AI bets could reshape costs and competition for Aussie banks

Customers are likely to positively view 24-hour support and shorter waiting times.

Artificial intelligence (AI) may be complicated, costly, and risky, but for Australian banks, upsides related to savings and services may be too compelling to ignore, said S&P Global Ratings.

“AI-backed systems can provide custom services to retail clients and improve fraud detection. AI will also automate complex tasks, reducing headcount. We believe these savings will prove credit positive,” the ratings agency said in a commentary published on 29 April 2026.

AI will allow banks to provide 24-hour support to retail customers, as well as minimise wait times, said Nico de Lange, credit analyst at S&P Global Ratings.

“Banks that use AI most aggressively may gain a significant competitive edge, particularly for their retail franchise,” de Lange said.

Australian customers will likely positively view technology offering shorter waiting times and all-day support.

“Conversely, banks that trail on AI may lose clients and opportunities to cut costs. We believe this will ultimately translate into competitive pressures, diminished margins and a deterioration in their credit standing,” de Lange said.

The major and midsize Australian banks hold a distinct advantage over their smaller peers due to their early adoption of AI.

In a survey of 15 Australian banks, S&P found that early adoption of AI presents significant first-mover advantages.

However, initial successes are often found in internal efficiency gains rather than in an improved customer experience, it added.

Australian banks are currently at an intermediate stage in their AI adoption, with lenders having integrated AI into key business areas. Several projects are now transitioning from testing to deployment.

Challenges include fragmented IT systems, difficulty in attracting and retaining skilled AI talent, and addressing security and privacy concerns related to data usage, the report said.