Fico outlines four AI trends reshaping banking by 2026

Fico has outlined four trends it expects to shape how banks and other financial institutions use analytics and artificial intelligence in 2026: faster decision-making, a rising fraud threat from generative AI, a more central role for chief information officers, and greater emphasis on human oversight in cyber defence.

It described AI as shifting from a competitive advantage to a standard layer of financial-services infrastructure. It also pointed to a gap between reported productivity gains and measurable financial results from AI deployments. An EY US AI Pulse Survey from 2025 found that 96% of organisations reported AI-driven productivity gains, while 56% saw significant measurable financial improvements.

Fico linked that gap to governance and trust as systems become more autonomous and more embedded in decision-making. It said organisations that succeed will combine rapid AI-driven decisioning with oversight and established decision frameworks.

Sequence Models

One trend centres on what Fico calls focused sequence models. It described them as a shift in transaction analytics: ingesting entire transaction histories in real time rather than relying on what it characterised as recursive profiling. This approach, it said, supports low-latency, high-throughput decisions.

Fico said focused sequence models can also process long-range transaction sequences and identify relationships in customer histories that traditional analytics systems often miss. It contrasted this with common methods that assess transactions in isolation or rely on summary measures of historical behaviour.

"Most systems to date analyze customer transactions in isolation or use rigid, limited-coverage measures of transaction histories--such as statistics like average spending, frequency patterns, and geographic tendencies--over different time and event scales. This approach misses the entirety of behavioral sequences that distinguish legitimate customers from sophisticated fraudsters, now afforded by ingesting the entire transaction history," said Scott Zoldi, Chief Analytics Officer, FICO.

GenAI Scams

The second trend is an increase in scams and fraud techniques that use generative AI. Fico said a single criminal can now operate at greater scale by using AI-generated voice clones, producing identity documents, and running targeted phishing campaigns.

It cited a BCG global survey that found 60% of companies faced AI-enabled attacks in the past year. Fico added that these attacks can unfold in seconds, raising the bar for detection and response.

Fico argued that monitoring systems built to react to suspicious activity struggle when attackers operate at "machine speed". It also highlighted vulnerabilities beyond card and payment transactions, including identity verification processes, non-monetary transactions, and authorised push payments.

"Banks must understand the speed with which fraudsters can now operate and commit to a proactive mitigation approach. This is best done by investing in modern infrastructure with enhanced capabilities that monitor every customer interaction in real time, and feeding that intelligence into a dynamic customer profile that informs the fraud decisioning across products, portfolios, and channels. Winning the fight against fraud will also require hyper‐personalized communication strategies that engage customers instantly through their preferred channels (text, app notifications, email) to verify and intervene against suspicious activity before financial losses occur," said TJ Horan, Vice President of Fraud Product Management, FICO.

CIO Role

The third trend places chief information officers at the centre of organisational change tied to AI deployment. Fico said enterprise AI has reached a level of complexity that cuts across functions and creates problems no single department can address alone.

It pointed to "agentic" AI systems, which it described as making autonomous decisions across customer service, financial operations, and strategic planning. These systems, Fico said, demand governance frameworks that extend beyond IT infrastructure and require broader business change.

Fico cited CIO.com's 2025 State of the CIO Survey, which found 75% of CIOs prioritise AI initiatives above all other technology investments. It also cited its own research on responsible AI in financial services, which found that 95% of organisations reported a lack of alignment between AI initiatives and business goals.

"Modern CIOs have evolved from traditional IT operators into strategic business leaders who drive organizational growth through business strategy, AI, cybersecurity, and innovation initiatives. As Agentic AI agents become integrated into the workforce, CIOs are positioned as key change agents who will shape how businesses execute their operations and adapt to this technological transformation," said Mike Trkay, Chief Information Officer, FICO.

Cyber Oversight

The fourth trend calls for human oversight alongside automated cyber defence. Fico said attackers now use AI for personalised phishing, deepfakes, and automated malware production. It also cited the EY US AI Pulse Survey from 2025, which found that 41% of organisations experiencing AI-driven productivity gains reinvested specifically in cybersecurity.

Fico warned that automated AI defence systems face risks such as model poisoning and hallucinations, which can reduce accuracy. It also said heavy reliance on automated detection and response can create accountability gaps when organisations must explain security decisions to regulators and stakeholders.

"AI is now central to cybersecurity defense, but companies cannot stand behind technology alone. As generative threats evolve faster than automated safeguards, trust hinges on advanced systems working in the loop with vigilant human oversight. The winners won't be those with the most powerful algorithms, but those who blend machine speed with human judgment," said Ben Nelson, Chief Information Security Officer, FICO.

Fico's leadership team described judgment and governance as the dividing line between effective AI adoption and risk.

"The financial institutions that will lead in 2026 won't be those with the most sophisticated AI-they'll be those that deploy AI with the most sophisticated judgment."

Fico said the sector already has technology that can process transactions in milliseconds, detect fraud before it happens, and personalise customer interactions. It added that financial institutions now face a choice: implement these approaches with governance in place, or adopt them reactively.