KAMPALA, July 21, 2026 — Backbase, a leader in AI-powered banking, in partnership with African Banker magazine, has published The State of AI in African Banking 2026: The Reality of Banking in the Agentic Era.
The report, the first systematic assessment of the return on investment [ROI] of artificial intelligence [AI] in African banking, finds that the continent’s banking sector remains firmly committed to AI but is entering a more demanding “accountability phase”, where boards are requiring clear evidence that the technology is delivering financial value.
Based on responses from 277 senior banking executives across 37 African countries, the survey reveals that foreign exchange pressures, rising dollar-denominated cloud costs and stricter data localisation requirements are focusing board attention on one key question: ROI or no AI?
Key findings from the report include:
- AI budgets are increasing across the continent, even among the one-third of institutions that have yet to establish formal ROI measurement frameworks, highlighting an investment drive that is moving faster than the ability to measure returns.
- Banks working with third-party AI providers are more than twice as likely to measure returns compared with those developing AI solutions entirely in-house, with 71.7 percent of institutions using external partners measuring ROI compared with 31 percent of those relying solely on internal development. The report refers to this gap as the “partner premium”.
- Conversational AI has become the sector’s most common starting point, cited by 49 percent of respondents as a key use case. However, innovators are deploying more advanced financial services applications — including credit, risk and revenue optimisation tools — at a rate 24 percentage points higher than early adopters.
- Legacy technology infrastructure remains the biggest challenge, with 50.2 percent of respondents identifying integration with existing systems as their primary internal obstacle. The report notes that the same limitation affects the quality and consistency of data needed to accurately measure AI returns.
- Institutions with formal ROI measurement are seeing encouraging results, with 85.1 percent reporting that outcomes meet or exceed their initial projections. However, only 67.1 percent of all respondents currently measure AI returns.
The report further indicates that confidence in AI’s future role in African banking remains high, with 86.9 percent of respondents expressing a positive or very positive outlook for AI’s impact over the next two years. In addition, 83.2 percent said they were likely or very likely to increase investment in AI.
Fraud detection and transaction monitoring emerged as the most impactful AI applications, followed by credit scoring and alternative assessment for customers with limited credit histories. The report identifies the latter as a significant opportunity to expand access to formal financial services among Sub-Saharan Africa’s unbanked population.
However, the report cautions that outdated technology systems are limiting the sector’s ability to fully realise AI’s potential. On average, 55.7 cents of every dollar spent on information technology [IT] by African banks is allocated to maintaining legacy systems. This comes despite nearly half of respondents rating these same systems as highly or fully capable of supporting AI — a contradiction the report highlights as a potential blind spot as banks transition towards autonomous, agentic AI systems.
Commenting on the findings, Aymen Daoud, Regional Vice President Africa at Backbase, said: “African banks don’t have an AI problem; they have an architecture problem. The institutions that treat integration as the foundation to fix before scaling AI agents will spend less, comply more easily, and be the ones still standing when the current generation of models is inevitably replaced by the next.”
https://thecooperator.news/banking-sector-remains-resilient-despite-weak-economic-growth/
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