Dubai International Financial Centre (DIFC), the leading global financial centre in the Middle East, Africa and South Asia, launched the second report in its 2026 Future of Finance series.

Built on AI-driven, cloud first and asset light models, challenger banks are setting new standards for speed, personalisation and cost efficiency, exposing the limitations of traditional operating models. Their rapid growth pressurises established institutions to innovate faster to remain competitive. Without decisive transformation, industry profit pools could fall by USD 170bn by 2030, pushing many institutions below their cost of capital.

H.E Arif Amiri, Chief Executive Officer at DIFC Authority, commented: "As the global banking industry undergoes its most significant transformation in nearly two decades, institutions must embrace innovation, resilience and adaptability to thrive in a rapidly evolving financial landscape shaped by AI, digital assets and shifting global markets. In Dubai and DIFC, we are committed to enabling this transformation through a future-focused ecosystem that connects global institutions to high-growth opportunities across the Middle East, Africa and South Asia, while supporting banks in building the agility and resilience needed for the future."

The report identifies that banks moving early and decisively will not only defend profitability but unlock new client groups, new regions and frontier asset classes. In doing so, they position themselves to capture a larger share of global finance.

As a bridge between the East and the West, Dubai's geographical location enables banks to connect emerging FinTech innovation with global capital and reach high growth markets across Asia, the Gulf and Africa.

Banks are likely to use jurisdictions with supportive regulation to pilot new services and test model accuracy and governance in controlled environments before scaling regionally. As the world's first AI-native financial centre, DIFC is integrating intelligence into regulatory processes and market infrastructure, enabling firms to build, test and scale AI-driven financial services.