89% of Banks Fail to Move AI into Regulatory Reporting Production, Regnology Study Finds

Regnology has released a global study, "The Agentic Gap," revealing that while 87% of financial institutions are currently exploring or piloting AI, only 16% have successfully moved these technologies into production. For fintech professionals, this highlights a critical bottleneck where governance and data quality, rather than technological maturity, prevent firms from automating manual processes that consume up to 50% of reporting budgets.

What was announced

The research, titled "The Agentic Gap: From Control to Intelligence in Regulatory Reporting," was produced in collaboration with management consulting firm Oliver Wyman. It identifies a significant disconnect between AI experimentation and operational reliance. While 87% of the industry is mobilized around AI, 89% of financial institutions have yet to reach production-level use for agentic workflows. This "agentic gap" represents the distance between a successful pilot and a system that can be trusted within the high-stakes regulatory reporting cycle.

The economic stakes are considerable. Data from Oliver Wyman indicates that regulatory reporting typically accounts for 1% to 3% of total expenditure at the banks studied. Within that spend, between 30% and 50% is dedicated to running processes internally, a figure that reflects the heavy reliance on manual labor. For Tier 1 institutions, the study estimates that approximately 15% to 25% of this reporting spend could be addressed through agentic workflows that move beyond simple automation toward intelligent decision support.

To bridge this gap, the report introduces a diagnostic framework designed to help institutions map AI readiness against the cost of inaction. It emphasizes the need for traceability, reconstruction of outputs, and alignment with emerging frameworks like the EU AI Act. In response to these findings, Regnology has highlighted its Regnology Intelligence (RGI) layer, which integrates explainability and agentic workflows under human oversight. The findings will be a central theme at the 33rd RegTech Convention, scheduled for 23 to 26 November 2026, with hubs in Frankfurt, London, New York, Singapore, and Zürich.

"Banks are conservative by nature, and in regulatory reporting they are right to be. The tolerance for error is close to zero, and a manual process may be inefficient, but it is familiar and readily defensible. The harder part is rarely the technology. It is finding people who understand the regulatory logic in depth and can turn it into something a system can apply safely. That combination is scarce, and it is what Regnology brings alongside institutions rather than asking them to assemble it alone."

Rob Mackay, Chief Executive Officer of Regnology.

The companies involved

Regnology is a prominent provider of technology solutions for regulatory, risk, tax, and finance reporting. The firm has established a significant market presence through its long-standing industry engagement, most notably by organizing the RegTech Convention. This event has been held annually since 1993 and has grown into one of the largest global conferences dedicated to financial regulation, bringing together supranational bodies, supervisory authorities, and industry experts. The company focuses on transforming regulatory requirements into actionable system logic, a task that requires both technical infrastructure and deep domain expertise.

Oliver Wyman, which commissioned the research alongside Regnology, is a leading global management consulting firm. It provides strategic analysis and economic forecasting for the financial services sector, often focusing on the intersection of digital transformation and market infrastructure. The firm’s involvement in this study provides the quantitative benchmarking for bank expenditure and the potential cost-savings associated with the adoption of agentic AI workflows.

What FF News has reported before

FF News has previously tracked the strategic initiatives of the firms involved in this report as they navigate the evolving digital landscape. On 8 September 2026, we covered how UK Finance and Oliver Wyman Unveil Roadmap for UK Securities Tokenisation Leadership, a report that similarly sought to provide a practical path for the industry to move from experimentation to scaled adoption in digital markets. This prior collaboration underscores a recurring theme in the sector: the transition from theoretical technology pilots to regulated, production-ready infrastructure requires a combination of industry-wide standards and clear governance frameworks.

What this means

The "agentic gap" is a clear signal that the regtech sector is entering a period of reckoning regarding AI. The industry has moved past the novelty of generative AI and is now confronting the reality that regulatory reporting requires a level of precision that standard LLMs cannot provide in isolation. The pressure is mounting on legacy manual processes, which are becoming indefensible in the face of rising costs and the complexity of new mandates like the EU AI Act. For the market, this suggests that the competitive advantage will shift away from those who simply "use AI" toward those who can prove their AI’s logic and maintain human accountability at scale. The move from control to intelligence is not just a technological upgrade; it is a fundamental shift in how institutional responsibility is managed.