Artificial Intelligence (AI) has become one of the revolutionary technology in international financial institutions that have been influential in changing the efficiency of operations, risk management, customer interaction, and regulatory practices. This review paper summarizes the available literature describing the use of AI in the modern financial organization and critically evaluates the governance challenges of AI implementation. According to the review, some of the major areas of applications are fraud detection, algorithmic trading, robo-advisory services, credit scoring, and Regulatory Technology (RegTech). It also discusses the governance issues which include data privacy risks, algorithmic bias, explain ability, cybersecurity threats, and regulatory issues. The results indicate that despite the fact that AI is improving the speed and accuracy of decision-making, it should be implemented using strong governance frameworks to guarantee transparency, accountability, and ethical standards. The article then ends by offering strategic suggestions on how AI can be introduced in the financial institutions of the world in a responsible manner