AI adoption in financial services has reached a point of no return, with only 2% of institutions globally reporting no use of AI whatsoever. This is according to Finastra's Financial Services State of the Nation 2026 report, based on a survey of 1,509 senior executives across 11 markets.

Priorities and Challenges

Financial institutions are now focused on improving AI capabilities, with 43% citing AI as their single most important innovation lever. Top use cases include risk management and fraud detection (71%), data analysis and reporting (71%), customer service and support assistants (69%), and document intelligence management (69%).

Future priorities include AI-driven personalization, agentic AI for workflow automation, and AI model governance and explainability. Talent shortages (43%) and budget constraints are the main challenges. Institutions are increasingly turning to fintech partnerships (54%) to close these gaps.

Infrastructure and Modernization

Nearly nine in ten institutions (87%) plan to invest in modernization over the next 12 months, driven by the need to scale AI effectively. Cloud adoption, data platform modernization, and core banking upgrades are accelerating.

Governance

With 63% of institutions already running or piloting agentic AI programs, the technology raises questions of accountability, transparency, and control. The ability to explain, audit, and stand behind AI decisions is fast becoming a regulatory and reputational imperative.