The Deep dive: EU AI act delay gives banks time to modernise

By Puja Sharma

The deep dive’ is our bi-weekly exploration of a relevant topic, hot trend, or new product. For Prime subscribers only.

How does it work?

The EU AI Act is one of the world’s first comprehensive regulatory frameworks for artificial intelligence, introducing a risk-based approach that places stricter obligations on AI systems used in high-impact sectors such as banking. For financial institutions, this means AI-driven decisions must be transparent, explainable, auditable and accountable.

However, compliance is about more than documenting AI models. Banks must be able to demonstrate where data originated, how an AI model reached a decision and who is responsible when outcomes need to be challenged. As Adrian Congiu, VP Head of Product Management at Mambu, noted, “For financial institutions, governing AI means being able to show where data came from, how decisions were reached and who is accountable when something goes wrong.” He argues that AI governance is ultimately an architectural challenge, with trustworthy AI depending on technology foundations that many organisations have yet to modernise.

Who is under the radar?

While the implementation of parts of the EU AI Act has been delayed, banks cannot afford to treat the additional time as a reason to pause AI programmes. AI capabilities continue to evolve rapidly, with institutions deploying the technology across lending, fraud detection, customer service, risk management and compliance.

Congiu believed the delay should instead be viewed as an opportunity to strengthen core technology. “The implementation delay gives banks more time to prepare. It doesn’t compel AI developers to slow down. Financial institutions should use this window to modernise the technology foundations that trustworthy AI depends on.” Rather than simply adding governance controls onto legacy systems, banks should use this period to improve data quality, model traceability and governance frameworks that will support AI over the long term.

Why does it matter now?

The EU AI Act is unlikely to be the final chapter in AI regulation. As standards mature and AI technology advances, banks will face evolving governance expectations that extend beyond today’s compliance requirements.

According to Congiu, institutions that focus only on meeting current regulations risk falling behind both technology and future policy developments. “The EU AI Act won’t be the last word on AI governance. Standards are still being developed, guidance will evolve and AI itself won’t stand still.” He added that “The biggest risk isn’t missing the next regulatory deadline. It’s spending the next two years preparing for yesterday’s AI and deferring the benefits that a compliant AI capability can deliver for a modern financial institution.”

For banks, the challenge is no longer simply complying with regulation. It is building modern AI foundations that can adapt to future requirements while enabling innovation, resilience and trust across the financial ecosystem.