EXCLUSIVE: “Leaning In and Stepping Up” – Radha Suvarna, Finastra in ‘The Paytech Magazine’

Finastra’s annual State Of The Nation report on the challenges facing financial institutions and their technology responses to them, highlights just how much the instant payment revolution is driving adoption of AI

When one of the world’s leading fintechs concludes that decisions made by financial institutions in the next 11 to 18 months will shape their competitiveness for the rest of the decade, it pays to take notice. Finastra’s State Of The Nation 2026 report based its observation on a survey of more than 1,500 banking and FI executives across 11 countries, including the US and the UK.

It revealed that AI, modernisation, security, and customer experience are no longer being viewed as separate initiatives. Instead, they are converging into a single operating reality where execution, resilience and trust matter just as much as innovation. Nowhere is this more apparent than in payments. That’s no surprise, says Radha Suvarna, Finastra’s Chief Product Officer for Payments.

“Payments is in the front line of customer experience and trust, more than any other area of financial services, because we’re all interacting with payments every day,” he says.

What is new, however, and what the report identified, is that confluence of priorities – execution, resilience and trust – and how AI is being leveraged across all of them.

Suvarna’s advice?

“Progress is not about being the biggest or the fastest, but about being the most dependable”

Finastra State of the Nation report 2026

“Lean in and figure out your strategy. Craft a story that is very customised to your specific organisation. That’s the key. Think about what’s going to deliver most value to your customers in the near term. That could be delivering a particular use case, modernising a set of capabilities, or improving the user experience.”

Whatever their specific roadmap, Suvarna cautions against banks and FIs going on the journey alone.

“Whether it’s a bank or whether it’s Finastra, if everyone tries to do everything by themselves, no one’s going to be successful,” he says. “And it’ll take you away from the core mission of your organisation. If the core mission of my organisation, as an example, is to deliver payment hubs and financial messaging solutions that work all the time, I may not have any business building fraud detection models. Just because I can doesn’t mean I should. The same applies to every organisation.

“So, figure out what your core mission is, focus on that, and partner with ecosystem players, because that will help you be nimble, experiment and fail fast. Banks and financial institutions need to keep that in mind, especially in times like this, where the change is happening fast and furious.”

Finastra’s Top 5 Ways To Lean On Partners To Future-proof

1. Accelerate Modernisation

“Ninety-six per cent of the people we surveyed said they are actively pursuing AI and modernisation within their organisations, either implementing something or working on implementing something,” says Suvarna. “Experimentation is the key theme that we have seen this year,” he continues, “but banks can do that only when they have modern technology platforms that make it easier to experiment and fail fast.”

Here, though, many feel they face a dilemma: partnerships speed up innovation, but in-house builds ensure data sovereignty, even if that comes at a much higher cost in expertise and infrastructure. The report proffers a pragmatic solution:

“For leaders who are cautious about over‑reliance on external providers, the most resilient path forward is not choosing one model over the other but blending both,” it says. “Leveraging partnerships to accelerate innovation while retaining in‑house builds for areas where control, compliance, and data integrity are paramount.”

This is the first survey where AI and modernisation are equally top of mind for business leaders, points out Suvarna. While AI can deliver powerful customer experience in some cases, it is also driving internal change. “And that’s mutually reinforcing, multiplying the ability to deliver the end customer experience, because now banks can experiment with new solutions faster, thanks to AI coding and testing agents,” says Suvarna.

“It’s going to take longer initially to test some of these AI use cases. That’s always going to be the case with anything new. But stay with it because the exponential growth of efficiencies that you will see subsequently is likely to deliver real value.”

2. Close the skills gap

Forty-three per cent of financial institutions surveyed by Finastra for the report said that a talent and skills gap is stopping them from modernising. So, its second recommendation relates to accessing specialised talent in AI, Cloud and security, where shortages are most acute. Suvarna highlights how the dramatic growth in demand for immediate payments has highlighted the necessity for FIs to have the right staff working on the right technology.

“Instant payments are growing, and, as a result, regulators are expecting banks to make their systems resilient and always on. In order for them to deliver that, the payment models, be it fraud detection or sanctions screening, have to become much faster,” he says. “You don’t have the luxury of a wire transfer that can sit for two hours while someone is going through a repair. The transaction has to happen within seconds, and it’s humanly impossible for somebody to go and fix it in that timeframe.”

“Experimentation is the key theme that we have seen this year. But banks can do that only when they have modern technology platforms that make it easier to experiment and fail fast

Radha Suvarna, Finastra

That’s forcing adoption of AI as a co-pilot and redefining the role of operations staff. Across the sector, the recruitment challenge is particularly acute in Singapore (54 per cent), the UAE (51 per cent), and Japan and the US (50 per cent). And within the sector, hedge funds face the largest shortages, says the report. So what’s the solution?

Here again, partnerships with providers are seen as key. Fifty-four per cent of organisations surveyed believed this was the fastest way to add new technology capabilities and mitigate internal gaps, allowing them to ‘access innovation without bearing the full burden of talent’.

3. Streamline integration

The best way for institutions to go about streamlining integration, according to the report, is by adopting modular APIs and interoperable platforms. That allows them to modernise discrete areas of the business where value can be felt fast.

“Modernise a set of capabilities, whether it’s user experience or the intermediate interface layer, if that’s what is going to deliver most value to the customers in the near term, versus going all the way to the back end and modernising the underlying systems,” says Suvarna.“Put some points on the board in terms of the value of modernisation and then progressively go on the journey.”

4. Strengthen compliance

Almost half of the institutions surveyed cited constantly evolving risks and AI deployment itself as their two biggest security concerns. As a result, four in 10 were prioritising investment in security. Finastra suggests they reframe it as an investment not only in risk but also in
competitiveness.

“Leaders need to think about security not just as an insurance policy but also as a growth strategy,” the report says. Suvarna cites the use of AI for fraud detection and sanction screening as examples of where technology dollars in auditable workflows and embedded reporting not only minimise regulatory risk, but also improve customer experience, driving better results for banks.

5. Balance sovereignty concerns

Finastra is aware that this is an acute issue for banks. But it can be achieved by establishing governance frameworks that maintain control while benefitting from external innovation, it says.

“We have to absolutely retain, if not enhance, security and trust within payments,” stresses Suvarna. “No matter what the better customer experience might be, new technology and capabilities can’t be at the expense of that. That is absolute table stakes.”

The key takeaway from the State Of The Nation report?

“Progress is not about being the biggest or the fastest, but about being the most dependable. Firms that build responsibility into every decision will not only earn trust, but they will also define what competitiveness looks like in the age of AI.

This article was published in The Paytech Magazine Issue #18, Page 32-33