Financial institutions are entering 2027 with stronger growth expectations, growing confidence in AI and continued focus on cybersecurity, according to Wipfli’s latest state of the banking industry and state of the credit union industry research reports.
Now in its sixth year, Wipfli’s annual research explores the outlook, priorities and challenges facing banking and credit union leaders. This year’s findings show organizations investing in digital engagement, data analytics and AI while balancing increasing cybersecurity, fraud and governance risks.
Across both sectors, nearly 60% of executives reported AI outcomes that exceeded expectations. At the same time, cybersecurity and fraud remained the top concern for financial institution leaders.
“Financial institutions understand they can’t afford to stand still,” said Anna Kooi, partner and financial services practice leader at Wipfli. “The challenge isn’t whether to modernize. It’s how to pursue growth, AI and digital transformation while maintaining the security, governance and trust that customers and members expect.”
Banks pursue growth and new revenue opportunities
Banking leaders remain optimistic about growth heading into 2027. Nearly two-thirds (63%) of executives expect asset growth greater than 5% during the next 12 months. Among banks with more than $5 billion in assets, 76% anticipate growth above that threshold.
Organizations are also expanding their growth strategies. Exploring new revenue streams ranked among the top three strategic priorities, reflecting a focus on diversification and long-term profitability.
“Bank executives are taking a disciplined approach to growth,” Kooi said. “They’re prioritizing efficiency, profitability and long-term value while investing in the technology and capabilities needed to remain competitive.”
Key findings from the banking report include:
- 63% expect asset growth above 5% during the next 12 months.
- 59% report AI outcomes have exceeded expectations.
- Cybersecurity and fraud ranked as the top concern for the fourth consecutive year.
- Exploring new revenue streams climbed into the top three strategic priorities.
- 66% expect AI to have no impact on headcount.
- 21% expect staff increases to support data and AI initiatives.
Cybersecurity threats remain a significant challenge. More than one-third (38%) of banking executives reported increased cyberattacks during the past year, while 46% reported increased fraud activity. Although some institutions see signs of stabilization, many leaders recognize elevated risk as a permanent operating reality.
AI adoption continues to gain momentum. Only 21% of banking executives reported having no formal AI initiatives, paused efforts or canceled projects. Financial institutions are seeing the greatest impact in fraud detection and financial crime prevention, customer service, back-office operations, and risk and compliance support.
Credit unions strengthen member relationships through technology
Credit unions also reported a positive outlook for the year ahead. Sixty-nine percent of executives expect asset growth above 5% during the next 12 months, rising to 82% among institutions with more than $1 billion in assets.
Deposit acquisition emerged as the sector’s leading growth priority, underscoring the importance of member relationships and funding stability. Digital member engagement and data analytics and AI capabilities also ranked among the industry’s top strategic priorities.
“Credit unions continue to demonstrate that innovation and member service go hand in hand,” Kooi said. “The organizations building momentum are using technology to strengthen relationships, improve efficiency and create better experiences for their members.”
Key findings from the credit union report include:
- 69% expect asset growth above 5% during the next 12 months.
- 59% report AI outcomes have exceeded expectations.
- 50% plan to expand AI investments focused on fraud and financial crime prevention.
- Cybersecurity and fraud ranked as the top concern among executives.
- 63% reported increased fraud activity during the past year.
- 71% expect AI to have no impact on staffing levels.
Cybersecurity concerns remain elevated across the sector. More than half of executives reported increased cyberattacks during the past year, while nearly three-quarters experienced at least one unauthorized network or data-access incident.
AI is also becoming a core operational capability. Only 8% of credit union executives reported no formal AI initiatives, paused projects or canceled implementations. Institutions are most commonly applying AI to back-office operations, fraud detection, financial crime prevention, and risk and compliance functions.
“Many institutions have moved beyond asking whether AI belongs in their organization and are now focused on where it creates the greatest value,” Kooi said. “Success starts with governance frameworks that allow organizations to innovate while maintaining trust.”
AI delivers value, but governance remains critical
The research shows that AI is producing measurable results across the financial services industry. Nearly 60% of banking and credit union executives said AI outcomes have exceeded expectations, particularly in fraud detection, operational efficiency and risk management.
Even with those gains, leaders continue to weigh cybersecurity risks, regulatory uncertainty and governance requirements as they expand AI initiatives.
“Pursuing AI is a strategic choice, and it needs to match an institution’s risk tolerance,” Kooi said. “AI adoption may create some cyber exposure, but inaction creates competitive risk and ungoverned action creates operational exposure.”
As banks and credit unions navigate changing market conditions, the findings suggest that growth, technology investment and strong governance will remain closely connected. Institutions that successfully balance innovation with security and risk management will be better positioned to compete and serve customers and members in the years ahead.