How Financial Services Providers Can Prepare for AI, Cybersecurity, and Fraud Risks in 2026

The financial services and insurance (FS&I) sector is at a crossroads, according to the new Dun & Bradstreet Financial Services & Insurance Pulse Survey Report. Based on the responses of more than 2,000 financial services professionals in the U.S. and other major markets, the sector is facing a stark reality: While financial services organizations are investing heavily to mitigate risk, foundational weaknesses threaten progress toward resilience and digital transformation.

For insurers, financial institutions, and financial technology (fintech) providers, the findings are both sobering and urgent.

The results reveal a sector eager to innovate through AI and digital transformation yet held back by challenges like poor data quality, manual processes, and fragmented systems. Many financial services providers still feel underprepared to manage key threats (such as fraud, cybersecurity, and regulatory pressure) and build resilience, despite investing more to address the risk.

In addition, while new technologies that support efficiency are available, many bankers, insurers, and fintechs are not yet taking advantage of them. Key processes — including underwriting, onboarding, risk assessments, and marketing — remain completely or mostly manual in approximately 43% of firms.

What Do Financial Services Providers See as Top Threats? 

 In the U.S., concern about cybercrime and cybersecurity is high. Cybercrime is generally considered to be the illegal activities carried out using computers or the internet. Cybersecurity, on the other hand, is usually defined as the practices enacted to protect systems, networks, and data from such digital attacks.

A whopping 85% of U.S. respondents see cybersecurity as their greatest vulnerability, followed by fraud at 78%. These figures outpace most other markets, signaling that U.S. financial services providers feel particularly exposed to criminal activity and digital threats. The surge in sophisticated attacks over the past 18 months has amplified anxiety, with 69% reporting heightened concern compared to a year and a half ago.

Despite increased investment — 73% of U.S. financial services organizations have boosted spending on cybersecurity and fraud prevention solutions — they still worry about their readiness. Nearly 38% admit they are not prepared for cyber risk, and 28% feel their fraud prevention strategy is inadequate. This suggests a critical gap between ambition and execution.

The Cost of Poor Visibility

According to the D&B Financial Services & Insurance Survey Report, third-party risk (the potential harm that can arise from relying on external vendors, partners, or service providers) is proving costly for U.S. financial services providers. Almost 90% of survey participants report negative impacts from ineffective risk management.

Those consequences include financial loss (49%), security breaches (38%), and reputational damage (35%). U.S. leaders note the average cost per incident is more than $431,000. This cost highlights the need for continuous monitoring and vendor scoring.

Despite the risks, many U.S. insurance companies, financial institutions, and fintechs are relying on unverified data to assess risk. In fact, 51% say they frequently use search engines or AI research tools to get information about third parties, and 40% do this “sometimes.”

Data Quality: The Roadblock to AI Adoption

The promise of AI-driven transformation is clear, but for many U.S. financial services organizations, poor data quality is a major roadblock. While 45% say they can make informed business decisions, many are still struggling with siloed systems, duplicate records, and distrust in internal datasets.

Alarmingly, more than half have experienced failed AI projects because of poor data quality.

These challenges aren’t just technical, they’re strategic. Without trusted and integrated data, efforts to automate processes and deploy AI may amplify bias, regulatory exposure, and reputational harm.

What Are the Strategic Priorities for 2026?

Looking ahead, U.S. leaders are betting on technology. However, the D&B Financial Services & Insurance Pulse Survey reveals that poor data quality and risks posed by lack of information on third parties threaten to undermine their progress.

Internal AI use (39%) and digital transformation (36%) top the list of strategic priorities for 2026. Growth in new markets (34%) and improved decision-making (33%) follow closely behind. Yet these ambitions are shadowed by deep concerns: More than half of U.S. leaders cite cyber risk as their biggest worry for 2026, and 48% point to poor data quality as a critical barrier.

To bridge the gap, U.S. bankers, insurers, and fintechs see the need for external support. Overall, 67% say more accurate data is essential, and 61% call for new technologies to navigate future challenges.

The ambition is clear, but success will depend on bridging the gap between vision and operational readiness.

How Systemic Risk Is Affecting Financial Services Providers

While systemic risk (the risk of a breakdown in a financial system due to the failure of one or more interconnected institutions) has been recognized and documented for decades, what’s changing is the nature and visibility of that risk.

Interconnectedness within the FS&I sector has intensified because of digital transformation, globalization, and complex financial instruments. AI and cyber threats introduce new systemic weaknesses that weren’t as prevalent in earlier decades. Climate risks and geopolitical instability send shockwaves well beyond the sectors or regions where they begin. In addition, regulatory language is more likely to emphasize the need for holistic, cross-sector risk management.

In this environment, financial services organizations without strong data quality, governance, and process automation may jeopardize their resilience, compliance, and customer trust.

How to Mitigate Systemic Risk

The D&B Financial Services & Insurance Pulse Survey report outlines six critical actions that can help insurance companies, bankers, and financial technology providers can take to protect themselves.

1. Improve Third-Party Risk Management: Adopt robust frameworks, automate onboarding, and leverage external data sources for real-time visibility.
2. Invest in Cybersecurity and Fraud Prevention: Prioritize proactive monitoring and advanced analytics to detect threats before they escalate.
3. Strengthen Data Governance: Consolidate siloed datasets, eliminate duplicates, and build unified platforms to support AI readiness.
4. Accelerate Automation Responsibly: Embed intelligence into key processes like risk assessment and customer onboarding to reduce manual errors.
5. Collaborate Internally and Externally: Build cross-functional teams and participate in industry-wide initiatives to tackle systemic risks such as fraud, cybercrime, and climate-related financial exposure.
6. Seek Strategic Partnerships: Collaborate with technology providers, data experts, and consultants to bridge capability gaps and accelerate transformation.

Act Now to Avoid Falling Behind

The threats facing the financial services and insurance sector are accelerating — and so must the response. Without immediate action to improve data quality, automate processes, and strengthen cybersecurity, financial services organizations risk falling behind competitors and exposing themselves to costly threats. The time to close the gap between strategy and execution is now, before resilience becomes impossible to recover.