• Banks face existential threat from tech disruption and economic instability
• 99% of banking executives have implemented generative AI but most report limited returns
• AI is both a defense tool and a weapon for fraudsters using deepfakes and synthetic identities
• 80% of executives expect cyber threats to have major impacts in the coming decade
• Interest rate volatility is exposing liquidity risks across institutions
• Regulatory clarity seen by 68% as an enabler of innovation, not a constraint
• Banks are investing in ethical AI governance and automated compliance
• Strategic partnerships with fintech and Big Tech are accelerating innovation
• Data sharing with third parties is seen as a growing risk by 43% of executives
• Institutions like DBS and Standard Chartered are setting benchmarks in responsible AI governance

A new report warns that banks need to adapt fast or risk vanishing in the tech-powered financial landscape of the next decade.

The global ‘Intelligent Banking: The Future Ahead’ report by Economist Impact draws on insights from 1,700 senior financial executives across six continents.

It argues that economic volatility, digital disruption, and fast-moving competition are converging to create a perfect storm for financial institutions, suggesting that legacy banks are dangerously unprepared for the operational, ethical, and security demands of the digital intelligence era.

“Banks must restore consumer trust at scale by fortifying data governance and innovating with integrity,” said Stu Bradley, Senior Vice President of Risk, Fraud and Compliance Solutions at SAS, who partnered with Economist Impact to compile the report.

He described the years ahead as a ‘defining decade’ shaped by fragmented regulation, escalating cyber risks, and technological upheaval.

The research reveals that 99 percent of respondents have implemented some form of generative AI, but over half admit that the returns so far have been minimal.

While AI has already proven useful for fraud detection and personalization, it is also fuelling a new wave of cybercrime.

Deepfakes, synthetic identities, and AI-driven fraud are outpacing traditional defenses. Nearly 80 percent of executives expect cyber threats to have major operational impacts before 2035.

Beyond digital crime, interest rate fluctuations and liquidity concerns are creating vulnerabilities across the sector.

AI is increasingly being used for dynamic stress testing and real-time risk analytics to respond to these challenges. Cross-border compliance, meanwhile, is becoming harder to manage as global data, AI, and cyber regulations diverge.

Crucially, the study finds that most banking leaders do not see regulation as a blocker.

Instead, 68 percent view emerging rules on AI, open banking, and blockchain as essential enablers of innovation. Regulatory clarity, they argue, allows firms to adopt responsible technologies and embed trust into their operations.

Banks are responding by strengthening ethical AI frameworks and risk oversight. Institutions like DBS Bank and Standard Chartered have introduced dedicated AI governance models to ensure fairness, transparency, and compliance.

As traditional banks lose ground to digital-first challengers, embedded finance and Big Tech partnerships are gaining momentum.

Yet collaboration is not without risk. Data sharing with third parties is a major concern for 43 percent of respondents. In response, many firms are implementing shared governance and cybersecurity protocols to protect sensitive information.

The report outlines five imperatives for future-fit banking: ethical data governance, customer trust, streamlined compliance, strategic partnerships, and enterprise-wide innovation. According to Economist Impact principal Melanie Noronha, these steps are not optional but vital.

“Generative AI introduces both promise and peril,” she said. “Banks must balance innovation with vigilance at every turn.”

With the banking sector spending over £38 billion annually on compliance, the cost of inaction is steep. The next decade will not be defined by who adopts AI first – but by who uses it wisely.