AI tipping point in financial services as Finastra research shows near-universal adoption

Financial institutions worldwide are accelerating artificial intelligence deployment, and new finastra research highlights how this shift is reshaping strategies, risk management, and customer experience across the sector.

AI use now near-universal across financial institutions

New findings from Finastra, released on Feb. 10, 2026 in London, indicate that financial services has reached a decisive inflection point for AI. Only 2% of financial institutions now report no use of artificial intelligence at all, signaling a transition from experimentation to full-scale execution.

The latest Financial Services State of the Nation 2026 report shows that six in 10 institutions improved their AI capabilities over the past year. Moreover, leaders are concentrating on deploying these tools responsibly, securely, and profitably across core domains such as payments, lending, compliance, and customer engagement.

The research, conducted among senior professionals at banks and financial institutions across France, Germany, Hong Kong, Japan, Mexico, Saudi Arabia, Singapore, the UAE, UK, the U.S. and Vietnam, underscores how widespread these changes have become. That said, the emphasis is now shifting from pilots to large-scale, integrated AI strategies.

Customer experience emerges as the primary battleground

The report identifies customer experience as a key competitive front line. Around 38% of financial institutions say that improved service and more personalized experiences are now their customers’ top demand. However, just 4% globally report offering no personalized services at all, underlining how critical tailored interactions have become to both competitiveness and trust.

This pivot toward personalization reflects broader financial services AI adoption, as institutions use>High confidence despite disruption and rapid transformation

Despite ongoing macroeconomic and technological disruption, industry sentiment remains strongly positive. According to the survey, 87% of respondents express high levels of optimism about their personal opportunities ahead. In parallel, 86% are optimistic about the outlook for their institutions as technology and operating models continue to evolve.

This optimism is rooted in the belief that AI, cloud, and modern software architectures will unlock new revenue streams while improving resilience and regulatory compliance. However, institutions acknowledge that realizing these benefits requires disciplined execution and robust governance frameworks.

AI becomes the core innovation engine

AI adoption is now close to universal, with 43% of institutions citing AI as their top innovation lever. In practical terms, this means artificial intelligence is fast becoming the connective tissue of finance, embedded across risk, operations, and customer functions.

The most mature use cases are already well defined. The report shows that 71% of institutions are running or piloting AI in risk management and fraud detection, and another 71% are using it for data analysis and reporting. Moreover, 69% deploy AI for customer service and support assistants, while another 69% use it for document intelligence management.

Looking ahead, the top three AI priorities for the next year include AI-driven personalization, agentic AI for workflow automation, and stronger AI model governance explainability. That said, institutions are aware that scaling these initiatives must go hand in hand with robust risk controls and transparency.

Security spending surges as digital risk intensifies

Alongside aggressive technology rollouts, security has risen sharply up the executive agenda. Institutions expect security investment to increase by an average of 40% in 2026, reflecting escalating digital risk, tighter regulatory scrutiny, and deeper reliance on technology within core banking operations.

This focus on protection aligns closely with how finastra research characterizes the sector’s AI evolution: not just faster, but safer and more accountable. Moreover, security is increasingly viewed as a foundation of customer trust, especially as data volumes, transaction speeds, and cross-border connectivity all expand.

Modernization and cloud as enablers of scalable AI

To support this new wave of innovation, modernization has become a top strategic priority. The report notes that nine in ten respondents, or 87%, plan to invest in modernization over the next 12 months. These programs are driven by the need to scale AI, strengthen resilience, and deliver superior customer experience.

Partnerships with fintech providers have become the default route to modernization for 54% of institutions. However, the study also highlights the central role of cloud infrastructure in enabling transformation. Nearly a third, or 29%, of respondents prioritize cloud adoption to lower costs, increase scalability, and accelerate innovation around personalization and compliance.

Finastra CEO: Technology now sits at the center of trust

Commenting on the findings, Chris Walters, CEO at Finastra, said that technology decisions now sit at the heart of trust, resilience, and customer experience. Institutions, he noted, are expected to move quickly but also responsibly, especially as regulatory scrutiny intensifies and customers demand financial services that work reliably, securely, and personally every time.

“This year’s findings show a sector moving decisively beyond experimentation and into execution,” Walters said, emphasizing the shift to real-world deployments. Moreover, he underlined that Finastra intends to work closely with customers as a strategic partner, helping them navigate this landscape with modern, secure, and innovative software solutions.

Conclusion

The State of the Nation 2026 report depicts an industry that has crossed a critical AI threshold. With only 2% of institutions reporting no AI use and strong commitments to security, modernization, and cloud adoption, financial services is now firmly in the execution phase of digital transformation.