Generative AI adoption in DIFC nearly triples in a year as financial firms embrace innovation

The Dubai International Financial Centre (DIFC) is witnessing a seismic shift in its approach to artificial intelligence, with Generative AI (GenAI) emerging as the fastest-growing technology across its financial ecosystem, a report showed on Wednesday. 

According to the Dubai Financial Services Authority’s (DFSA) latest Artificial Intelligence Survey, adoption of GenAI has skyrocketed by 166 per cent over the past 12 months, marking the most dramatic increase among all AI categories.

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The survey, which polled 661 authorised firms — an 88 per cent response rate — reveals that overall AI adoption in DIFC surged from 33 per cent in 2024 to 52 per cent in 2025. This means 345 firms are now actively deploying AI, compared to just 177 a year earlier. While machine learning and deep learning also saw significant gains, it is GenAI that has captured the imagination of the sector, becoming a catalyst for broader AI integration.

From experimentation to embedded use

The findings point to a clear evolution in how firms are using AI. What began as cautious experimentation is now moving toward operational integration. The number of firms deploying AI across a considerable share of their business has tripled — from 41 in 2024 to 121 in 2025 — while those identifying AI as critical to at least one business area nearly doubled, rising from 17 to 29.

Despite this momentum, most applications remain focused on internal operations such as HR, legal, finance, and compliance. External-facing uses, like customer engagement and sales, account for just 21 per cent of deployments. This “internal-first” strategy reflects a deliberate approach to managing risk while building governance frameworks before extending AI into client-facing areas.

Why GenAI is leading the charge

Generative AI’s appeal lies in its versatility. From automating document drafting to generating insights from complex datasets, GenAI tools are helping firms enhance efficiency, reduce costs, and improve performance. These benefits align with the survey’s top drivers for adoption: operational efficiency, better data analysis, and improved risk management.

Yet, challenges persist. Regulatory uncertainty, cybersecurity risks, and high implementation costs remain the leading barriers to AI deployment. Firms are calling for clearer guidance from regulators, with 526 respondents requesting clarification on how existing rules apply to AI and nearly 460 seeking practical, scenario-based guidance.

While 70 per cent of firms using AI have formal governance frameworks, gaps remain. One in five firms lacks clear accountability for AI oversight, even where applications are critical to operations. The DFSA warns that effective governance is not optional — it is essential for maintaining trust and resilience as adoption scales.

Board-level engagement also appears uneven. The number of firms citing a lack of understanding among directors more than doubled year-on-year, underscoring the need for education and strategic alignment at the top.

Justin Baldacchino, Managing Director, Supervision, of the DFSA, said: "The DIFC’s financial services ecosystem is embracing AI at pace. While AI adoption remains at a nascent 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. It is important that governance frameworks evolve in parallel, with clear accountability and oversight at every stage of adoption.”

Looking ahead

The outlook is bullish. Sixty per cent of firms expect to increase AI use over the next 12 months, rising to 75 per cent over a three-year horizon. As DIFC positions itself as a global hub for financial innovation, the rapid rise of GenAI signals a new era — one where technology is not just a tool for efficiency but a strategic driver of growth.

For regulators, the challenge will be to balance innovation with oversight. As the DFSA notes, sustainable adoption requires clear rules of engagement and robust governance frameworks. For firms, the message is equally clear: the future is AI-driven, and GenAI is leading the way.

Somshankar Bandyopadhyay

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somshankar@khaleejtimes.com

Somshankar Bandyopadhyay is a News Editor with close to three decades of experience. Currently, he manages the business section, ensuring that the top economic and business news of the day reaches its readers.