Artificial intelligence (AI) and financial technology (FinTech) are changing the way the world's financial system works and having a bigger and bigger impact on sustainable development. Previous studies have investigated AI adoption, FinTech innovation, and financial inclusion separately; however, there is a scarcity of conceptual frameworks that cohesively incorporate technological capability, customer trust, and regulatory readiness within a sustainability-focused context. This paper formulates a detailed conceptual model elucidating the manner in which AI-driven financial innovation fosters sustainable financial development, mediated by customer trust and moderated by regulatory readiness. Utilizing interdisciplinary literature from finance, information systems, and sustainability research, the study integrates emerging evidence and delineates significant theoretical deficiencies. The proposed framework helps us understand responsible digital finance better by connecting how people use it on a small scale with how ready institutions are for it on a large scale. The paper adds to the body of knowledge by (1) bringing together the human, technological, and institutional aspects of AI-enabled finance, (2) linking FinTech innovation to the UN's Sustainable Development Goals (SDGs), and (3) suggesting a future research agenda for empirical validation. The results show that AI-driven financial innovation can make financial systems more inclusive and sustainable, but it needs trust-building mechanisms and flexible regulatory environments to work. The paper has ideas for policymakers, banks, and researchers who want to make responsible and long-lasting digital finance work