This study investigates the transformative impact of Artificial Intelligence (AI) on enhancing fraud detection and risk governance within financial ecosystems, with particular emphasis on sustainability, transparency, and resilience. Drawing on a comprehensive synthesis of scholarly studies, institutional analyses, and sectoral evidence from finance, insurance, and digital payment domains published between 2018 and 2025, the study demonstrates that AI substantially improves fraud detection accuracy, enables real-time anomaly identification, and strengthens institutional resilience. The findings further indicate that integrating explainable AI (XAI) and blockchain technologies enhances transparency, accountability, and ethical governance in financial systems. The study contributes theoretically by proposing a novel conceptual framework that integrates AI-driven efficiency with ethical responsibility and ESG principles to support sustainable financial governance. It also provides practical insights for regulators, financial institutions, and policymakers to strengthen AI governance, data protection, and responsible innovation. Nevertheless, the study is limited by its conceptual orientation and reliance on secondary evidence, highlighting the need for future empirical validation