the future as this is a fast evolving area where we anticipate evolving standards, ethical considerations, and operational resilience obligations becoming more important, as AI becomes more deeply embedded in business models. Boards and senior management need to ensure that oversight mechanisms, accountability structures, and risk controls are robust enough to support both present use cases and future innovation,” she said.

A need for clearer regulation of AI usage was identified as one of the main barriers to AI adoption, according to the report, with more than 38% of companies citing regulatory uncertainty as their biggest hurdle. The DFSA also found the majority of firms surveyed are still seeking clarification on how existing regulations apply to AI usage.

Nevertheless, 60% of the surveyed companies plan to increase their usage of AI systems in the next year, with three-quarters of all companies aiming to increase their AI involvement in the next three years.