A recent study conducted by KPMG reveals a notable rise in the adoption of artificial intelligence (AI) applications in the finance departments of the United Arab Emirates (UAE). Decision-makers are focusing on impactful, quality solutions in areas such as accounting, financial planning, analysis, treasury, taxation, and risk management.
The study highlights that the pace of AI integration in the financial sector is impressively increasing, with 49% of respondents already employing AI in financial services, compared to a global average of 35%.
Furthermore, 59% indicated they are planning or executing pilot projects involving AI, while 33% of participants are in the planning or preliminary testing phases within their organizations.
Accounting and management control teams are leading the way in adopting AI-driven initiatives, benefiting from the technology’s advantages in narrative reporting, predictive analytics, and real-time insights.
One of the leading banks in the country has implemented generative AI tools to automate internal reporting and regulatory disclosures while enhancing financial risk assessments. Additionally, a government agency has employed an AI-powered virtual assistant to streamline invoicing processes, generate internal financial reports, and manage workflows for financial documents.
The KPMG report also underscores that despite the widespread application of AI, tangible benefits remain limited. Only 37% of financial leaders in the UAE reported positive returns on investment from AI, in contrast to 66% globally.
UAE companies are currently allocating 10% of their IT budgets to AI, compared to a global average of 13%, which reflects a strong investment trend.
However, the challenge lies in transforming these investments into organized and scalable applications that fortify AI’s role as a foundation for achieving more efficient and sustainable financial performance.
Paskhar Sahai, partner and head of the accounting and finance division for the UAE and Oman at KPMG Middle East, stated, “The national vision of the UAE and its ongoing investments in AI serve as strong catalysts for significant growth.”
Nonetheless, challenges remain, as the use of AI is still characterized by fragmentation and inconsistency, indicating fundamental difficulties in achieving widespread and sustainable adoption.
Furthermore, some finance teams may lack the resources to lead substantial transformations in this area or are simply deficient in expertise when it comes to integrating daily operational decisions with AI capabilities.
For success, these teams must accurately assess the return on investment, identify realistic early use cases, and navigate challenges related to data and legacy systems. This approach will facilitate internal buy-in and allow for faster scaling through more targeted applications.
The study also indicates a shift in focus among institutions and organizations towards generative AI. This technology is currently utilized by 41% for financial reporting, with expectations of that figure rising to 88% in the next three years.
Additionally, 54% of sector leaders plan to prioritize generative AI over traditional AI in the coming year, underscoring a widespread belief that this technology is a strategic necessity in the industry.