Financial institutions globally have moved beyond the experimental phase of artificial intelligence adoption, with near-universal deployment now underway across core operations such as payments, lending, compliance and customer engagement, according to Finastra’s Financial Services State Of The Nation 2026 report.
The study found that only 2 per cent of financial institutions currently report no use of AI, highlighting a decisive shift toward execution-led implementation. Nearly 60 per cent of institutions said they enhanced AI capabilities over the past year, with a growing focus on scaling deployment in a secure, compliant and commercially viable manner.
Technology risk is simultaneously emerging as a central strategic priority. Financial institutions expect security spending to increase by an average of 40 per cent in 2026, reflecting rising cyber threats, tighter regulatory oversight and deeper reliance on digital infrastructure for core financial operations. The findings are based on a survey of senior professionals across markets including France, Germany, Hong Kong, Japan, Mexico, Saudi Arabia, Singapore, the UAE, the UK, the US and Vietnam.
Customer experience is becoming a primary competitive battleground, with 38 per cent of institutions reporting that customers now prioritise improved service and personalised offerings above all else. Only 4 per cent of institutions globally said they offer no personalised services, underscoring how embedded personalisation has become in financial services delivery.
AI Scaling Drives Technology Investments
Industry sentiment remains strongly positive despite rapid technological shifts. Around 87 per cent of respondents expressed high personal optimism about future opportunities, while 86 per cent remained optimistic about their institutions’ outlook as digital transformation accelerates.
Artificial intelligence is increasingly emerging as the central innovation layer across financial services, with 43 per cent of institutions identifying AI as their top innovation lever. The most widely deployed or piloted use cases include risk management and fraud detection and data analysis and reporting, both at 71 per cent, followed by customer service assistants and document intelligence applications at 69 per cent each. Looking ahead, institutions are prioritising AI-driven personalisation, agentic AI for workflow automation and stronger governance and explainability frameworks.
Modernisation spending is accelerating in parallel, with about 87 per cent of institutions planning technology upgrades over the next year to support AI scale-up, improve operational resilience and enhance customer experience. More than half of respondents said these upgrades are being pursued through partnerships with fintech providers, signalling a shift toward ecosystem-led innovation.
Cloud adoption continues to underpin transformation efforts, with 29 per cent of institutions prioritising cloud migration to reduce costs, improve scalability and enable faster product innovation and regulatory compliance.
Overall, the report suggests technology strategy is now closely tied to financial institutions’ ability to maintain trust, ensure resilience and deliver personalised customer outcomes, as the sector transitions into a phase of large-scale AI execution rather than isolated pilot deployment. |
