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SurgePays Announces Second Quarter 2024 Financial Results

Published

2 years ago

on

$5 Million Share Repurchase Authorized

BARTLETT, Tenn., Aug. 13, 2024 /PRNewswire/ — SurgePays, Inc. (NASDAQ: SURG) (“SurgePays” or the “Company”), a technology and telecom company focused on the underbanked and underserved, today announced its financial results for the second quarter ended June 30, 2024.

Management Commentary

Chairman and CEO Brian Cox commented on the quarter’s results, “The second quarter of 2024 begins a transition phase for SurgePays.  ACP funding has run out and there is no guarantee it will return.  Fortunately, in the first quarter we shored up our balance sheet and began implementing growth initiatives outside of the ACP program to continue to pursue our strategic goal of being one of the country’s largest providers of prepaid wireless and underbanked financial technology services.

“Second quarter sales of $15.1 million were about as expected, but were well below the first quarter 2024 revenues of $31.4 million and the year ago second quarter 2023 revenues of $35.9 million due to the ending of the government’s ACP funding in mid-May, which we knew was coming.  Both the first quarter of 2024 and the second quarter of 2023 had full ACP funding.

“Gross profits in the 2024 second quarter were a loss of ($3.4) million compared to a profit of $10.0 million in the year ago quarter as the original ACP funding ran out mid-quarter. Additionally, we made the strategic decision to have our balance sheet take on the funding to maintain continuity within our subscriber base for three main reasons: 

Congress could renew the ACP program at any time, and if we terminated service, we would have to go out and re-acquire customers from a standing start, which would cost tens of millions of dollars.If Congress delayed or didn’t fund the program, we had plan B to acquire a company with licenses to provide a similar wireless subsidy and offer our subscribers the option to remain on a free monthly plan subsidized by a sister program. This is in conjunction with incentivizing customers to switch to LinkUp Mobile, our non-subsidized prepaid wireless brand. We know how critical broadband service is in everybody’s life, and we believe it was simply the right thing to do. 

“We are in a transition phase and are looking to get back to generating positive free cash flow by the end of this year through the following initiatives:

Continue to grow our ACP revenue stream should Congress begin funding it again.Offer our ACP subscriber base a free monthly service plan utilizing the Lifeline program while enticing customers with a cost-saving LinkUp Mobile prepaid wireless plan.Scaling up our third-party wholesale transactions for other prepaid wireless company payments at convenience stores. We believe this initiative is necessary because it is a relationship gateway product for LinkUp Mobile activations and subscriber growth.Expand our offerings outside of wireless.  For instance, we recently launched our ClearLine customer engagement platform for convenience stores at last month’s RetailNOW Conference in Las Vegas.Expand product and service offerings to the same nationwide network of convenience stores we are building by exploring and executing prospective partnering or product distribution opportunities.Identify unique market opportunities that represent potential positive short-term cash flow.

“As we said last quarter, we knew that the ACP funding could run out, and we are not waiting around for Congress to provide additional funding. Many initiatives are underway to expand SurgePays’s footprint among the underbanked and underserved, who remain our key customers. We recognize that the expiration of ACP funding has adversely impacted our business and stock price. Therefore, we feel it’s an opportune time to announce a corporate stock buyback so our long-term investors know our interests are aligned. Until December 31, 2024, we will implement a buyback of up to $5 million (the “Maximum Amount”) of SurgePays common stock in the open market. Repurchases may be made from time to time at management’s discretion. The program will end upon the earlier of 6 months after the commencement of the program or the date upon which the Maximum Amount has been purchased and can be discontinued at any time. No shares have been repurchased under the program to date. There can be no assurance as to the timing or number of shares of any repurchases.”

Second Quarter 2024 Results Conference Call

SurgePays management will host a webcast at 5 p.m. ET / 2 p.m. PT to discuss these results. The live webcast of the call can be accessed on the company’s investor relations website at ir.surgepays.com, or by registering at the following link: Second Quarter Financial Results Call. 

Telephone access to the call will be available at 877-545-0320 (in the U.S.) or by dialing 973-528-0002 (outside the U.S.). Participant access code is 650138.

A telephone replay will be available approximately one hour following completion of the call until August 27, 2024. To access the replay, please dial 877-481-4010 (in the U.S.) or 919-882-2331 (outside the U.S.). Replay passcode is 51057.

Share Repurchase Authorization

As indicated above, SurgePays’s board of directors has authorized the company to repurchase up to $5 million of common stock through the open market until December 31, 2024.

About SurgePays, Inc.

SurgePays, Inc. is a technology and telecom company focused on the underbanked and underserved communities. SurgePays’ technology-layered platform empowers clerks at over 8,000 convenience stores to provide a suite of prepaid wireless and financial products to underbanked customers. SurgePays prepaid wireless companies provide services to over 250,000 low-income subscribers nationwide. The company ranks as the 345th fastest-growing tech company in North America according to the 2023 Deloitte Technology Fast 500. Please visit SurgePays.com for more information.

Cautionary Note Regarding Forward-Looking Statements

This press release includes express or implied statements that are not historical facts and are considered forward-looking within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. Forward-looking statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance and may contain projections of our future results of operations or of our financial information or state other forward-looking information. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” “attempting,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words.

Although we believe that the expectations reflected in these forward-looking statements such as regarding our market potential along with the statements under the heading Management Commentary are reasonable, these statements relate to future events or our future operational or financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements including but not limited to, our plans to expand our prepaid wireless company and the stock buyback program,  our ability to retain our subscribers on a free monthly plan subsidized by a sister program, our ability to obtain a company that has the license to subsidize our subscribers through a sister program and our expanded service and offerings. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control, including, without limitation, whether the ACP is funded again, our ability to obtain a company that has the license to subsidize our subscribers through a sister program, statements about our future financial performance, including our revenue, cash flows, costs of revenue and operating expenses; our anticipated growth; and our predictions about our industry. The forward-looking statements contained in this release are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission (“SEC”), including in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. The forward-looking statements in this press release speak only as of the date on which the statements are made. We undertake no obligation to update, and expressly disclaim the obligation to update, any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.

 SurgePays, Inc. and Subsidiaries

Consolidated Balance Sheets

30-Jun-24

31-Dec-23

(Unaudited)

Assets

Current Assets

Cash

$

38,434,580

$

14,622,060

Accounts receivable – net

1,412,177

9,536,074

Inventory

8,363,434

9,046,594

Prepaids and other

507,927

161,933

Total Current Assets

48,718,118

33,366,661

Property and equipment – net

221,075

361,841

Other Assets

Note receivable

176,851

176,851

Intangibles – net

1,799,716

2,126,470

Internal use software development costs – net

428,010

539,424

Goodwill

4,166,782

1,666,782

Investment in CenterCom

498,273

464,409

Operating lease – right of use asset – net

396,475

387,869

Deferred income taxes – net

–

2,835,000

Total Other Assets

7,466,107

8,196,805

Total Assets

$

56,405,300

$

41,925,307

Liabilities and Stockholders’ Equity

Current Liabilities

Accounts payable and accrued expenses

$

4,297,557

$

6,439,120

Accounts payable and accrued expenses – related party

499,853

1,048,224

Accrued income taxes payable

100,000

570,000

Deferred revenue

–

20,000

Operating lease liability

96,332

43,137

Note payable – related party

1,606,654

4,584,563

Total Current Liabilities

6,600,396

12,705,044

Long Term Liabilities

Note payable – related party

2,730,796

–

Notes payable – SBA government

474,758

460,523

Operating lease liability

317,470

356,276

Total Long Term Liabilities

3,523,024

816,799

Total Liabilities

10,123,420

13,521,843

Stockholders’ Equity

Common stock, $0.001 par value, 500,000,000 shares authorized 19,431,549 and 14,403,261 shares issued and outstanding, respectively

19,435

14,404

Additional paid-in capital

72,967,169

43,421,019

Accumulated deficit

(26,827,373

(15,186,203

Stockholders’ equity

46,159,231

28,249,220

Non-controlling interest

122,649

154,244

Total Stockholders’ Equity

46,281,880

28,403,464

Total Liabilities and Stockholders’ Equity

$

56,405,300

$

41,925,307

 

SurgePays, Inc. and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

For the Three Months Ended June 30,

For the Six Months Ended June 30,

2024

2023

2024

2023

Revenues

$

15,085,699

$

35,886,433

$

46,514,834

$

70,662,876

Costs and expenses

Cost of revenues

18,528,774

25,860,705

41,775,243

52,942,665

General and administrative expenses

7,432,978

3,823,227

13,863,783

6,812,648

Total costs and expenses

25,961,752

29,683,932

55,639,026

59,755,313

Income (loss) from operations

(10,876,053)

6,202,501

(9,124,192)

10,907,563

Other income (expense)

Interest expense

(116,722)

(156,267)

(249,305)

(348,593

Other income

636,868

–

636,868

–

Gain on investment in CenterCom

17,711

10,713

33,864

43,742

Total other income (expense) – net

537,857

(145,554)

421,427

(304,851

Net income (loss) before provision for income taxes

(10,338,196)

6,056,947

(8,702,765)

10,602,712

Provision for income tax benefit (expense)

(2,547,000)

–

(2,970,000)

–

Net income (loss) including non-controlling interest

(12,885,196)

6,056,947

(11,672,765)

10,602,712

Non-controlling interest

(19,431)

90,955

(31,595)

90,379

Net income (loss) available to common stockholders

$

(12,865,765)

$

5,965,992

$

(11,641,170)

$

10,512,333

Earnings per share – attributable to common stockholders

Basic

$

(0.66)

$

0.42

$

(0.63)

$

0.74

Diluted

$

(0.66)

$

0.4

$

(0.63)

$

0.71

Weighted average number of shares outstanding – attributable to common stockholders

Basic

19,431,549

14,191,083

18,562,416

14,154,163

Diluted

19,431,549

15,076,466

18,562,416

14,811,785

The accompanying notes are an integral part of these unaudited consolidated financial statements

 

SurgePays, Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity

For the Three and Six Months Ended June 30, 2024

(Unaudited)

Common Stock

Additional

Accumulated

Non-Controlling

Total

Paid-in

Stockholders’

Shares

Amount

Capital

Deficit

Interest

Equity

December 31, 2023

14,403,261

$

14,404

$

43,421,019

$

(15,186,203)

$

154,244

$

28,403,464

Stock issued for cash

3,080,356

3,081

17,246,913

–

–

17,249,994

Cash paid as direct offering costs

–

–

(1,395,000)

–

–

(1,395,000

Exercise of warrants – cash

1,860,308

1,861

8,797,396

–

–

8,799,257

Exercise of warrants – cashless

40,238

41

(41)

–

–

–

Stock issued for services

47,386

48

411,692

–

–

411,740

Recognition of stock based compensation – unvested shares – related parties

–

–

1,497,417

–

–

1,497,417

Recognition of stock-based compensation – related party

–

–

6,196

–

–

6,196

Non-controlling interest

–

–

–

–

(12,164)

(12,164

Net income

–

–

–

1,224,595

–

1,224,595

March 31, 2024

19,431,549

19,435

69,985,592

(13,961,608)

142,080

56,185,499

Recognition of stock based compensation – unvested shares – related parties

–

–

2,981,577

–

–

2,981,577

Non-controlling interest

–

–

–

–

(19,431)

(19,431

Net loss

–

–

–

(12,865,765)

–

(12,865,765

June 30, 2024

19,431,549

$

19,435

$

72,967,169

$

(26,827,373)

$

122,649

$

46,281,880

SurgePays, Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity

For the Three and Six Months Ended June 30, 2023

(Unaudited)

Common Stock

Additional

Accumulated

Non-Controlling

Total

Paid-in

Stockholders’

Shares

Amount

Capital

Deficit

Interest

Equity

December 31, 2022

14,116,832

$

14,117

$

40,780,707

$

(35,804,106)

$

127,535

$

5,118,253

Stock issued for services

60,082

60

307,398

–

–

307,458

Recognition of stock based compensation – stock options

–

–

9,294

–

–

9,294

Non-controlling interest

–

–

–

–

(576)

(576

Net income

–

–

–

4,546,341

–

4,546,341

March 31, 2023

14,176,914

14,177

41,097,399

(31,257,765)

126,959

9,980,770

Stock issued for services

64,927

65

311,121

–

–

311,186

Recognition of stock based compensation – stock options

–

–

9,294

–

–

9,294

Exercise of warrants for cash

43,814

44

207,196

–

–

207,240

Non-controlling interest

–

–

–

–

90,955

90,955

Net income

–

–

–

5,965,992

–

5,965,992

June 30, 2023

14,285,655

$

14,286

$

41,625,010

$

(25,291,773)

$

217,914

$

16,565,437

 

SurgePays, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

For the Six Months Ended June 30,

2024

2023

Operating activities

Net income (loss) – including non-controlling interest

$

(11,672,765)

$

10,602,712

Adjustments to reconcile net income (loss) to net cash provided by (used in) operations

Depreciation and amortization

467,520

467,519

Amortization of right-of-use assets

46,995

21,494

Amortization of internal use software development costs

111,414

64,530

Stock issued for services

411,740

618,644

Recognition of stock based compensation – unvested shares – related parties

4,478,994

–

Recognition of share based compensation – options – related party

6,196

18,588

Interest expense adjustment – SBA loans

19,750

–

Right-of-use asset lease payment adjustment true up

(97,346)

–

Gain on equity method investment – CenterCom

(33,864)

(43,742

Changes in operating assets and liabilities

(Increase) decrease in

Accounts receivable

8,123,897

(1,059,014

Inventory

683,160

(6,900,674

Prepaids and other

(345,994)

(56,131

Deferred income taxes – net

2,835,000

–

Increase (decrease) in

Accounts payable and accrued expenses

(4,641,563)

(1,351,218

Accounts payable and accrued expenses – related party

(49,380)

(270,665

Accrued income taxes payable

(470,000)

–

Installment sale liability – net

–

(1,668,744

Deferred revenue

(20,000)

(199,910

Operating lease liability

56,134

(19,329

Net cash provided by (used in) operating activities

(90,112)

224,060

Investing activities

Capitalized internal use software development costs

–

(281,304

Net cash used in investing activities

–

(281,304

Financing activities

Proceeds from stock issued for cash

17,249,994

–

Proceeds from exercise of common stock warrants

8,799,257

207,240

Cash paid as direct offering costs

(1,395,000)

–

Repayments of loans – related party

(746,104)

(467,385

Repayments on notes payable

–

(1,520,954

Repayments on notes payable – SBA government

(5,515)

(9,213

Net cash provided (used in) by financing activities

23,902,632

(1,790,312

Net increase (decrease) in cash

23,812,520

(1,847,556

Cash – beginning of period

14,622,060

7,035,654

Cash – end of period

$

38,434,580

$

5,188,098

Supplemental disclosure of cash flow information

Cash paid for interest

$

259,765

$

209,840

Cash paid for income tax

$

–

$

–

Supplemental disclosure of non-cash investing and financing activities

Reclassification of accrued interest – related party to note payable – related party

$

498,991

$

–

Exercise of warrants – cashless

$

41

$

–

Right-of-use asset obtained in exchange for new operating lease liability

$

98,638

$

–

Goodwill (ClearLine Mobile, Inc.)

$

2,500,000

$

–

The accompanying notes are an integral part of these unaudited consolidated financial statements

 

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SOURCE SurgePays

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SEMIFIVE Secures KRW 178.4 Billion in Q3 New Orders, Up 437% YoY, Driving Order Backlog to Record High

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10 minutes ago

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November 13, 2026

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Achieves 182% QoQ growth in new orders, pushing order backlog to an all-time high of KRW 245.5 billion Drives ASIC Service new orders to KRW 136.9 billion, up 705% YoY, fueled by global turnkey projects in North America Diversifies its advanced-node AI mass production portfolio, strengthening the foundation for long-term growth

SEOUL, South Korea, Nov. 13, 2026 /PRNewswire/ — SEMIFIVE, a leading global provider of custom AI semiconductor (ASIC) solutions, today announced record-breaking order performance for the third quarter of 2026, securing KRW 178.4 billion in new orders and driving its order backlog to an all-time high of KRW 245.5 billion on a consolidated basis.

SEMIFIVE achieved a remarkable 437% year-over-year (YoY) surge in third-quarter new orders, up from KRW 33.2 billion in the same period last year. The quarterly total was approximately 2.8 times the KRW 63.3 billion recorded in the previous quarter, representing a 182% quarter-over-quarter (QoQ) increase, and 1.5 times the company’s total new orders of KRW 118.9 billion for the first half of 2026. Capitalizing on surging global demand for custom ASIC solutions, SEMIFIVE accelerated its expansion into key international markets, including North America and Japan, fueling exceptional order growth.

The company pushed its order backlog to a record KRW 245.5 billion, a 75% increase from KRW 140.3 billion in the previous quarter. As these orders progressively convert into revenue, the expanding backlog is expected to serve as a powerful engine for sustained mid- to long-term growth.

SEMIFIVE generated order growth across all business segments, including ASIC development, mass production, and intellectual property (IP), with its ASIC Service business spearheading overall performance.

SEMIFIVE drove strong growth in its ASIC Service business by securing high-margin advanced-node turnkey projects. Third-quarter new orders in this segment soared 705% YoY to KRW 136.9 billion, compared with KRW 17.0 billion in the same period last year. A major high-performance computing (HPC) project win in North America reinforced the company’s position as a trusted provider of advanced-node turnkey solutions for large global customers. SEMIFIVE has also gained strong traction in the sovereign AI markets of South Korea and Japan, delivering tangible revenue growth.

SEMIFIVE leveraged the maturity of the 4nm process and its proven mass production track record to sharpen its competitive edge. As demand accelerates for AI inference chips built on the cost-effective, high-performance 4nm process, the company is actively capturing new opportunities through its established 4nm design and mass production capabilities.

In mass production, SEMIFIVE continued to secure a steady flow of purchase orders (POs) while accelerating the diversification and advancement of its product portfolio. The company is shifting its portfolio from smaller chips built on legacy process nodes for domestic customers toward advanced-node AI devices and dedicated AI HPC chips. Backed by exclusive mask production rights, stable shipments and an expanding AI mass production portfolio are expected to drive revenue growth beginning in 2027.

SEMIFIVE sustained steady growth in its IP business by securing additional orders for its off-the-shelf, silicon-validated IP offerings. The company supplies silicon-validated IP, originally developed for specific customers, to additional customers, maximizing the value of its proven IP assets. SEMIFIVE is also expanding into leading-edge 2nm and 3nm process technologies and HPC applications. By strengthening its IP portfolio based on Samsung Foundry’s 2nm and 3nm processes, the company aims to unlock additional order opportunities in the high-performance AI semiconductor market.

For the first nine months of 2026, SEMIFIVE recorded cumulative revenue of KRW 146.1 billion, up 62% YoY. Notably, as shipments of high-value AI chips gained momentum, product revenue surged 167% QoQ to KRW 12 billion, up from KRW 4.5 billion in the previous quarter, marking the beginning of a new growth phase. The company also continued to improve profitability, achieving a cumulative gross profit margin of 28%, up 11 percentage points YoY, and improving its operating margin to -14%, up 25 percentage points YoY. Looking ahead, SEMIFIVE expects to accelerate its financial performance in the fourth quarter as its KRW 245.5 billion order backlog begins converting into revenue at a faster pace, supported by increasing mass production volumes.

“Our latest performance proves that SEMIFIVE has entered a new phase of accelerated growth in the global AI ASIC market,” said Brandon Cho, CEO and Co-Founder of SEMIFIVE. “With our record-high order backlog and high-value mass production pipeline serving as powerful turbo engines, we are poised to further accelerate our growth.”

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SOURCE SEMIFIVE

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DomoAI Launches InkoAI Agent – One Sentence to Ready-to-Post Video

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10 minutes ago

on

November 13, 2026

By

SINGAPORE, Nov. 13, 2026 /PRNewswire/ — DomoAI, the AI video platform used by more than 5 million creators, today announced InkoAI Agent, a creative assistant that runs the entire image and video workflow in one conversation, from a single sentence to ready-to-post content, with creators in control of every step.

One AI Video Agent, the Whole Workflow

Making an AI video usually means switching tools, rewriting prompts and re-uploading files to fix one detail. InkoAI Agent can:

Turn a one-line idea into a finished image or clip for TikTok, YouTube Shorts or Instagram Reels, writing the prompt and setting format and lengthLaunch DomoAI Skills in one click, including Short Drama, Anime Video, Cartoon Style and General Story, to take one idea to a finished video with dialogue or narration, approving the script, characters and shots along the wayShow what it will generate and wait for approval, so nothing runs without the creator’s say-soWork across 15 image and video models, including leading models such as GPT Image 2.5, Nano Banana Pro, Seedance 2.5 and MiniMax H3, alongside DomoAI 2.5Read text, images, documents and library videos, from character sheets and product photos to scripts and storyboardsRemember every result in the chat, so creators can redraw, vary or animate any earlier image without re-uploading it

Built for AI-Native Creators

Microdrama and anime video creators: take a story from script to finished episode instead of chaining separate tools.Short-form video creators: keep a daily posting schedule without learning to write prompts.Original character (OC) creators: tweak an outfit or expression without starting over, then animate the character.Brand and performance marketers: turn one product photo into UGC-style ads and test-ready variations, without a shoot.

DomoAI plans to keep expanding InkoAI Agent, adding Skills for video ads from a product link or photo, tutorials and AI music videos, along with more creation capabilities. InkoAI Agent is available today at domoai.app/agent.

About DomoAI

Founded in 2023 and headquartered in Singapore, DomoAI is an AI image and video creation platform used by more than 5 million creators worldwide. Learn more at domoai.app. All third-party trademarks are the property of their respective owners.

Media Contact
Penny
DomoAI
penny@domoai.app 

 

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SOURCE DOMOAI PTE. LTD.

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Operationalizing AI Governance Gives Banks an Advantage in Scaling AI

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11 minutes ago

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November 13, 2026

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Most Banks Permit AI Agents in Production for Select Use Cases, but Adoption Is Limited and Only 8% Have Comprehensive ControlsNearly Half Reported an AI-Related Issue or Incident in the Past 12 MonthsMost Have Governance Foundations in Place, but Day-to-Day Controls LagBanks with More Mature Risk Management Are 2.5 Times More Likely to Be Advanced AI Adopters

BOSTON, Nov. 13, 2026 /PRNewswire/ — AI agents are entering production at most major banks, but few have a comprehensive framework to monitor and control them. A new Boston Consulting Group (BCG) benchmark of 26 global and domestic systemically important banks finds that agentic AI has reached production at most banks, but usage remains limited, and agent-specific monitoring and control capabilities are still being built out. Seventy-three percent of banks permit agents in production for select use cases. However, at 88% of banks, agents make up 10% or less of the AI portfolio, and only 8% have a comprehensive, standardized monitoring and control framework that explicitly covers agents.

These are among the findings of AI Safety and Governance in Banking 2026: Why Operationalizing Governance Gives Banks an Advantage in Scaling AI. The benchmark examines how prepared the banks are to govern AI as it becomes more autonomous, assessing their AI adoption and the maturity of their AI risk management. It also finds that banks that have their governance right are better at scaling, challenging the assumption that governance and speed are a tradeoff.

“Agentic AI has arrived, but most banks are cautious in scaling aggressively, as they are lacking the controls and especially the monitoring capabilities for increasingly autonomous agents,” says Anne Kleppe, BCG’s global lead for AI safety and governance, and coauthor of the report. “As AI scales and becomes more autonomous, the next challenge is clear: turning governance from a framework into an operating capability. With agents still a small share of AI portfolios at most banks, there is a window to get that right before their use expands.”

Scaling AI Agents Safely Will Require Monitoring Capabilities That Few Banks Have Fully Built

Agentic AI systems can plan and execute multistep tasks, take actions, and adjust their approach without requiring human input at every step. Banks are only beginning to develop the controls needed to manage these systems.

Limited Deployment. Ninety-two percent of banks are piloting or permitting agentic AI, and 73% permit agents in production for select use cases. None permit broad production use, and at 88% of banks, agents make up 10% or less of the AI portfolio.Restrictions to Manage Risk. Fifty-four percent have defined restrictions or prohibitions on agentic AI in their risk-appetite frameworks. Only 8% have a comprehensive, standardized monitoring and control framework that explicitly covers agents.

Most banks do not yet have the capabilities to monitor and control agents comprehensively, and more than half are relying on restrictions and prohibitions to manage the risks in the meantime. Moving beyond the deployment of select use cases will require banks to build frameworks and technical capabilities to monitor and control agents in a standardized and scalable way.

Nearly half of banks (46%) reported an AI-related issue or incident in the past 12 months, while more than a quarter said AI systems were falling behind their promised business case. These findings show that AI risk is already here, and its downside can include lost value in addition to major risk events.

Governance Foundations Are Largely in Place, but Day-to-Day Control Lags

Most banks have put the basic structures of AI governance in place. Almost all (96%) manage AI risk through their existing risk frameworks, 73% have defined their appetite for AI risk (up from 57% in 2025), and 77% have a dedicated AI policy. But translating those policies into operational controls remains a challenge. Fewer than half of the banks have a centralized, tool-based AI inventory, and none have a comprehensive human-oversight framework that is consistently implemented across AI systems.

Governance and Speed Do Not Have to Be a Tradeoff

BCG’s research challenges the assumption that stronger AI governance slows banks down: banks with more mature risk management are 2.5 times more likely to be advanced AI adopters. For example, banks that use standardized, previously approved patterns for lower-risk AI applications are nearly twice as likely to move those applications from idea to production in under six months. By standardizing what repeats, they can reserve deeper review for novel and higher-risk uses.

“Banks have largely built the foundations for governing AI, and the benchmark shows that governance and speed need not be a tradeoff,” says Matteo Coppola, global leader of BCG’s Risk and Compliance practice, and coauthor of the report. “The banks that are applying governance best in day-to-day operations are the ones scaling AI most extensively. The task now is to extend that discipline to agents before they become more deeply embedded.”

Download the publication here:

https://www.bcg.com/publications/2026/ai-governance-banking-benchmark

Media Contact:
Bruce Wraight
wraight.bruce@bcg.com 

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SOURCE Boston Consulting Group (BCG)

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