European banks adopt AI to modernise operations

Artificial intelligence (AI) has continued to move from experimentation into mainstream banking operations, with new industry findings showing that more than 90% of European banks are already using AI across major business functions. The trend has highlighted a broader shift towards embedding AI into everyday operations while maintaining strong governance, accountability and regulatory compliance.

Banks have increasingly deployed AI to improve operational efficiency, strengthen fraud detection, automate routine processes and enhance customer experiences. The technology has also been applied across risk management, compliance monitoring, customer service, payments processing and data analysis. As adoption has accelerated, attention has shifted from isolated pilot projects to integrating AI into wider digital transformation programmes and core banking modernisation initiatives capable of delivering measurable business outcomes.

The rapid expansion of AI has reflected changing priorities across the banking industry, as financial institutions seek to improve productivity while responding to rising customer expectations and an evolving regulatory landscape. Rather than treating AI as a standalone innovation, many banks have begun embedding it into critical workflows to support faster decision-making, improve accuracy and increase operational scalability across business functions.

Oliver St Clair-Stannard, Vice President of Payments AI Strategy and Go-To-Market at RedCompass Labs, said: “Banks will not gain a competitive advantage from AI by tinkering around the edges. To create real value, they need to embed it into their modernisation programmes and rethink how decisions are made, how performance is measured and where human oversight remains essential.”

The comments have reflected a wider industry discussion around the responsible deployment of AI as financial institutions expand automation across payments, operations and customer-facing services. While AI has created opportunities to improve efficiency, speed and data-driven decision-making, regulators and banks have continued to emphasise the importance of transparency, governance and human oversight. Ensuring AI systems remain explainable, auditable and aligned with regulatory expectations has become increasingly important as institutions rely more heavily on automated decision-making.

The continued adoption of AI across European banking has underscored the sector’s wider digital transformation agenda. As institutions modernise legacy infrastructure and expand AI across core business processes, robust governance, ongoing model monitoring and responsible deployment are expected to play an increasingly important role in supporting operational resilience, regulatory compliance and sustainable long-term growth.