New research reveals FIs struggling to discern shaky bets from value-driving innovation

Volatility, intensifying competition and pressure to operationalize AI are reshaping how banks and fintechs innovate. For FIs, the challenge is not just to move faster, but to introduce new products, experiences and technologies without increasing regulatory or reputational risk.

To better understand how financial institutions are responding to this tension, Mastercard commissioned Forrester Consulting to study innovation, risk management and AI adoption across multiple industries. The 2026 study, “The experimentation advantage: Research on de-risking innovation,” is based on responses from 324 global directors and above with responsibility for innovation, strategy, data and analytics, marketing or product/portfolio management decisions.

This article explores what the research reveals about banking innovation, and how experimentation helps organizations understand the impact of their initiatives and make market-leading business decisions. 

• 86% of financial institutions struggle to balance innovation and risk: This tension slows decision-making and prevents organizations from acting on new ideas.
• 73% say AI is important for innovation, but only 12% have an advanced innovation strategy that integrates AI: Financial institutions see AI as an opportunity but effective scale remains elusive.
• 78% say small-scale testing helps them accelerate innovation and manage risk: Experimentation and analytics offer a path forward to validate new ideas.

Although competitive pressure is pushing banks and fintechs to evolve, regulatory and reputational risk can create hesitation. The research found that 86% of FIs struggle to balance innovation and risk management, and over a third (37%) experience reputational and regulatory setbacks as a result. 

That balancing act becomes even harder without a reliable way to validate new ideas. If teams lack the tools and processes to test ideas and measure outcomes, they may struggle to distinguish high-potential innovations from costly missteps.

For FIs, that can result in a more cautious approach to innovation: 25% describe their approach to innovation as conservative, while only 6% consider themselves innovation-led. 

When compliance and customer trust are on the line, leaders need evidence that an idea will deliver value before they scale it.

AI is a top priority for financial institutions, with 73% saying it’s critical to innovation success — the highest of any industry surveyed. 

But recognizing AI's potential isn't the same as being ready to deploy it. In fact, 63% of financial institutions say leveraging AI is challenging, and only 12% embed AI into their innovation strategy at an advanced level.

In a highly regulated industry, maintaining trust and compliance is a top priority. Before deploying AI initiatives at scale, financial institutions need confidence that they will perform as intended. 

To get there, FIs need a way to test and validate AI use cases in real-world conditions. Today, many are turning to platforms with advanced modeling and real-world transaction data to address implementation and governance concerns before they arise.

Financial leaders need credible, comparable outcomes to decide which innovation initiatives deserve investment. But many organizations lack measurement frameworks to evaluate how ideas perform across teams and channels.

Measuring ROI remains a major roadblock, with 69% of financial institutions saying it’s their top challenge when acting on innovation priorities. Capability gaps compound the problem: 30% find it very challenging to test and refine initiatives before broader rollout, the highest percentage out of the industries we surveyed. 

Without evidence of ROI, it can be difficult to justify new initiatives to senior leadership. As a result, organizations may delay innovation altogether, or scale promising ideas too slowly due to uncertainty and leave growth opportunities on the table.

Experimentation helps FIs take decisive action in a high-stakes environment. In fact, 78% of them say testing innovation on a small scale before full rollout would help them accelerate innovation while managing risk. 

With a disciplined test-and-learn approach, financial leaders can align on the business outcomes they want to test, conduct those tests more quickly and measure true business impact. In turn, they’re able to identify the highest-value opportunities and determine how to scale most effectively. 

However, experimentation is only as effective as the data and analytics capabilities behind it. Already, 77% of FIs report transformational improvements from applying analytics best practices. This might include integrating data across systems and teams and aligning data insights with business strategy. 

As FIs take these steps, they lay the foundation to effectively measure the impact and ROI of initiatives through experimentation.

Imagine a large financial institution looking to understand the true impact of its innovation initiatives. While the bank has ambitious ideas, it lacks a consistent way to measure performance and determine which efforts to scale.

To validate potential ideas, the bank runs more than 10 structured tests across customer segments and use cases, such as promotional rate adjustments, retention strategies and approval models. 

This approach enables leaders to isolate the true incremental impact of each initiative. In one case, a small boost in promotional rates drove a meaningful lift in integral balances, while a different pilot showed no measurable impact and was discontinued. 

With real-world evidence, the bank can make confident, data-backed investment decisions, focusing resources on strategies that deliver measurable results while avoiding the cost and risk of scaling initiatives that don't.

For financial institutions, innovation can’t outpace accountability. The research shows that leaders are ready to innovate, especially around AI, but struggle to manage risk and prove impact.

In a regulated, high-stakes environment, clear evidence helps propel new ideas forward. With experimentation, financial institutions can test ideas early, validate results and move forward based on data, not assumptions.

To explore the full findings, download The Experimentation Advantage: Research On De‑Risking Innovation, featuring insights from global senior leaders on how structured experimentation and data‑driven best practices help organizations scale innovation with confidence.

Ready to measure, prove and scale banking innovation with confidence? Explore how Mastercard Test & Learn™ can help.