S&P: Bank AI Adoption to Shape Credit Ratings; Laggards Face Pressure

S&P Global Ratings said on Monday that banks' pace of AI adoption and governance maturity will increasingly influence their credit ratings, warning that institutions falling behind could face added pressure from rating agencies. In a report published Sept. 21, S&P said uneven AI deployment, governance frameworks and operational readiness will "increasingly drive improvements or deterioration in financial institutions' credit quality." A June survey of 179 financial institutions found respondents expect AI-driven cost reductions of 4% this year, rising to 6% to 8% by 2028. About 84% of respondents use AI in support functions and automation, but fewer than a third apply it to new products and services, citing regulatory limits and reputational risk. Miriam Fernandez, S&P's head of AI research and applications, said net credit outcomes will largely depend on whether firms convert cost efficiency and incremental revenue into sustainable profitability gains while maintaining sound risk management.