The Year AI Matured

The AI landscape in 2025 didn’t just shift; it matured.

To state it simply, we moved from the Wow phase to the How phase.

For those of us in Data & AI, particularly in Banking, Financial Services, and the Public Sector, this was the year the playground closed, and the real work began.

We saw the collision of massive infrastructure investments with energy realities, the rise of reasoning over simple generation, and a fractured regulatory map that demands our attention.

But before we look at the road ahead, I want to take a moment to look back.

A Personal Note of Gratitude to the mentors who challenged my thinking, the colleagues who grinded through the complexities of AI and to you, my network, for every comment, DM, and debate - Thank you.

Your insights have been the fuel for my own growth this year.

Now, let’s look at how the developments of 2025 set the stage for 2026.

1. The Thinking Shift

2025 wasn’t about chatbots; it was about models that reason. With the mainstream adoption of advanced reasoning models, we moved beyond next-token prediction to structured planning.

• BFSI & Gov Angle

  This is the holy grail for Fraud & Risk. We aren’t just flagging anomalies anymore; we are simulating complex fraud scenarios and policy outcomes with logic-based chains.

• My Take for 2026

  Efficiency is great, but accuracy is currency. In 2026, expect these models to be integrated with solid domain expertise from established players (not just models) into core banking systems, driving significant productivity gains in back-office operations.

2. The Hands

We were promised autonomous employees. We got really good assistants. Agentic AI moved from hype to early deployment, but it fell short of fully transforming workflows.

• BFSI & Gov Angle
  We are seeing value in specific, high-friction areas - automating compliance checks, transaction processing, and permit management.

• My Take for 2026
  The Year of the Agent was overstated in ‘25. According to me, 2026 is the year of not just Agents, but Reliable ones. We can expect to see a shift toward hybrid Human/AI teams where agents handle the boring work, and humans handle the judgment & decisions.

3. The Market

China’s DeepSeek R1 challenged the US monopoly, proving that high-performance AI doesn’t always need a trillion-dollar moat. Simultaneously, the regulatory landscape split: The US moved toward deregulation, while the EU AI Act began enforcing strict compliance.

• BFSI & Gov Angle
  This, unfortunately, creates a headache for global institutions. You now need a strategy that leverages low-cost open-source models for innovation while navigating a minefield of cross-border compliance (it’s going to be a digital tug-of-war between US speed vs. EU safety).

• My Take for 2026
  We can expect the Supply chain audit to be the new & prominent buzzword. Financial institutions will need to rigorously vet the lineage of their models. Expect Sovereign AI to become a major theme in the Public Sector.

4. The Engine

Hyperscalers spent billions, but enterprises tightened their belts. The build it and they will come era is over. 2025 was defined by a massive infrastructure buildout colliding with energy constraints and a demand for tangible ROI.

• BFSI & Gov Angle
  Banks and Governments can no longer write blank checks for AI pilots. Every project must show value.

• My Take for 2026
  Sustainability becomes a procurement mandate. Green AI isn’t just PR; it’s an operational necessity. If your model burns too much cash (or carbon) without delivering ROI, it gets a knock on its head and gets out of the way.

5. The Shield

As models got smarter, so did the threats. Deepfakes and adversarial attacks spiked in 2025, making AI TRiSM (Trust, Risk, and Security Management) the most critical acronym of the year.

• BFSI & Gov Angle
  Trust is our only product. Whether it’s protecting a depositor’s assets or a citizen’s data, security is non-negotiable.

• My Take for 2026
  Responsibility is and will continue to be table stakes. Leading institutions will differentiate themselves not by how fast they innovate, but by how safely they do it.

Looking ahead, if 2025 was the year of Measured Realism, 2026 will be the year of Industrialised Value.

For leaders in Banking and the Public Sector, the mandate is clear - Stop chasing the hype. Focus on

• Governance

• Build resilient talent, and

• Deploy AI that solves boring, expensive problems.

Here’s to a high-impact, low-hype 2026!

Wish you a very Happy, Healthy, Successful & Prosperous New Year.