Emirati Financial Sector Embraces AI at Unprecedented Pace, KPMG Report Reveals

UAE Finance Departments Lead Middle East AI Revolution with 49% Already Implementing Solutions

The UAE is emerging as a regional powerhouse in artificial intelligence adoption within financial services, with nearly half of finance departments already deploying AI tools and an ambitious roadmap that could see generative AI usage surge from 41% to 88% by 2027. This rapid transformation positions the Emirates ahead of global trends while revealing both opportunities and implementation challenges that could define the future of financial operations across the Gulf region.

Current AI Penetration Reveals Strong Foundation

According to a comprehensive KPMG study, the UAE's finance sector demonstrates remarkable AI momentum. While 49% of finance departments currently use AI applications, an additional 59% are either planning or executing pilot projects. This creates a pipeline where over 90% of financial organizations will have some level of AI engagement within the next two years.

The implementation focus spans critical areas including accounting, financial planning, treasury operations, tax management, and risk assessment. Accounting and management control teams are leading this charge, capitalizing on AI's ability to generate narrative reports, conduct predictive analytics, and deliver real-time insights that transform decision-making speed and accuracy.

Real-World Applications Drive Results

Practical deployments are already delivering measurable value. A leading regional bank has integrated generative AI tools to automate internal reporting and regulatory disclosures while enhancing financial risk assessments. Meanwhile, a government-owned enterprise deployed an AI-powered virtual assistant that automates billing processes, generates internal financial reports, and manages document workflows.

These examples illustrate how UAE organizations are moving beyond experimental phases into operational deployment, creating templates that other regional players will likely follow.

Investment Gap Signals Untapped Potential

UAE companies currently allocate 10% of their IT budgets to AI initiatives, trailing the global average of 13%. This gap represents both a challenge and an opportunity. While the lower allocation might suggest conservative spending, it also indicates significant room for increased investment as organizations witness early AI successes and seek to scale implementations.

The critical challenge lies in transforming these investments into systematic, scalable applications rather than isolated pilot projects. Success will depend on organizations' ability to integrate AI capabilities into core financial processes while building internal expertise to sustain long-term growth.

Generative AI Emerges as Game-Changer

The study reveals a decisive shift toward generative AI technologies, with current usage in financial reporting at 41% expected to reach 88% within three years. This dramatic projected increase reflects generative AI's superior ability to create human-readable reports, analyze complex datasets, and provide contextual insights that traditional AI systems cannot match.

More tellingly, 54% of sector leaders plan to prioritize generative AI over conventional AI solutions in the coming year. This preference signals a strategic recognition that generative AI offers more versatile applications and faster implementation cycles, particularly valuable for finance departments seeking immediate productivity gains.

Regulatory Environment Provides Competitive Advantage

Unlike markets such as the European Union or China, where strict AI regulations create implementation hurdles, the UAE benefits from a supportive regulatory framework that encourages innovation without imposing restrictive compliance requirements. This regulatory flexibility, combined with sustained government support for AI development, positions UAE financial institutions to move faster than global competitors constrained by more cautious regulatory approaches.

Bhaskar Sahai, Partner and Head of Accounting and Finance for UAE and Oman at KPMG Middle East, emphasized that while the UAE's national AI vision creates strong growth momentum, implementation challenges persist. "Usage remains fragmented and inconsistent, reflecting fundamental difficulties in achieving comprehensive and sustainable adoption," Sahai noted.

Implementation Challenges Could Slow Progress

Despite positive trends, significant obstacles remain. Many finance teams lack the expertise to integrate AI capabilities into daily operational decisions, while legacy systems and data quality issues create technical barriers. The fragmented nature of current implementations suggests that organizations are struggling to move from pilot projects to enterprise-wide deployments.

Success will require finance teams to accurately assess return on investment, identify realistic initial use cases, and build internal support for broader AI integration. Organizations that master this transition will gain substantial competitive advantages, while those that remain in pilot mode risk falling behind more decisive competitors.

Regional and Global Implications

The UAE's AI finance transformation carries implications beyond national borders. As a major financial hub connecting Europe, Asia, and Africa, the Emirates' embrace of AI-powered financial services could influence regional standards and accelerate adoption across the broader Middle East and North Africa region.

For global financial institutions operating in the UAE, this trend creates both opportunity and competitive pressure. Organizations that successfully implement AI solutions in the UAE market may find themselves better positioned to expand these capabilities to other regions, while those that lag behind risk losing market share to more technologically advanced competitors.