Only 2% of Financial Institutions are Yet to Adopt AI

Only 2% of financial institutions now report no use of AI, signaling that the technology has moved beyond experimentation and into mainstream execution across financial services, according to Finastra.

Findings from the ‘Finastra Financial Services State of the Nation 2026’ report shows the industry has reached a decisive AI tipping point.

Six in 10 institutions said they improved their AI capabilities over the past year, with leaders increasingly focused on scaling AI responsibly, securely, and profitably across core functions such as payments, lending, compliance, and customer engagement.

AI is now seen as a central driver of innovation, with 43% of institutions citing it as their top innovation lever. The most widely adopted use cases include risk management and fraud detection, and data analysis and reporting, both cited by 71% of respondents.

Customer service assistants and document intelligence management follow closely, each at 69%. Over the coming year, priorities are shifting towards AI-driven personalization, greater automation through agentic AI, and stronger governance and explainability of AI models.

Alongside AI adoption, security is rising sharply up the agenda. Financial institutions expect security investment to increase by an average of 40% in 2026, reflecting growing digital risk, tighter regulatory scrutiny, and deeper reliance on technology across core operations.

Customer experience has become a clear competitive differentiator. More than a third of institutions (38%) said improved service and more personalized experiences are now their customers’ top demand. Just 4% globally reported offering no personalized services, underscoring how critical tailored experiences have become to trust and retention.

Despite continued disruption, confidence across the sector remains strong. Some 87% of respondents expressed optimism about opportunities ahead at a personal level, while 86% are optimistic about their institutions’ outlook, supported by plans to invest in modernization, fintech partnerships, and cloud adoption to enable future growth.