Bain & Temenos Research: How is AI Reshaping Banking?

Research by Bain & Company reveals just how radically AI and cloud technologies are reshaping the financial services sector.

The report, Technology Trends Redefining the Future of Banking, was carried out in conjunction with banking tech leader Temenos and draws on joint analysis and data to map how AI-driven transformation is evolving across retail, SME, corporate, wealth and payments infrastructure.

A clear shift was uncovered: financial institutions are no longer simply digitising services, but re-architecting their technology foundations to unlock new revenue streams and operating models.

The five main trends

The report by Bain and Temenos identifies five megatrends shaping technology priorities for 2026 and beyond.

The first megatrend emphasised in the report is responsible AI, which will be the foundation of future innovation in financial services.

Amid evolving regulatory expectations, organisations are prioritising governance-led approaches to AI adoption, ensuring transparency, security and compliance are embedded from the outset.

Frameworks such as the Model Context Protocol (MCP), which allow AI systems to securely retrieve context and data from core platforms and external services without duplicating data or embedding logic directly into models, is being increasingly favoured by institutions.

This approach strengthens trust while enabling scalable AI deployment.

“Technology has become central to how banks earn trust, compete and grow,” says William Moroney, Chief Revenue Officer at Temenos.

“Those treating technology as a strategic asset are pulling ahead, while others are finding it increasingly difficult to keep pace.

“This report highlights where value is emerging and outlines the technology decisions shaping the future of banking.”

Cloud and data architectures enable AI scalability

Infrastructure underpinning financial services, is the focus of the second mega trend. 

Financial institutions are accelerating their shift to cloud-native architectures and SaaS platforms to reduce reliance on legacy systems and improve scalability, the report finds.

In this movement, data remains a critical challenge.

Fragmented environments and duplicated datasets affects more than a fifth of banking data.

This seriously limits the effectiveness of analytics and AI initiatives.

Organisations are hence adopting data mesh architectures to better organise and govern data, unlocking real-time, AI-driven insights.

AI agents automate complex workflows

Transformation of corporate and commercial operations through AI automation forms the crux of the third megatrend. 

This is because AI agents are beginning to orchestrate complex workflows, including deal structuring, compliance checks and documentation, reducing manual intervention and increasing efficiency.

Corporate treasurers are demanding real-time visibility into liquidity and payments.

According to Bain and Temenos says, this trend is accelerating investment in API-driven channels and modern core infrastructure capable of supporting always-on operations.

“Banks are entering a decisive period where technology choices will determine competitiveness for years to come,” explains Joseph Edwin, a Partner at Bain.

“Bain’s work across the sector shows that the winners will be those that modernise the core, adopt cloud-native architecture and build governed data and security foundations that allow AI to scale safely.” 

Stablecoins move into real-world use

Stablecoins evolving beyond its crypto origins to become credible tools for targeted banking and payments use cases, forms the fourth trend. 

Their role in cross-border transactions, liquidity management and wholesale banking, is being increasingly explored by financial institutions. 

Though stablecoins are not expected to replace traditional systems any time soon, they are becoming strategically relevant – and their adoption introduces both new efficiencies and operational complexities, particularly as organisations navigate regulatory and integration challenges.

AI enables hyper-personalisation at scale

The growing importance of AI-driven hyper-personalisation in retail and SME services is highlighted in the fifth trend. 

With AI and behavioural data enabling financial institutions to deliver more relevant, real-time offers, customer engagement and loyalty are strengthened. 

Currently banks are averaging just 2.59 products per customer and Bain and Temenos research shows that the opportunity to increase share of wallet is significant.

This is a broader transition from simply delivering digital services to actively monetising customer experiences through AI.

As financial institutions confront a more competitive and technologically complex landscape, future leaders will be defined not just by digital capability, but by how effectively they integrate AI and cloud technologies into every layer of their business.