Eighty percent of U.S. banking executives expect artificial intelligence to significantly disrupt their business and operating models within three to five years, according to KPMG's 2026 Banking Technology Survey. The finding signals a strategic shift: banks are now racing to align cybersecurity, payments infrastructure, and acquisition strategies around AI capabilities simultaneously.
"AI, payments modernization, cybersecurity, and tech-driven M&A are no longer separate agendas," said Peter Torrente, KPMG's U.S. Banking Sector Leader. "Banks are increasingly being challenged to keep pace across technology, risk and growth simultaneously." The survey results highlight the growing importance of AI for Executives & Strategy in financial services as institutions manage these overlapping priorities.
Cybersecurity spending rises as AI threats multiply
More than three-quarters (76%) of banking leaders reported an increase in cyberattacks over the past year. In response, 92% are boosting cybersecurity budgets. Notably, 84% are allocating additional cybersecurity spending specifically to address AI-related risks. Executives cited AI-generated code vulnerabilities, deepfakes, and AI bots as leading emerging threats.
Payments modernization accelerates
Banks are moving quickly to upgrade payment systems. Over 70% plan to implement instant payments through RTP or FedNow within the next year. Nearly three-quarters expect to use AI-enabled biometrics for payment security and access management within three years. Operational efficiency, regulatory requirements, and aging legacy systems are the primary drivers behind these modernization efforts.
Technology reshapes M&A strategy
Technology is now a primary factor in acquisition decisions for 77% of executives over the next two to three years. Banks are targeting AI, data analytics, and cybersecurity capabilities through acquisitions. However, executives identified core banking systems, cybersecurity, and data integration as the biggest technology risks when combining institutions.
Why this matters for executives and strategy
The survey makes clear that AI is driving a simultaneous overhaul of security, payments, and M&A strategies. For strategy leaders, the integration challenge is paramount: every AI investment must account for new threat vectors, faster payment rails, and the due diligence required when acquiring tech-driven firms. The 84% of banks already earmarking cybersecurity funds for AI-specific risks signals that the cost of inaction is measured in both dollars and competitive positioning.
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