dubai, united arab emirates – In banking, trust is not optional. That’s all. But even though banks are accelerating AI investments faster than other sectors, most are implementing AI without the oversight and infrastructure needed to gain trust. This is the central tension uncovered in SAS’ Data and AI Impact Report: The Trust Imperative’s New Banking Insights with Research Insights from IDC.
Of the four sectors examined in this study, banks outperform government, insurance, and life sciences in both AI spending and adoption of trusted AI practices. In fact, nearly a quarter (23%) of banks operate at the highest level of IDC’s Trusted AI Index. But despite these benefits, most banking institutions are still far from the report’s ideal state of high reliability and reliability. According to the report:
- only 11% of banks have achieved both high internal trust in AI and demonstrably trustworthy AI systems.
- nearly half (47%) These are people who find themselves in what IDC calls the “trust dilemma,” where they either don’t trust enough trustworthy AI and are therefore underutilizing it, or are overly reliant on AI systems that aren’t well-validated.
“Banking leads all sectors of this research when it comes to trustworthy AI, yet most banks’ fundamental readiness is far from where it needs to be,” said Stu Bradley, senior vice president of risk, fraud and compliance solutions at SAS. “About 9 out of 10 banks are yet to fully align trust and evidence, and around 1 in 5 banks still operate data in silos. Bridging the gap between AI ambition and AI readiness should be a top-down priority for all banks.”
As the UAE’s Vision 2031 and broader digital transformation efforts continue to gain momentum, banks across the Middle East are implementing advanced technologies to improve efficiency, strengthen resilience and deliver a better customer experience.
SAS Michel Golayeb, Managing Director, UAE, said: “With robust data, clear governance and effective oversight, banks in the Middle East are well-positioned to build a solid foundation that can scale up AI investments and deliver reliable results. At the same time, transparency “Banks that put responsible AI at the heart of their strategies will be best positioned to drive innovation, earn trust, and create sustainable long-term value.”
Investment is increasing, but fundamentals remain weak
This report is based on a global, cross-industry survey of 2,375 IT and business leaders and reveals troubling patterns. That is, investments in AI capabilities are not commensurate with investments in the pillars of responsible innovation that make AI trustworthy. This is a dangerous disconnect in an industry where the failure of a single model can trigger regulatory penalties and erode consumer confidence overnight.
And the problem is not a lack of investment. Banks’ AI spending trajectory outpaces all other sectors surveyed, with most banks (60%) expecting growth between 4% and 20%. A smaller subset (12%) expects even steeper increases. Despite this momentum, the study found that significant fundamental weaknesses remain, including:
- data silo. Nearly one in five banks (19%) still operate using siled data infrastructure, the worst rate of any industry surveyed.
- Data infrastructure is insufficient. The majority of banks lack effective data governance (45%) or a centralized or optimized data infrastructure (41%).
- talent gap. Many banks (42%) are also facing a shortage of specialized AI skills.
To address these issues, more than half (52%) of banks plan to expand their AI architecture. A further 43% plan to form or expand a dedicated AI team. However, less than a third (31%) plan to focus on developing and tuning the AI models themselves. Bottom line: These are not abstract or theoretical barriers. They are structural.
“The banking industry clearly understands the potential of AI, but understanding and execution are not the same thing,” said Kathy Lang, research director in IDC’s AI and Automation practice. “Without a strong data architecture, governance framework, and talent pipeline, banks risk pouring money into AI initiatives that fail to deliver ROI, or worse, undermine the very trust they rely on.”
Responsible innovation, not cost cutting, drives AI ROI
The report also challenges the assumption that the primary value of AI in banking is cost reduction. On the contrary, the banking industry single-handedly ranks product and service innovation above process efficiency as the primary source of AI-driven value.
Industry-wide ROI numbers show that banks are making some progress. Organizations using AI to improve customer experience reported the highest return of $1.83 per $1 invested. This is closely followed by organizations focused on increasing market share ($1.74). Companies focused on cost reduction reported the lowest at $1.54 per dollar. Additionally, organizations that prioritized trustworthy AI were 60% more likely to report doubling the overall benefits of their AI initiatives. This is solid evidence that responsible innovation is a growth promoter and has its own benefits.
Banks are also moving more decisively towards agent AI than other sectors, with nearly a third planning to increase investment in trusted AI to support more autonomous systems. But as AI systems gain greater decision-making power, the consequences of weak governance become even more significant.
“Regulators and customers are paying attention, and now almost half of banks are using unproven AI or are hesitant to leverage verified AI,” said Alex Kwiatkowski, director of global financial services at SAS. “No bank wants to run side-by-side in this competitive race, and cost cutting alone will not survive the competition.
“Winning banks will be those that invest in governance, explainability, transparency, and strong data foundations before they scale, rather than after something breaks.”
Learn more and access the full version Data and AI impact reportpublished September 2025, visit SAS.com/ai-impact.
About SAS
SAS is a global leader in data and AI. Using SAS software and industry-specific solutions, organizations transform data into trusted decisions. SAS delivers THE POWER TO KNOW®.
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