Financial Industry Developments in the Era of AI Applications: Analyzing Opportunities, Risks, and Governance Requirements with Special Reference to the Egyptian and Arab Context

Abstract

This paper examines developments in the financial industry driven by AI adoption (2021–2026). It aims to identify application areas, analyze economic opportunities, assess financial stability risks, and explore governance requirements within the Egyptian and Arab context, using a descriptive-analytical review. The results indicate that AI is reshaping business models with significant benefits (USD 200–340 billion annually), yet it introduces systemic risks such as bias and cyber threats. The research recommends developing proactive regulatory frameworks and addressing data gaps, building human and institutional capacities, activating artificial intelligence in the Arab banking environment.