Financial services have reached a decisive AI tipping point, with just 2% of institutions reporting no use of artificial intelligence, according to new research from Finastra, a global leader in financial services software. This shift signifies a transition from experimentation to execution across the industry, reflecting a growing reliance on AI-driven solutions.
The findings are part of the Finastra Financial Services State of the Nation 2026 report, which reveals that six in ten institutions have enhanced their AI capabilities over the past year. Financial leaders are increasingly focused on scaling AI responsibly and securely across various domains, including payments, lending, compliance, and customer engagement.
As the landscape evolves, security has become a pressing concern for financial institutions. The research indicates a projected average increase of 40% in security investments for 2026, driven by rising digital risks and tighter regulatory scrutiny. Financial institutions are now expected to navigate these challenges while maintaining high operational standards.
The survey encompassed senior professionals from banks and financial institutions in multiple countries, including France, Germany, Hong Kong, Japan, Mexico, Saudi Arabia, Singapore, the UAE, the UK, the U.S., and Vietnam. This broad geographic representation highlights the global emphasis on AI as a critical component in financial services.
Among the report’s key findings, customer experience has emerged as a foremost priority. Approximately 38% of financial institutions state that improved service and personalized experiences are the top demands from their customers. Notably, only 4% reported offering no personalized services, underscoring the increasing importance placed on customer engagement as a competitive differentiator.
Despite ongoing disruptions within the industry, confidence remains robust. An impressive 87% of respondents expressed optimism about personal opportunities in the sector, while 86% are hopeful regarding their institutions’ futures as they adapt to technological advancements and evolving operating models.
AI adoption is nearing universality, with 43% of institutions identifying it as their primary innovation driver. The leading AI use cases include risk management and fraud detection, data analysis and reporting, customer service support, and document intelligence management, each utilized by around 69% to 71% of respondents. The report identifies AI-driven personalization, agentic AI for workflow automation, and AI model governance as the top priorities for the upcoming year.
The push for modernization is evident, with 87% of respondents indicating plans to invest in upgrading their systems over the next 12 months. This trend is largely motivated by the need to scale AI capabilities, enhance resilience, and provide superior customer experiences. Partnerships with fintech providers have become the default strategy for 54% of institutions, indicating a collaborative approach to modernization.
Cloud adoption has also gained traction, with nearly a third of respondents prioritizing it as a key enabler for reducing costs, enhancing scalability, and fostering personalization and compliance. This trend reflects the essential role of cloud infrastructure in modernizing financial services.
“Technology decisions now sit at the center of trust, resilience, and customer experience,” said Chris Walters, CEO at Finastra. “Institutions are expected to move quickly, but also responsibly, as regulatory scrutiny increases and customers demand financial services that work reliably, securely, and personally every time.” He further emphasized that this year’s findings indicate a sector transitioning decisively from experimentation to practical implementation.
As financial institutions navigate this transformative landscape, the findings highlight the critical importance of AI and modernization in meeting customer expectations and enhancing operational efficiency. The industry’s optimism amid disruption suggests a robust future as technology continues to evolve.
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