DFSA Sounds Alarm on AI, Cyber and Quantum Risks in New Global Regulatory Report

The Dubai Financial Services Authority (DFSA) has published a wide-ranging report spotlighting the escalating risks posed by artificial intelligence (AI), cyber threats, and quantum computing within global financial markets. The report draws on insights from the DFSA’s inaugural Cyber and AI Risk Regulatory College, convened in May 2025, and marks a call to action for greater international collaboration in navigating emerging technologies.

Attended by 70 senior officials from 18 financial authorities worldwide, the event facilitated candid discussion on how supervisory bodies can stay ahead of increasingly complex digital threats. The resulting report offers both a reflection on current vulnerabilities and a roadmap for regulatory evolution.

Mounting Cyber Threats and Supply Chain Weaknesses

The report underscores a rising volume and sophistication of cyberattacks, particularly through digital supply chains and third-party service providers. As financial institutions become more reliant on technology partners, regulators are urged to heighten scrutiny of interconnected risk exposures, especially in cross-border contexts.

The DFSA advocates proactive threat intelligence sharing and enhanced due diligence across the financial services ecosystem—both within and between jurisdictions.

AI: Opportunity Meets Accountability

Artificial intelligence, a cornerstone of modern financial innovation, is also identified as a significant regulatory blind spot. The report highlights concerns over explainability, model bias, data governance, and dependency on opaque third-party AI vendors.

In response, the DFSA calls for robust supervisory frameworks that can hold firms accountable for how AI is developed, deployed, and monitored—ensuring human oversight remains central even as automation advances.

Preparing for the Quantum Leap

One of the report’s more forward-looking themes is the risk posed by quantum computing. With current encryption standards potentially obsolete in the face of quantum breakthroughs, the DFSA stresses the urgency of transitioning to post-quantum cryptography (PQC). Financial institutions are advised to begin risk assessments and scenario planning now, well ahead of any mainstream quantum deployment.

Global Dialogue and the DFSA’s Role

Crucially, the report positions collaboration—not competition—as the cornerstone of digital risk regulation. It champions collective action via supervisory colleges, international forums, and knowledge exchange platforms.

For its part, the DFSA will continue investing in its Threat Intelligence Platform, enhancing AI risk capabilities, and supporting innovation hubs within the Dubai International Financial Centre (DIFC).

A Wake-Up Call

The DFSA’s publication is both a technical assessment and a strategic signal. At a time when regulatory frameworks often trail behind technological change, this report reinforces the need for agile supervision grounded in global cooperation. It also cements Dubai’s ambition to be not just a hub for financial innovation—but a thought leader in how it is governed.