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Despite Barriers, Financial Institutions are Clear About AI'
HTEC finds AI is everywhere in FSI, but scaling across the enterprise remains a challenge
HTEC, a global AI-first provider of software and hardware design and engineering services, recently released The State of AI in Financial Services & Insurance 2025, a first industry subset of its global research report in AI. This publication offers one of the clearest views to date into how financial institutions are adopting and scaling artificial intelligence. This industry-focused report analyses insights from 250 C-suite leaders within financial services and insurance, drawn from HTEC’s broader global study of 1,529 C-suite executives - including CIOs, CTOs, CDOs, CPOs, CFOs, COOs, CEOs and CSOs - across Saudi Arabia, the UAE, the United Kingdom, the United States, Germany and Spain.
The findings confirm a decisive shift in the industry: not a single respondent said AI is not a priority. Leaders overwhelmingly agree on AI’s potential, but scaling AI across the enterprise remains a challenge, with only 41.6% of leaders reporting AI is fully embedded across multiple functions, and a similar share (42.8%) noting deployment in limited areas. For HTEC, this mirrors the realities observed in long-term client engagements. Financial institutions understand the stakes, and the opportunity is clear, however, the friction begins when they attempt to connect isolated use cases and integrate AI into the core systems and workflows of the organization. Executives describe challenges that go far beyond technology itself.
Challenges: Integration, Talent, and Alignment
Despite near-universal adoption, FSI organisations face significant hurdles:
- Integration Complexity: 40% of executives cite difficulty embedding AI into existing processes and legacy systems as the top barrier to scale.
- Leadership Alignment: 36% report a lack of strategic alignment across leadership, slowing enterprise-wide transformation.
- Talent Shortages: Data engineering and analytics (38%), cybersecurity and data privacy (33%), DevOps/automation/edge skills (32%), and AI/ML expertise (31%) are the most acute capability gaps. These shortages drive higher costs (41%), reduce innovation (38%), and slow time to market (34%).
- AI Literacy: Only 38% of executive teams are rated as having high AI literacy.
Opportunities: Where AI Delivers Value
FSI leaders are clear about AI’s most valuable applications:
- Automating Underwriting: 42% see faster, more accurate risk assessment as a primary benefit.
- Fraud Detection and Risk Management: 39% highlight real-time pattern recognition and anomaly detection.
- Personalization and Customer Engagement: 38% focus on predictive, context-aware digital interactions.
- AI-powered Research and Advisory: 38% value real-time, context-rich insights for decision-making.
- Claims Automation: 34% note faster, more reliable outcomes for customers.
The report also finds that readiness to capture AI’s value remains uneven. While 23% of organisations feel equipped to adopt and scale AI rapidly, a much larger share - 52% - say they are either still learning and experimenting with limited ability to capture value or struggling to keep pace with the speed of change. This unevenness, combined with leadership alignment gaps and technical constraints, underscores the need for clearer roadmaps, stronger engineering foundations combined with partnerships where internal capacities are weak, and more deliberate workforce enablement.
“Firms that move fastest are often those where technology and business leadership work as one team, united around measurable outcomes rather than experimenting for its own sake. Partnering across functions and with external experts is essential to accelerate value creation and realize the full potential of AI in financial services,” said Jamie Alsop, Managing Partner for Financial Services & Insurance at HTEC and a co-author of the report.
