AI, an integration of machine learning (ML) and deep learning (DL), is revolutionizing industries like automotive, healthcare, gaming, finance, and more. In finance, AI is being applied to asset management, algorithmic trading, credit underwriting, and blockchain-based finance. Its adoption is driven by the availability of data and affordable computing power. AI leverages big data to autonomously learn and improve performance without explicit human programming. This technology offers advantages in enhancing financial deepening and efficiency. However, there are concerns about the digital divide between advanced economies and developing nations. To address these concerns, policymakers need to understand the implications and risks of AI in finance. This chapter provides valuable insights into the advantages and risks associated with the adoption of AI techniques. It emphasizes the need for responsible AI use to safeguard financial stability, market integrity, competition, and consumer interests. To support responsible AI innovation, policy recommendations are proposed. These recommendations aim to strike a balance between fostering AI advancements and ensuring the protection of financial systems and consumers. By addressing potential risks, policymakers can promote the responsible use of AI and support its continued growth and development. In summary, AI is transforming the finance industry through its applications in various areas. Policymakers must carefully consider the implications and risks associated with AI adoption, whilst also promoting responsible use and supporting innovation in this rapidly evolving field.