Transforming Financial Services Procurement with AI: How Predictive Strategies Drive Results

The financial services industry has reached a defining moment. Today’s consumers enjoy faster, more seamless, and highly convenient banking experiences. Emerging technologies like AI and machine learning are driving efficiencies, enhancing fraud detection, and enabling real-time transactions. Traditional banking methods are making way for newer, digital-first solutions and innovative payment methods.

At the same time, regulatory complexity, rising cybersecurity threats, and economic uncertainty are creating other hurdles. Two-thirds (65%) of financial institutions (FIs) globally experienced ransomware attacks in 2024, a steep increase from 34% in 2021. New global capital standards like Basel III Endgame are forcing banks to hold more capital and charge more for certain loans. Meanwhile, inflationary pressures and fluctuating interest rates are challenging profitability and lending operations.

This climate creates a clear divide between FIs, marking those that will thrive in the future of banking — and those that will be left behind.

To navigate these challenges, FI procurement teams must usher in a swift evolution. Now is the time to move beyond conventional approaches and instead embrace innovative strategies that bolster business continuity, reduce risk, and increase agility.

Defining Financial Services Procurement

Financial services procurement is the sourcing and managing of goods and services essential to operations. Though procurement teams in other industries typically deal with physical goods, procurement professionals in financial services focus on intangible assets like software, compliance platforms, legal consultants, and more.

Due to the highly regulated nature of financial services, procurement teams are under intense pressure to be incredibly precise. Even the smallest mistake could lead to devastating consequences, including financial losses, regulatory violations, and loss of consumer trust.

Procurement teams play a vital role in helping FIs maintain their competitive advantage, supporting organizations as they seek to control costs, navigate compliance standards, increase operational efficiency, and foster ongoing innovation. They strategically manage vendor relationships, ensuring third-party compliance, strong supplier relationships, and long-term organizational alignment.

Top Challenges in Financial Services Procurement

Procurement professionals in financial services face unique challenges stemming from regulatory complexity, pressure to digitally transform, and ever-heightening data security risks. Here are a few of the top industry issues for 2025:

• Regulatory Complexity: Global and federal standards for FIs are ever-evolving, creating a level of regulatory challenges and requirements unmatched by almost any industry. From the California Consumer Privacy Act (CCPA) to anti-money laundering (AML) and know-your-customer (KYC) rules, procurement professionals in this space must navigate intricate frameworks with robust documentation and reporting systems.
• Digital Transformation: Just 30% of banks have successfully completed digital transformation projects, and the majority say they’ve fallen short of their original goals. These dismal statistics highlight the complexity of the undertaking, with many organizations facing business silos, high technical debt, and misaligned priorities. To succeed, procurement processes must seamlessly adapt to these new demands while managing associated costs. Gartner® states, “AI technologies can optimize and accelerate activities necessary for digital innovation and transformation.”
• Data Security Risks: Cloud-based banking solutions offer better customer experiences, but they also increase data security concerns. The average cost of a data breach in the financial services industry climbed to $6.08 million in 2024, yet only 31% of FIs are confident in their ability to meet modern cybersecurity needs. Procurement teams must rise to the challenge by investing in compliant systems that protect sensitive financial data and bolster consumer trust.
• Transparency Requirements: After the 31% of FIs in 2023, the demand for bank transparency is more critical than ever. Though research shows that transparency and accountability in banking promote economic growth, more than one-third of consumers say they distrust FIs’ existing policies and regulations. Procurement teams face extreme challenges in these areas, with enhanced public and stakeholder scrutiny driving the need for more transparent supply chain management.
• Cost Pressures: Cost cutting was a top priority for procurement executives across all industries in 2024, and the trend will continue for FIs into 2025. Rising costs from regulatory compliance, digitization, and cybersecurity only add to the challenge, requiring procurement teams to simultaneously manage expenses and adapt to dynamic market conditions.

Achieving Agility and Efficiency with Predictive Procurement

Traditional procurement methods rely on manual, paper-based processes that cause inevitable bottlenecks, siloed decision-making, and limited agility. In an era of fast-paced change, this “design-bid-build” strategy is no longer effective, demanding a modern, data-driven approach. Predictive procurement offers a transformative alternative for financial services, empowering teams with advanced data insights, shorter cycle times, and automated outcomes.

By embracing predictive procurement, financial institutions can:

• Achieve unparalleled cost savings
• Enhance supplier relationships through informed decisions
• Improve compliance and mitigate risks

When time and resources are limited, predictive procurement allows teams to create strategies faster across more areas of spend, while integrating with systems to execute automated outcomes. 

Arkestro and the Future of Procurement for Financial Services

Arkestro isn’t just another procurement system — it’s a game-changing predictive procurement platform that redefines how sourcing decisions are made. By leveraging game theory, behavioral science, and AI-driven insights, Arkestro predicts optimal pricing and automates negotiations to deliver market-efficient outcomes.

Here’s how Arkestro creates value for financial services procurement:

Speed

Arkestro accelerates sourcing cycles from weeks to hours. In fact, 75% of customers report a 60% reduction in sourcing time, with projects completed in as little as 48 hours. This agility ensures financial institutions can respond swiftly to market demands.

Scale

Within 45 days, Arkestro customers realize an average of 18.8% savings on every $1M of spend. By scaling predictive negotiations across thousands of suppliers and billions in spend, Arkestro drives sustainable and measurable cost advantages.

Time to Value

Arkestro delivers rapid ROI, with customers achieving savings within two weeks and a measurable ROI within 45 days or less. Over the past year, clients have managed 3x more spend with the same resources.

The Paradigm Shift

Arkestro transforms supplier-buyer interactions through predictive pricing, game theory, and automated feedback mechanisms. This approach ensures market-efficient pricing, delivering millions in savings at a rate far quicker than traditional procurement methods.

With Arkestro, financial institutions can:

• Optimize procurement processes for efficiency and cost savings
• Strengthen supplier relationships through transparent and informed negotiations
• Gain a competitive edge by turning procurement into a strategic function

Former CPO and Arkestro Executive Advisor, Jack Miles, says,” Arkestro redefines procurement by making it predictive, proactive, and results-driven. Financial services organizations rely on Arkestro to achieve strategic sourcing goals, increase productivity and spend under management, all while delivering measurable value faster than traditional tools ever could. This is the future of procurement—and it’s happening today with Arkestro.”

Transform Your Procurement Potential with Arkestro

The future of procurement in financial services lies in predictive, data-driven strategies, backed by the power of AI. Arkestro accelerates enterprise spend transformation, unlocking trapped savings and reducing risk, enabling teams to influence significantly more spend. By adopting Arkestro, financial institutions can set a new standard for procurement excellence, driving significant savings, operational efficiency, and enhanced compliance.

Ready to see how Arkestro customers are using Predictive Procurement to achieve immediate impact? Let’s talk. Get in touch with us today to request a custom demo and learn how to amplify procurement’s influence.