Financial institutions (FIs) are entering 2026 with competing technology priorities, forcing COOs and CISOs across Asia to make increasingly difficult decisions about where to allocate technology spend for maximum value.
Celent’s research, derived from its IT Dimensions survey of over 1,000 executives, projects an average IT budget increase of 7% across the industry for 2026, though this growth varies significantly by sector.
For COOs in Asia, the pressure is twofold: balancing investment in strategic change like AI against the mandatory costs of maintaining legacy infrastructure.
Celent principal analyst, Gareth Lodge, noted that for corporate banks, discretionary spending for innovation is tightening, even as budgets grow overall due to mandatory spend on regulatory compliance and system maintenance. This forces operational leaders to scrutinise every innovation for its direct contribution to profitability and resilience.
The insurance sector is leading the charge in digital transformation, with expected IT budget rises forecasted at 13.8% for life insurance and 12.9% for Property & Casualty (P&C).
Tom Scales, principal analyst at Celent, suggests this surge will lead to “real operational impact” from generative and agentic AI, automation, and real-time risk monitoring.
This trend is vital for Asian insurers looking to modernise legacy systems and improve customer acquisition costs, as highlighted in older Celent analysis that noted the strong growth trajectory in the Asia-Pacific region.
Conversely, capital markets firms, particularly on the buy side, face the tightest constraints, with expected budget rises of only 3.7%.
Cubillas Ding, director of capital markets research at Celent, explains that margin compression and the need to achieve scale remain defining challenges. He expects these firms to pursue parallel initiatives: operationalising AI while simultaneously executing digital and cloud migrations of core systems.
For CISOs, this environment means that every new AI capability introduced—whether for fraud detection or portfolio management—must be governed rigorously. The need to balance innovation with mandatory spend on regulatory compliance (a concern for 20% of FIs globally) means that security investments must clearly translate into measurable risk reduction, not just faster processes.
As Accenture notes for banking in 2026, risk management is becoming strategic, shaping capital allocation, which requires security leaders to speak the language of business value.
The overarching message for Asian financial operations is clear: with budgets under pressure, technology bets must deliver demonstrable strategic value, requiring tight alignment between IT, security, and business objectives.
