This study aims to develop a framework for ethical leadership in the financial sector that fosters responsible innovation while addressing the risks posed by emerging technologies. It highlights the importance of aligning financial innovation with ethical principles to ensure long-term trust, transparency, and positive societal impact. The financial industry faces a persistent ethical dilemma balancing profit-driven innovation with integrity, fairness, and social responsibility. While legal compliance exists, it often falls short of addressing complex ethical challenges, including data misuse, algorithmic bias, and short-termism. The rapid advancement of technologies such as AI, blockchain, and big data further intensifies these dilemmas, making the need for robust ethical leadership critical. The study adopts a systematic literature review approach, drawing from scholarly journals, institutional reports, regulatory guidelines, and thought leadership in finance ethics. This review focuses on literature from 2000–2024, emphasizing trends post-global financial crisis and in the wake of FinTech and ESG developments. It identifies key ethical challenges, examines leadership responses, and synthesizes best practices for responsible innovation. This research proposes a leadership framework for responsible financial innovation, bridging ethical theory and practical application. It contributes to the discourse on ethical finance by integrating leadership theory, ethics, ESG principles, and technological governance. It also highlights the importance of longterm stakeholder value over short-term gains. Ethical leadership in finance is lacking uniform implementation despite increasing awareness. Financial institutions often struggle to integrate ethical considerations into innovation, especially regarding AI and data ethics. ESG-aligned practices improve transparency and trust but require stronger leadership commitment. Ethical lapses often stem from weak organizational culture and inadequate training. Leaders who embrace participatory, transparent, and sustainability-driven strategies are more effective in promoting responsible innovation. The study concludes that responsible innovation in finance requires a transformation in leadership practices grounded in ethics, transparency, and stakeholder engagement. Financial leaders must go beyond compliance to cultivate cultures of integrity and ethical foresight. Implementing the proposed framework can help institutions align innovation with public trust, sustainability, and social value.