Cisco: Banking and finance sector pressured by AI growth and growing network demands

A new global report from Cisco shows that AI is putting the banking and finance sector under increasing pressure. The banking and finance sector is facing a rapid increase in network traffic due to artificial intelligence. Within three years, traffic is expected to more than triple, making modernizing digital infrastructure crucial to meeting the demands of the future of AI.

The banking and finance sector is often highlighted as one of the most prominent industries when it comes to implementing AI. In particular, so-called AI-native players, including neobanks and modern fintech companies, are using artificial intelligence to challenge traditional banks with faster, more automated and innovative financial services.

Despite the high level of innovation, Cisco survey, which includes more than 3,400 IT decision-makers worldwide, found that even the most technology-driven organizations face significant challenges in putting their AI strategies into practice.

Three out of four respondents, corresponding to 75 percent in the banking and finance sector, state that they are concerned that they will not be able to meet customer expectations if they do not modernize their networks and make them ready for the continued development of AI.

Agentic AI and other advanced AI workloads present significant opportunities for businesses to streamline processes, improve customer experiences, and automate complex workflows. At the same time, demands on the underlying network infrastructure are increasing dramatically.

Over the past year, average enterprise network traffic increased by 34 percent. According to Cisco, traffic is expected to double in the coming year and more than triple within the next three years as AI becomes an integrated part of more and more business processes.

For the banking and finance sector, this development poses particular challenges. Low latency, high availability and stable performance are essential for mission-critical services. The survey shows that 42 percent of respondents believe that AI workloads make their operations even more vulnerable to latency and other network disruptions.

This includes algorithmic stock trading, digital payments, real-time fraud monitoring and other services where even very short interruptions or delays can have major consequences. In addition to financial risks, disruptions can affect customer confidence and in some cases lead to businesses not meeting regulatory requirements.

At the same time, 76 percent of respondents believe that the cost of postponing network modernization could be higher than the investment in new infrastructure itself. The results underscore that many organizations view network modernization as a strategic investment rather than a pure IT cost.

Cisco stresses, however, that the way forward is not necessarily about replacing the entire existing infrastructure.

“While the urgency of the issue is clear, the way forward is not necessarily to tear down and rebuild. Instead, a multi-phase modernization is required that focuses on the most critical bottlenecks first. In the financial sector, this challenge is more complex, more regulated and more tangible than in any other industry,” the report authors note.

The increasing use of AI is expected to continue to transform the banking and finance sector in the coming years, making investments in modern, scalable, AI-enabled networks a critical factor for many organizations to meet both customer expectations and future security, performance, and compliance requirements.