Artificial Intelligence (AI) is increasingly integrated into finance departments across the UAE, with many organisations adopting targeted AI tools for accounting, financial planning, treasury, tax, and risk management. However, challenges remain in turning AI investments into measurable returns, according to a recent KPMG study.
AI adoption in finance
KPMG’s benchmarking report, Is Your Finance Function AI Ready?, shows that 49% of UAE finance leaders currently use AI, while 59% are running or planning AI pilot projects.
Another 33% are in early stages of AI implementation. Accounting and management control teams are at the forefront of AI testing, focusing on areas like narrative reporting, predictive analytics, and real-time financial insights.
Examples include a regional bank using generative AI for internal reporting and regulatory disclosures, and a government utility employing AI assistants to automate billing and finance documentation.
Return on investment
Despite increased adoption, only 37% of UAE finance leaders report a positive return on investment (ROI) from AI, compared with 66% globally. Organisations in the UAE allocate around 10% of their IT budgets to AI, close to the 13% spent by global leaders. The main challenge lies in converting these investments into scalable, structured AI adoption that supports performance.
Bhaskar Sahay, Partner and Head of Accounting and Finance for the UAE and Oman at KPMG Middle East, said:
“The UAE Government’s national vision and ongoing investment in AI are a catalyst for immense growth. However, challenges remain, with AI usage still fragmented despite interest from major organizations. Some Finance teams are ill-equipped to lead large-scale AI transformations, or they simply lack the know-how to integrate day-to-day decision-making with AI.”
“To succeed with AI, it is critical for Finance teams to assess whether their ROI is robust and whether their first use cases are realistic given scattered data and legacy systems in many cases. This will enable them to gain buy-in and scale quickly through more focused implementation.”
Regulatory environment and generative AI
Regulation is not seen as a major obstacle, with only 25% of UAE finance leaders identifying it as a barrier. The absence of restrictive AI-specific laws and strong government support provide a favourable environment for AI development.
The study highlights a growing shift towards generative AI (GenAI), with 41% of finance leaders already using GenAI in financial reporting. This figure is expected to rise to 88% within three years. Over half (54%) of leaders plan to prioritise GenAI over traditional AI in the coming year, indicating its increasing strategic importance.
tanvir@dubainewsweek.com
