Small banks are early AI adopters but infrastructure holds back scale

Nearly 2 in 3 already use AI in their IT departments, according to SAS’ study.

Small banks, credit unions, and lenders are ahead of other small and mid-sized businesses in adopting artificial intelligence (AI), according to a study by SAS.

Of 1,600 small and midsize businesses polled across 28 countries, financial institutions showed the strongest adoption and most established governance practices of AI in day-to-day operations, said SAS in its study “AI for SMBs: Closing the Readiness Reality Gap” published on 5 October 2026.

SAS defined a small business as organisations with 100 to 499 employees globally, and 100 to 999 employees in the US.

Nearly 2 in 3 or 64% of small financial institutions’ use AI in their IT departments, the study found.

Meanwhile, 47% of them use it in finance and risk, 44% in marketing, 42% in customer service, and 39% in product development.

However, 2 in 5 or 39% of small financial institutions said that their infrastructure is not ready, or is too costly, for broader AI deployment, SAS said.

A third or 33% cite lack of a unified data, analytics, and AI platform as amongst their AI challenges.

The small financial institutions also expressed concerns on security, privacy, and compliance, with 40% indicating that these are their top barriers to scaling AI.

“Most organizations are still working to strengthen data integration, platform consistency, internal skilling, and execution discipline needed to deliver repeatable impact across the business,” SAS said in the report.

Banking respondents’ near-term AI priorities include automating and streamlining core business processes (30%), reducing costs (30%), improving data quality and integration (28%), and increasing product and service innovation (26%), the study found.