AI Reaches Widespread Adoption Among Banks

A recent survey shows AI is deeply integrated into banking, supporting decision-making in credit, treasury, and enterprise risk. The study, which polled 300 leaders globally, found that most banks leverage AI in critical credit and risk choices, with 59% moving beyond experimentation into partial or widespread embedding within their processes. This includes the use of generative AI, which creates new content, and agentic AI, which can take actions or make decisions autonomously based on goals.

Despite this extensive adoption, the survey highlights a significant gap in governance. Only 18% of banks maintain fully operational AI governance processes, and 26% lack a dedicated AI model risk policy. Less than a fifth (19%) implement real-time AI model drift monitoring, which tracks changes in an AI model's performance over time to detect deviations. Furthermore, 42% lack defined “kill switches,” mechanisms to deactivate AI models that cross preset boundaries, indicating insufficient control frameworks.

These governance shortcomings, combined with internal resistance (cited by 71% of respondents), concerns over data quality (79%), and regulatory risks (77%), restrict AI's autonomous decision-making capabilities. Only 10% of banks report AI making autonomous credit or risk decisions at scale today. While 76% of respondents anticipate AI will achieve autonomous decision-making at scale by 2031, most banks currently prioritize AI for optimizing processes like credit decisions, reflecting a cautious, phased integration rather than immediate full delegation of control.

In Singapore, financial institutions demonstrate high AI readiness, with 64% actively deploying AI. To support this, the Monetary Authority of Singapore (MAS) recently launched the Future of Finance Institute (FFI). The FFI aims to accelerate AI deployment by providing validated use cases, implementation toolkits, and industry sandboxes, specifically focusing on developing good practices for agentic AI and strengthening risk management within the financial sector.