AI adoption in financial services has effectively become universal–and the institutions still treating it as an experiment are now the outliers. According to Finastra’s Financial Services State of the Nation 2026 report, which surveyed 1,509 senior executives across 11 markets, only 2% of financial institutions globally report no use of AI whatsoever.
The debate is over. The question now is what comes next. For CIOs and technology leaders, the findings paint a picture that is equal parts opportunity and pressure. Six in ten institutions improved their AI capabilities over the past year, with 43% citing AI as their single most important innovation lever.
From fraud detection and document intelligence to compliance automation and customer engagement, AI has quietly embedded itself across the entire financial value chain. But near-universal adoption also means that deployment alone is no longer a differentiator.
From pilots to pressure
The report identifies a clear shift in how institutions are thinking about AI. The early conversation–whether to adopt, which use cases to try, how much to invest–has given way to something more operationally complex. Institutions are now focused on scaling AI responsibly, governing it effectively, and making it work reliably across enterprise-wide functions rather than in isolated pockets.
The top four use cases where institutions are either running programmes or piloting AI reflect that maturity: risk management and fraud detection (71%), data analysis and reporting (71%), customer service and support assistants (69%), and document intelligence management (69%).
These are not peripheral functions. They sit at the core of how financial institutions operate and compete. Looking ahead, the three priorities that dominate the next phase are: AI-driven personalisation, agentic AI for workflow automation, and AI model governance and explainability.
That last one deserves attention. As AI decisions become more consequential–and more scrutinised–the ability to explain, audit, and stand behind those decisions is fast becoming a regulatory and reputational imperative, not just a technical nicety.
The infrastructure problem
High adoption numbers can obscure an inconvenient truth: AI is only as capable as the systems underneath it. Finastra’s data makes this link explicit. Nearly nine in ten institutions (87%) plan to invest in modernisation over the next 12 months, driven precisely by the need to scale AI effectively. Cloud adoption, data platform modernisation, and core banking upgrades are all accelerating–not as standalone initiatives, but as the foundational layer that determines how far and how fast AI can actually go.
The barriers, however, remain stubbornly human. Talent shortages are cited by 43% of institutions as the primary obstacle to progress, with the challenge particularly acute in Singapore (54%), the UAE (51%), and Japan and the US (both at 50%).
Budget constraints follow closely behind. The institutions pulling ahead are increasingly turning to fintech partnerships–now the default modernisation strategy for 54% of respondents–to close those gaps without bearing the full cost of building in-house.
The regional picture
Across the Asia-Pacific, the data reflects distinct priorities. Vietnam leads on active AI deployment at 74%, driven by the urgency of financial inclusion and the need for faster payment and lending processing. Singapore is aggressively scaling cloud and personalisation investment, with planned spending increases above 50% year-on-year.
Japan, meanwhile, remains the most cautious market surveyed, with only 39% reporting active AI deployment — a reflection of legacy constraints and a cultural preference for incremental over rapid change.
Governance is the next frontier
With 63% of institutions already running or piloting agentic AI programmes, the technology’s trajectory is clear. But so is the challenge it brings. Agentic AI–systems capable of autonomous decision-making and multi-step task execution–raises the stakes considerably on questions of accountability, transparency, and control.
For enterprise leaders, the coming year is less about whether to invest in AI and more about how to do so in a way that regulators, customers, and boards can trust. As Chris Walters, CEO of Finastra, put it: 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.
The tipping point has been crossed. What institutions do with that momentum–and how carefully they govern it–will define the competitive landscape for the rest of the decade.
Finastra’s Financial Services State of the Nation 2026 report surveyed 1,509 managers and executives from banks and financial institutions across France, Germany, Hong Kong, Japan, Mexico, Saudi Arabia, Singapore, the UAE, the UK, the US, and Vietnam. Research was conducted by Savanta in November 2025.
(Photo by PR Newswire)
See also: How financial institutions are embedding AI decision-making
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