Investing in transformative AI technologies will be the key to surviving and thriving for financial institutions says Jeremy Thomas, Regional Vice President of Sales for ANZ, Backbase.
Australia’s financial services landscape is mature and competitive. It is a battleground where large established players are duking it out with their second and third tier counterparts even as a clutch of upstart fintechs are quietly intent on eating all of their lunches.
Customers meanwhile are no longer the loyal lifers that once they were. Changing banks has become a relatively straightforward affair even for consumers with complex arrangements and businesses that utilise multiple finance facilities.
Against this backdrop Australian banks cannot afford to take anything for granted least of all profitable growth. Those that are committed to surviving and thriving will need to get on the front foot investing in people programs and platforms that enable them to deliver secure service competitive offerings and a superior customer experience.
Here are some of the trends future focused institutions and their leadership teams will need to be on top of during 2026.
Going all in on AI
There has been no shortage of experimentation to date but rather less wholesale internal deployment of the game changing technology that is AI. That is likely to change as the new year wears on and banks push more automated processes into production mode across their operations in the contact centre the compliance department and the software development unit to name a few.
Before doing so however they will need to ensure they have unified fragmented data platforms to create the rich reliable data pool upon which every successfully scaled AI initiative is based.
Taking the fight up to the fintechs
While they are not yet the juggernaut they have become in the UK and the US digital only challengers represent a real and rising risk to established banks here in Australia. They may not boast full service offerings but what they can offer is proactive customer experiences along with a decent dollop of added value in the form of budgeting and expense tracking tools online coaching apps and the like.
That is courtesy of the fact they are not tied to legacy platforms and programs that make it difficult to deliver more than a generic or utilitarian digital banking experience.
Over the next 12 months more traditional providers can be expected to seek to protect margins and market share by taking a leaf out of the upstarts’ playbook. Building unified AI powered platforms that synthesise data analytics and channels is the means by which they will keep pace and leverage the advantage their incumbent status affords them.
Fostering stronger human connections
While the overwhelming majority of customer interactions now occur digitally financial services providers overlook the importance of human interactions at their peril. Although businesses and consumers may enjoy the convenience of swift seamless self service banking most of the time there are occasions when they would prefer to deal face to face with a banker who understands their circumstances and requirements.
That is why smart operators will be refining their service delivery models to ensure they can offer the best of both worlds. Expect to see AI powered engagement technology deployed as the backbone of high quality omni channel customer experiences that span the virtual and physical realms.
Cracking down on AI scams and spending big on security
AI is a powerful enabler and it has also become a powerful weapon in the hands of fraudsters and cyber criminals who have long set their sights on the financial services sector. As the incidence of deepfakes and AI generated scams surges in 2026 banks will need to turn to the same technology to stop bad actors in their tracks. That means greater use of AI to identify suspicious activity patterns and halt attacks.
For banks the security and integrity of their systems and the customer data and funds in their keeping is not an important thing. It is everything. Hence there will be ongoing investment in identity management technology that enables them to validate customers swiftly and seamlessly and continue to verify their bona fides as they engage and transact.
Customer education will continue to form an important piece of the security puzzle and so will clear transparent fraud resolution processes that reassure customers their bank has their back across all the channels all the time.
