Regulatory reporting is becoming a major testing ground for artificial intelligence, but financial institutions are struggling to move beyond experimentation.

New research from Regnology, a RegTech provider, suggests that the biggest hurdle is no longer whether firms are willing to test AI, but whether they are prepared to trust it within live reporting processes.

The findings come from responses gathered from 276 practitioners across 22 countries, with most respondents working at financial institutions. Regnology’s 2026 research found that 71% of organisations are either exploring or piloting AI for regulatory reporting. However, only 16% said the technology is already embedded within their operations.

The divide is not simply a question of institutional size. While larger organisations are more likely to have reached the experimentation stage, they are not significantly further ahead when it comes to using AI in production. Among the largest firms surveyed, 49% are piloting AI, compared with only around 8% that have embedded the technology. Across different institution sizes, embedded adoption remains broadly between 8% and 15%.

Regnology describes this difference as the “agentic gap”, referring to the distance between testing an AI application and allowing it to operate as part of the reporting cycle. The research suggests that moving across this gap requires more than investment in technology. Firms need controlled processes that can demonstrate how AI decisions are made, monitored and reviewed while retaining human accountability.

The research indicates that financial institutions are primarily approaching AI as part of wider modernisation programmes rather than treating it as an objective in its own right.

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