The Dubai Financial Services Authority (DFSA), an independent regulatory body within the Dubai International Financial Centre, has released a report titled “Cyber Risks and Artificial Intelligence Risks in Financial Services: Enhancing Oversight through International Dialogue.” This document examines the evolving digital risks and the role of emerging technologies such as artificial intelligence and quantum computing, which enable computers to tackle complex problems faster than traditional systems, thereby reshaping regulatory priorities.
This report follows the first regulatory forum on cyber risks and artificial intelligence, hosted by the DFSA in May 2025, which brought together 70 senior officials from 18 financial institutions across the Middle East, North America, Europe, Africa, and Asia. The forum served as a platform for international dialogue on the increasing complexity of the interconnections between cyber risks, the adoption of artificial intelligence technologies, and the long-term implications of quantum computing.
Justin Baldachino, the Director General of the DFSA’s Regulatory Affairs, stated, “Digital risks have moved beyond being marginal and are rapidly becoming systemic threats. This report reflects a growing regulatory consensus on these intersecting risks and the evolution of regulatory approaches to address them. We take pride in hosting the first regulatory forum on cyber and AI risks, and we look forward to continuing constructive and purposeful dialogue with our regional and international counterparts to support a secure, resilient, and trustworthy global financial system.”
The report explores supervisory perspectives in three interconnected areas: cybersecurity threats, issues related to quantum computing, and emerging risks in artificial intelligence. It draws conclusions from global insights and expert discussions on how financial regulators can respond to emerging risks without stifling innovation.
The report highlights a notable increase in the frequency and complexity of cyber attacks, including those posed by new technologies and supply chain dependencies.
It also points out that quantum computing could render existing encryption systems in critical communication frameworks obsolete, stressing the importance of coordinated and proactive planning for post-quantum cryptography (cryptographic algorithms designed to be secure against potential threats posed by quantum computers). Additionally, the growing reliance on artificial intelligence in financial services emphasizes the need for developing interpretable and analyzable systems.
Hermann Schuler, Director of Technology Risk and Innovation at the DFSA, remarked, “As the pace of innovation accelerates, financial regulators worldwide are actively exploring the best ways to adapt their supervisory practices.”