Latest news with #DFSA
Hi Dubai
a day ago
- Business
- Hi Dubai
DFSA Highlights Rising Digital Threats and Global Oversight Push in New Risk Report
The Dubai Financial Services Authority (DFSA) has spotlighted the rising complexity of cyber and AI risks in its latest report, underscoring the urgent need for global regulatory collaboration amid accelerating digital innovation. Released on Monday, the report titled 'Cyber and Artificial Intelligence Risk in Financial Services: Strengthening Oversight Through International Dialogue' outlines the increasing convergence of cyber threats, AI adoption, and the potential disruption from quantum computing. It comes on the heels of DFSA's inaugural Cyber and AI Risk Regulatory College, held in May 2025, which convened 70 senior representatives from 18 global financial authorities. 'Digital risks are no longer peripheral — they are fast becoming systemic,' said Justin Baldacchino, Managing Director of Supervision at DFSA. He emphasized the growing international consensus on evolving regulatory approaches to meet the pace of innovation. The report delves into the cybersecurity landscape, emerging AI risks, and the implications of quantum computing on current security frameworks. It notes a surge in sophisticated cyberattacks and stresses the urgency of preparing for a post-quantum cryptography era as traditional encryption methods face obsolescence. AI's rapid integration into financial systems also raises governance concerns, prompting calls for stronger oversight, transparency, and third-party risk management. Herman Schueller, DFSA's Director of Innovation and Technology Risk Supervision, stressed the value of cross-border cooperation, stating that 'open dialogue is essential to adapting oversight practices in a fast-evolving digital environment.' The DFSA report reflects a growing momentum among global regulators to strike a balance between safeguarding financial stability and supporting responsible technological innovation. News Source: Emirates News Agency
Zawya
2 days ago
- Business
- Zawya
Dubai Financial Services Authority explores regulatory insights into cybersecurity, AI
DUBAI - The Dubai Financial Services Authority (DFSA), the independent regulator of the Dubai International Financial Centre (DIFC), on Monday published its latest report, 'Cyber and Artificial Intelligence Risk in Financial Services: Strengthening Oversight Through International Dialogue'. The report provides timely insights into the evolving digital risk landscape and explores how emerging technologies such as Artificial Intelligence (AI) and quantum computing – which allow the process of complex problems much faster than traditional computers – are reshaping regulatory priorities. The publication follows the DFSA's inaugural Cyber and AI Risk Regulatory College, held in May 2025, which brought together 70 senior representatives from 18 financial authorities across the Middle East, North America, Europe, Africa, and Asia. The College served as a platform for international dialogue on the increasing complexity and interconnection of cyber risks, AI adoption, and the long-term implications of quantum computing. Justin Baldacchino, Managing Director of Supervision at DFSA, said, 'Digital risks are no longer peripheral – they are fast becoming systemic. This report reflects a growing supervisory consensus on where these risks are converging and how regulatory approaches are evolving. At the DFSA, we were proud to host our first Cyber and AI Risk Regulatory College, and we look forward to continuing meaningful dialogue with our regional and international peers in support of a secure, resilient, and trusted global financial system.' The report explores supervisory perspectives on three interconnected areas: cybersecurity threat landscape, quantum computing, and AI emerging risks. It draws on global insights and expert discussions on how financial regulators can respond to emerging risks without compromising innovation. Key themes highlighted in the report include the increasing frequency and sophistication of cyberattacks, including threats arising from emerging technologies and supply chain dependencies. It also addressed the potential for quantum computing to render current encryption in critical communication systems obsolete, and the importance of early coordinated planning around post-quantum cryptography, the cryptographic algorithms that are designed to be secure against the potential threats posed by quantum computers. The report further noted the growing adoption of AI across financial services highlights the importance of enhancing explainability and interpretability methods, robust third-party risk oversight, and responsible governance. Herman Schueller, Director of Innovation and Technology Risk Supervision at DFSA, commented, 'As innovation accelerates, financial regulators globally are actively examining how best to adapt oversight practices. This report reflects the value of open, cross-border dialogue in building mutual understanding of the regulatory, technical, and operational dimensions of digital risks.'
Khaleej Times
2 days ago
- Business
- Khaleej Times
DFSA report flags mounting risks from AI, quantum computing
The Dubai Financial Services Authority (DFSA), the independent regulator of financial services conducted in or from the DIFC, has sounded a clear warning about the rising convergence of cyber risks, artificial intelligence (AI), and quantum computing in a new report that outlines the future of digital regulation for global financial systems. 'Cyber and artificial intelligence risk in financial services: Strengthening oversight through international dialogue,' released on June 30, highlights how emerging technologies are reshaping both the opportunity landscape and the threat environment across financial services. Published after the DFSA's inaugural Cyber and AI Risk Regulatory College — attended by 70 senior officials from 18 regulatory authorities worldwide — the report captures regulatory consensus on the accelerating pace of digital transformation and the urgent need for coordinated global oversight. The report underscored the mounting complexity of cyber threats, the disruptive potential of AI, and the systemic vulnerabilities posed by quantum computing. As the lines between operational resilience, cybersecurity, and technological innovation continue to blur, the DFSA's message is clear: regulatory frameworks must evolve swiftly and collaboratively to protect the integrity of global financial systems in a world of accelerated digital disruption. 'Digital risks are no longer peripheral – they are fast becoming systemic,' said Justin Baldacchino, managing director of Supervision at DFSA. 'This report reflects a growing supervisory consensus on where these risks are converging and how regulatory approaches are evolving.' Among the report's key findings is the rising frequency and sophistication of cyberattacks, many of which now involve 'Living Off the Land' tactics — where attackers misuse legitimate tools already present in systems to evade detection. The reliance on shared digital infrastructure, such as cloud services and third-party platforms, has further amplified vulnerability. A single-point failure within a critical provider — be it a cloud operator, payment processor, or managed services firm — could lead to widespread disruption, according to the DFSA. Supply chain attacks also feature prominently in the risk narrative. Financial institutions face threats from compromised credentials, outdated or unpatched software, and malicious updates within partner ecosystems. The proliferation of Internet of Things (IoT) devices and edge technologies — often with weak security governance — has added new threat vectors to an already complex cybersecurity landscape. The report also explores how cloud adoption, while enhancing resilience and scalability, introduces its own set of challenges. Cloud platforms enable faster deployment of AI solutions, but they raise critical concerns around data privacy, jurisdictional control, and vendor dependence. When sensitive financial data is processed or stored across borders, regulatory compliance and data sovereignty become difficult to manage. Herman Schueller, director of Innovation & Technology Risk Supervision at DFSA, emphasised the need for cross-border regulatory collaboration: 'As innovation accelerates, financial regulators globally are actively examining how best to adapt oversight practices. This report reflects the value of open, international dialogue in building mutual understanding of the regulatory, technical, and operational dimensions of digital risks.' One of the most striking themes of the report is the looming risk of quantum computing. Though still in the early stages of development, quantum computers have the potential to break existing cryptographic systems that underpin global financial security. The DFSA report urges early, coordinated planning to prepare for the transition to post-quantum cryptography, warning that institutions must not wait until quantum capability is commercially viable to act. AI-driven threats are another focal point. Malicious actors are now using AI to automate attacks, bypass defences, and even create synthetic media such as deepfakes and voice clones that can deceive users and systems. These AI-powered tools can detect vulnerabilities, launch attacks at scale, and operate autonomously. The report calls for stronger explainability frameworks, third-party risk assessments, and robust governance to manage the growing reliance on AI across financial services. The DFSA also notes that rising geopolitical tensions are compounding digital risks. State-sponsored cyber operations and Advanced Persistent Threats are becoming more frequent and targeted, often remaining undetected for long periods. As global financial institutions operate across jurisdictions with varying regulatory maturity, they face fragmented compliance burdens and heightened exposure to politically motivated cyber threats. The DFSA report contributes to the regulator's broader commitment to proactive, principle-based supervision within the Dubai International Financial Centre (DIFC). Through ongoing initiatives like the DFSA Threat Intelligence Platform and work on AI governance, the authority is reinforcing its role as a thought leader in managing digital-era financial risks.
Zawya
3 days ago
- Business
- Zawya
New DFSA report explores regulatory insights into cybersecurity, AI and quantum risks
Dubai, United Arab Emirates: The Dubai Financial Services Authority (DFSA), the independent regulator of the Dubai International Financial Centre (DIFC), today published its latest report, Cyber and Artificial Intelligence Risk in Financial Services: Strengthening Oversight Through International Dialogue. The full report is available for download. The report provides timely insights into the evolving digital risk landscape and explores how emerging technologies such as Artificial Intelligence (AI) and quantum computing – which allow the process of complex problems much faster than traditional computers – are reshaping regulatory priorities. The publication follows the DFSA's inaugural Cyber and AI Risk Regulatory College, held in May 2025, which brought together 70 senior representatives from 18 financial authorities across the Middle East, North America, Europe, Africa, and Asia. The College served as a platform for international dialogue on the increasing complexity and interconnection of cyber risks, AI adoption, and the long-term implications of quantum computing. Justin Baldacchino, Managing Director, Supervision, DFSA, said: 'Digital risks are no longer peripheral – they are fast becoming systemic. This report reflects a growing supervisory consensus on where these risks are converging and how regulatory approaches are evolving. At the DFSA, we were proud to host our first Cyber and AI Risk Regulatory College, and we look forward to continuing meaningful dialogue with our regional and international peers in support of a secure, resilient, and trusted global financial system.' The report explores supervisory perspectives on three interconnected areas: cybersecurity threat landscape, quantum computing, and AI emerging risks. It draws on global insights and expert discussions on how financial regulators can respond to emerging risks without compromising innovation. Key themes highlighted in the report include: The increasing frequency and sophistication of cyberattacks, including threats arising from emerging technologies and supply chain dependencies. The potential for quantum computing to render current encryption in critical communication systems obsolete, and the importance of early coordinated planning around post-quantum cryptography (the cryptographic algorithms that are designed to be secure against the potential threats posed by quantum computers). The growing adoption of AI across financial services highlights the importance of enhancing explainability and interpretability methods, robust third-party risk oversight, and responsible governance. Herman Schueller, Director, Innovation & Technology Risk Supervision, DFSA, commented: 'As innovation accelerates, financial regulators globally are actively examining how best to adapt oversight practices. This report reflects the value of open, cross-border dialogue in building mutual understanding of the regulatory, technical, and operational dimensions of digital risks.' The report contributes to the DFSA's wider commitment to forward-looking supervision and its role in fostering collaborative, principle-based approaches to regulating emerging technologies. The DFSA continues to engage in international dialogue on emerging technology risks through initiatives such as its Threat Intelligence Platform, evolving work on AI oversight, and broader innovation agenda within the DIFC. The full report is available at for download here. For further information, please contact: Corporate Communications Dubai Financial Services Authority (DFSA) Level 13, The Gate, West Wing Dubai, UAE Email: DFSAcorpcomms@ About Dubai Financial Services Authority (DFSA) The Dubai Financial Services Authority (DFSA) is the independent regulator of financial services conducted in and from the Dubai International Financial Centre (DIFC), a purpose-built financial free zone in Dubai, UAE. The DFSA regulates and supervises financial services firms and markets in the DIFC. These include asset managers, banks, custody and trust services, commodities futures traders, fund managers, insurers and reinsurers, traders of securities and fintech firms. We supervise exchanges and trading platforms for both conduct and prudential purposes, overseeing an international securities exchange (Nasdaq Dubai) and an international commodities derivatives exchange (Gulf Mercantile Exchange). The DFSA is also responsible for supervising and enforcing anti-money laundering and countering the financing of terrorism requirements applicable in the DIFC. Please refer to the DFSA's website for more information. Justin Baldacchino is the Managing Director of Supervision at the DFSA, bringing 25 years of international finance experience. He possesses deep expertise in regulatory interpretation, liaison, implementation, risk, regulatory affairs, compliance, anti-money laundering (AML), capital, liquidity, innovation, and technology. Joining the DFSA in 2020, Mr Baldacchino previously served as the Group Head of Regulatory Compliance for ANZ Bank in Australia and held various senior roles at JP Morgan in Hong Kong, including Head of Regulatory Compliance, Asia-Pacific, and Head of International Operational Risk, Asia-Pacific. He also served as Head of Compliance and Risk Governance, Asia for National Australia Bank in Hong Kong. Mr Baldacchino is an alumnus of Melbourne Business School with an MBA and a Post Graduate Diploma, and he holds a Bachelor of Economics from La Trobe University. He completed the Harvard Executive Programme in Regulatory Strategic Management and is a certified AML Specialist. He has served as an Executive Board Member for the Association of Certified Anti-Money Laundering Specialists and is currently a member of The Basel Consultative Group. Herman Schueller is the Director of Innovation and Technology Risk Supervision at the DFSA. He oversees the supervision of fintech Authorised Firms and manages cyber and technology risk supervision across all DFSA Authorised Firms. He also drives innovation and supports the development of the fintech ecosystem within the DIFC. Before joining the DFSA, Mr Schueller served as Head of Digital Transformation at the Central Bank of the UAE, driving initiatives in Open Finance, Central Bank Digital Currencies (CBDC), and the Innovation Hub. As the project lead for mBridge, he collaborated with member central banks and the Bank for International Settlements Innovation Hub to implement a cross-border CBDC platform based on blockchain issuance and redemption. Prior to coming to the UAE, Mr Schueller led the Digital Transformation & Innovation team at Standard Chartered Bank in Hong Kong, enhancing project management capabilities across Greater China and North Asia.
Zawya
25-06-2025
- Business
- Zawya
DIFC announces consultation of new Variable Capital Company regulations
RELATED TOPICS TRADE RELATED COMPANIES DIFCA Indpt Franchise Dubai, UAE: Dubai International Financial Centre (DIFC), the leading global financial centre in the Middle East, Africa and South Asia (MEASA) region, proposes to enact new Variable Capital Company ('VCC') Regulations. The proposed regulations seek to significantly enhance investment structuring and asset management options for proprietary investment in the DIFC. Jacques Visser, Chief Legal Officer at DIFC Authority, said: 'DIFC Authority is pleased to announce the public consultation for our new Variable Capital Company Regulations. The proposed regime offers a unique vehicle with flexible share capital structuring for proprietary investment activities.' Variable Capital Company Regulations The proposed VCC framework is designed to accommodate proprietary investment activities and will not require DFSA authorisation or a requirement for a regulated fund manager, unless the vehicle engages in regulated financial services activities. This positions the VCC as an efficient vehicle for investors seeking the benefits of collective investment activity, or segregated investment strategies, whilst leveraging the flexibility and reduced procedural requirements for managing share capital. Key features of the VCC regime Key features of the proposed VCC Regulations include: Structure: A VCC may be established as a standalone company, or an umbrella structure with either incorporated or segregated cells. Flexible Share Capital: Share capital is equal to net asset value, providing flexibility for issuing and redeeming shares and enabling efficient capital inflows and outflows. Distributions: A VCC is not restricted to paying dividends out of its profits but can make distributions from capital based on the VCC's (or relevant Cell's) net asset value. Asset segregation: A VCC enables segregation of assets and investment strategies through incorporated or segregated cells, facilitating different risk profiles and the ringfencing of asset liability, whilst allowing for economies of scale through centralised management and oversight. Who may benefit? The proposed VCC model will be of particular interest to family-owned businesses, high-value multi asset holdings and complex proprietary investment portfolios, such as secondaries structures, that wish to benefit from consolidated management and the structuring options and flexibility that a VCC provides. Further details about the proposed VCC Regulations can be found in Consultation Paper No. 2 of 2025, available at link. The proposed regulations have been posted for a 30-day public consultation period with the deadline for providing comments ending on 24 July 2025. -Ends- About Dubai International Financial Centre Dubai International Financial Centre (DIFC) is one of the world's most advanced financial centres, and the leading financial hub for the Middle East, Africa, and South Asia (MEASA), which comprises 77 countries with an approximate population of 3.7bn and an estimated GDP of USD 10.5trn. With a 20-year track record of facilitating trade and investment flows across the MEASA region, the Centre connects these fast-growing markets with the economies of Asia, Europe, and the Americas through Dubai. DIFC is home to an internationally recognised, independent regulator and a proven judicial system with an English common law framework, as well as the region's largest financial ecosystem of 46,000 professionals working across over 6,900 active registered companies – making up the largest and most diverse pool of industry talent in the region. The Centre's vision is to drive the future of finance through cutting-edge technology, innovation, and partnerships. Today, it is the global future of finance and innovation hub offering one of the region's most comprehensive FinTech and venture capital environments, including cost-effective licensing solutions, fit-for-purpose regulation, innovative accelerator programmes, and funding for growth-stage start-ups. Comprising a variety of world-renowned retail and dining venues, a dynamic art and culture scene, residential apartments, hotels, and public spaces, DIFC continues to be one of Dubai's most sought-after business and lifestyle destinations. For further information, please visit our website: or follow us on LinkedIn and X @DIFC. For media enquiries, please contact: Nivine William | Nisha Celina Burson | | Rasha Mezher | Dubai International Financial Centre Authority Manager, Marketing & Corporate Communications
