Financial services has reached what Finastra describes as a decisive AI tipping point, with only 2% of institutions now reporting no use of artificial intelligence.
The finding comes from the Finastra Financial Services State of the Nation 2026 report, which surveyed senior professionals at financial institutions and banks across France, Germany, Hong Kong, Japan, Mexico, Saudi Arabia, Singapore, the UAE, the UK, the US, and Vietnam.
According to the research, six in 10 institutions improved their AI capabilities over the past year. AI is increasingly being positioned as a core operational layer, with 43% of respondents identifying it as their top innovation lever.
The most established use cases are risk management and fraud detection, and data analysis and reporting, both cited by 71% of institutions as either live or in pilot. Customer service and support assistants, and document intelligence management, follow at 69%.
The priorities for the year ahead reflect a shift from isolated tools to more integrated systems. Institutions highlighted AI-driven personalisation, agentic AI for workflow automation, and AI model governance and explainability as their top three focus areas.
Security investment is also set to rise sharply. Respondents expect security spending to increase by an average of 40% in 2026, as digital risk intensifies and regulatory scrutiny tightens. As core operations become more technology-dependent, resilience and compliance are moving higher up the boardroom agenda.
Customer experience is emerging as a competitive battleground. Thirty-eight per cent of financial institutions said improved service and more personalised experiences are now their customers’ top demand. Only 4% globally report offering no personalised services.
At the same time, modernisation is accelerating. Nine in 10 respondents plan to invest in modernisation initiatives over the next 12 months, driven by the need to scale AI, strengthen resilience, and enhance customer experience. Partnerships with fintech providers are now the default strategy for 54% of institutions.
Cloud adoption underpins much of that transformation. Nearly a third — 29% — of respondents said cloud is a top priority, reflecting its role in cost management, scalability, compliance, and faster product development.
Chris Walters, CEO at Finastra, said technology decisions are now central to institutional credibility and customer trust.
“Technology decisions now sit at the center of trust, resilience, and customer experience. 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 said. “This year’s findings show a sector moving decisively beyond experimentation and into execution.”
He added: “We look forward to working closely with our customers as strategic partners as they navigate this new landscape with modern, secure and innovative software solutions.”
Despite market volatility and structural disruption, confidence levels remain high. Eighty-seven per cent of respondents expressed high levels of optimism about the opportunities ahead at a personal level, while 86% are optimistic about the outlook for their institutions as technology and operating models continue to evolve.
The data points to an industry recalibrating around AI as infrastructure — embedded in risk, service, and operations — while preparing for a parallel rise in regulatory and security complexity.
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