Artificial intelligence in financial centres accelerates adoption but regulatory gaps persist, WAIFC and ADGM report
WAIFC and ADGM find artificial intelligence in financial centres driving adoption in compliance, fraud detection and investment, but regulatory gaps remain.
The World Alliance of International Financial Centers (WAIFC), in partnership with Abu Dhabi Global Market (ADGM), has published a report charting the rapid integration of artificial intelligence in financial centres worldwide. The report, based on a survey of 12 member jurisdictions, finds AI is now embedded across compliance, fraud detection, customer service and portfolio management. It warns, however, that governance frameworks have not kept pace with deployment, creating accountability and transparency challenges.
Survey scope and key findings
The WAIFC–ADGM study drew responses from 12 member-centre authorities and evaluated five core areas: financial services impact, regulatory considerations, skills development, ecosystem innovation and AI-related risks and opportunities. Respondents reported substantial uptake of AI tools across front-, middle- and back-office functions. The research highlights generative AI as a particularly influential force, accelerating tasks such as document review, transaction monitoring and client communications.
The report notes that while many jurisdictions apply existing data protection laws to AI applications, only a small number have enacted bespoke AI regulations. That gap is most pronounced around questions of automated decision-making, model explainability and responsibility for harms stemming from autonomous systems.
Generative AI changing compliance and surveillance
Financial centres surveyed pointed to generative AI as transformative for compliance workflows, enabling faster investigations, improved accuracy and reduced processing costs. Firms are increasingly using advanced language models to synthesise regulatory texts, screen suspicious activity and generate audit trails for supervisory review. Real-time monitoring powered by AI is also raising expectations for earlier detection of market abuse and fraud.
At the same time, the report emphasises weaknesses in model transparency and the risk of algorithmic bias, which can undermine fairness in customer outcomes. Regulators and firms reported concerns about over-reliance on third-party providers and the need for robust validation and documentation of model logic.
Regulatory frameworks and accountability shortfalls
Although data protection regimes exist in most surveyed jurisdictions, regulatory regimes tailored to AI remain limited. The report highlights inconsistencies in how centres approach accountability when AI systems make autonomous decisions that affect customers. Several respondents are working to align domestic rules with emerging international standards, but significant policy work remains to define liability, incident reporting and human oversight requirements.
Firms are therefore adopting interim governance measures, including human-in-the-loop controls, model risk management units and enhanced auditability. These measures aim to preserve supervisory confidence and customer trust while formal rules are still being developed.
Workforce transformation and skills gaps
The WAIFC–ADGM analysis finds AI is reshaping job roles more than eliminating them, with new positions emerging such as AI governance officers, model validation experts and ethics specialists. Financial institutions report growing demand for hybrid talent that combines deep financial domain knowledge with advanced technical skills in data science and machine learning.
Despite demand, the report warns of a global skills shortage, particularly among professionals able to bridge finance and technology. Surveyed centres identified training programmes, cross-sector secondments and targeted recruitment as priorities to close capability gaps and support sustainable adoption.
Innovation ecosystems and member initiatives
To foster responsible innovation, members of the alliance have launched a range of initiatives including regulatory sandboxes, incubators and targeted financing programmes. These measures are helping fintechs and incumbent firms test AI-driven products under supervised conditions, while regulators can observe risks and shape appropriate safeguards.
The report stresses that collaboration across regulators, financial institutions, technology vendors and academia is critical to scale effective practices. WAIFC’s platform is presented as a facilitator for knowledge exchange, allowing centres to share case studies and coordinate responses to transnational risks.
Leadership views and strategic implications
Lamia Marzouqi, chair of WAIFC, said the report underlines that AI is no longer theoretical in financial services but a practical force reshaping business models and operations. She urged greater cooperation among global centres to accelerate responsible adoption, stressing that no single jurisdiction can navigate the transformation alone. Salem Al Derai, chief executive of Abu Dhabi Global Market, described the findings as affirmation of the UAE’s role in global finance and reiterated ADGM’s commitment to linking markets and fostering investor confidence through sound governance.
Both leaders called for continued investment in skills, clear cross-border standards and mechanisms to ensure AI systems are ethical, inclusive and resilient.
AI adoption across international financial centres is advancing rapidly, but the WAIFC–ADGM report makes clear that durable progress depends on coordinated governance, workforce development and cross-sector partnership.
As centres work to balance innovation with oversight, the coming months are likely to see intensified efforts on regulatory alignment, practical guidance for model transparency and more structured programmes to build the technical and ethical capacity needed to deploy artificial intelligence in financial centres responsibly.