German banks accelerate AI and IT overhaul despite limited rollout

A survey of German banks shows that 81 % see strong potential for AI‑driven agents to automate up to 75 % of routine tasks, yet only 13 % have deployed AI solutions enterprise‑wide. The main barriers are fragmented data sources, data‑quality issues and unclear governance, with 72 % of institutions planning to digitise paper records but 34 % hesitant to proceed without solid data‑security frameworks. Banks that have embraced comprehensive AI transformation, dubbed “Radical Transformers”, report revenue growth around 8 % compared with lower performers.

Separately, a Lünendonk analysis indicates that 62 % of German banks and insurers intend to increase their IT budgets for 2026, focusing on five priorities: digital resilience (90 % rating it high), IT modernisation (83 %), AI and data transformation, digital customer experience, and staff training. Legacy main‑frame systems still underpin many operations, and scaling AI from pilots to enterprise‑wide platforms will require robust data governance and modern architecture.