Global Data lead analyst, Thematic & Fintech Research, Stephen Walker, Celent Director of Retail Banking & Payments Zil Bareisis, GlobalData banking and payments analyst Blandina Hanna Szalay and RBI editor Douglas Blakey give their banking forecasts for 2026 in this Bankable Insights podcast recording

Forecasts (in alphabetical order by company name)

Lewis Ide, APAC Lead, 10x Banking 

Another landmark year for mergers and acquisitions in APAC 

Across APAC, 2026 will be another landmark year for mergers and acquisitions, driving further momentum behind core transformation as banks seek to unify operations and harness modern platforms. Strategic tech consolidation and migration need to be deeply considered. Is this the opportunity to forge a new path leveraging modern tech, or purely as simplification and migration from one legacy platform to another.

Customer-owned banks driving momentum behind core banking transformation

Customer-owned banks in APAC are set to lead the next wave of core banking reforms, using their mandate to push further into digital-first experiences and rapid product launches. Their appetite for transformation benefits not only members, but sets new benchmarks for agility and personalised service throughout the region. There’s a real need to generate differentiation by through digital transformation; studies have shown that about a fifth of consumers don’t even know the difference between a customer-owned bank and a typical retail bank, so expected customer-owned institutions to focus on fixing this across 2026. 

Extensibility and real-time capabilities will become a key focus for corporate and business banks 

Corporate and business banking in APAC will accelerate the shift to real-time capabilities, whether payments, reconciliation or customer onboarding. Institutions investing in extensible, future-ready core platforms will compete more effectively, keeping pace with regulatory demands and meeting evolving client expectations for speed and transparency.

Amy Nauiokas, Founder, Group CEO and General Partner of Anthemis and Board Member of CommonAI

As we look ahead to 2026, the defining trend will be a shift from simply using AI as a tool, to building the infrastructure and capabilities that allow the UK to lead in its deployment. Over the past year, we’ve seen promising steps toward strengthening AI infrastructure, from the Government’s announcement of new Growth Zones to increased investment in compute, hardware and R&D as part of the Tech Prosperity Deal.

In 2026, the question becomes whether businesses and governments can convert that momentum into real, scalable value. The organisations that win will be those that treat digital infrastructure as seriously as physical infrastructure, embedding the compute capacity, engineering talent and data foundations needed to deploy AI safely and at scale.

We’ll also see a stronger push toward AI sovereignty and homegrown innovation. With AI systems becoming more powerful and more deeply integrated into industry, reliance on a small number of global technology providers is increasingly untenable. In 2026, UK enterprises will look for alternatives that offer more transparency, interoperability and control.

That creates huge opportunities for domestic founders, technologists, academics and early-stage disruptors, whose expertise remains one of the UK’s greatest untapped assets. If we continue to empower those leaders, strengthen regional innovation hubs and pair pro-innovation policy with real investment, the UK can build an AI ecosystem that is competitive, resilient and capable of producing the next generation of globally significant companies.

Daniel Austin, CEO and co-founder, ASK Partners

Real estate opportunities to watch in 2026

The 2025 Autumn Budget offered limited stimulus for the housing market and, persistent headwinds such as sticky inflation, higher for longer interest rates, elevated construction costs, and slow planning processes continue to impact development viability. But there are still reasons for cautious optimism. The UK economy is forecast to grow by 1.4 per cent this year. This is expected to outperform the eurozone and should support investor confidence. The UK also remains an attractive destination for global capital, with ongoing interest from the Gulf, Southeast Asia and deepening UK United States investment links, particularly through the technology sector.

ASK recently surpassed £2bn in total lending. This milestone reflects the importance of disciplined, relationship-led financing and flexible structuring in a challenging market. It also highlights the growing appetite for income-producing real estate debt. With public equity markets at elevated levels and real estate pricing looking comparatively attractive, 2026 is likely to see increasing interest in secured credit strategies that offer predictable cashflows and downside protection.

Looking ahead, several segments of the market offer clear potential for investors.

Prime offices

The flight to quality is expected to continue as businesses compete for modern, energy efficient and amenity rich workspace that supports hybrid working. Best-in-class offices in central London continue to achieve strong rents and stable yields. Although secondary and tertiary offices face challenges linked to obsolescence and environmental compliance costs, some well-located secondary assets are becoming more investable as prime rents rise. Refinancing pressures and selective refurbishment opportunities will provide value-add prospects for well-capitalised investors able to move quickly.

Residential, build-to-rent and co-living

Buyer appetite is expected to soften due to higher taxation, reduced ISA allowances and the absence of stamp duty reform. Despite this slowdown, the UK remains structurally undersupplied in housing. With so many smaller landlords exiting the sector due to increased costs and regulatory complexity, professionally managed rental formats are becoming more important. Build-to-rent and co-living are particularly well positioned to serve younger, mobile workers who seek affordability, connectivity and community. Mid-market suburban and commuter belt schemes may outperform prime central locations, especially in areas benefiting from new infrastructure such as the Lower Thames Crossing.

Storage, logistics and data centres

Storage, logistics and light industrial assets remain among the most resilient parts of the market, supported by the continued expansion of online retail, SME activity and the need for flexible urban distribution space. Alongside these uses, demand for data centres has become a major structural driver. Growing adoption of artificial intelligence, cloud services and high-performance computing is placing unprecedented pressure on power capacity and suitable land, making data centres an increasingly strategic real estate category. The combination of long-term contracted income, critical infrastructure status and limited supply of appropriate sites means this segment is likely to remain strong. Mixed-use industrial schemes that accommodate logistics, data infrastructure and urban services will offer particularly attractive, income-led opportunities in 2026.

Hotels and hospitality

The hotel sector has rebounded strongly, supported by domestic leisure travel, international visitors and the ability to adjust room rates in line with inflation. Conversion opportunities, particularly the transformation of under-utilised office buildings into hotels, are creating new avenues for investors. The asset class continues to appeal to private investors and family offices seeking income diversification and long-term value.

Income producing operational real estate

Operational real estate, including healthcare, specialist care, education and supported living, provides stable and often inflation linked income streams. Demographic shifts, including an ageing population and rising demand for specialist services, support the long-term resilience of these sectors. Although certain subsectors such as life sciences are recalibrating, operational assets backed by strong occupier demand remain attractive.

Conclusion
In 2026 the UK real estate market is likely to offer opportunities grounded in the resilience of the asset class rather than wider economic growth. As interest rates begin to edge lower and transaction pipelines reopen, investors who have been waiting on the sidelines may return. If base rates move toward 3.5% to 3.75%, many schemes that have not been viable in recent years could start to work again. Those who focus on income-producing assets, structure deals carefully and navigate planning challenges with discipline will be best positioned to secure stable returns in a subdued economic environment.

Nick Botha, VP Payments & Retail Banking, AutoRek

Surging transaction volumes will collide with CASS 15 deadlines to create a capacity crunch 

Transaction volumes are surging across payments and e-money firms, and with interest rates declining in the UK, Eurozone and US, this growth will only accelerate over the next 12 months. Yet many firms remain operationally unprepared. Simultaneously, the regulatory landscape is tightening. The FCA’s CASS 15 safeguarding rules come into force in May 2026, demanding a shift from reactive compliance to proactive resilience through continuous reporting and robust data management. As firms juggle operational capacity with regulatory preparation, cracks in internal infrastructures are starting to show. Canada’s safeguarding framework offers a regulatory blueprint, but the critical question is whether firms’ data pipelines and reconciliation operations can withstand both heightened scrutiny and surging volumes simultaneously. 

Early-mover banks will capture stablecoin advantage, while the ill-prepared face operational chaos 

Major US banking institutions are no longer asking if they should integrate stablecoins, but how. The drivers are compelling: faster settlement, streamlined processing and the ability to scale cross-border volumes that strain traditional FX infrastructure. Yet this opportunity creates operational complexity that requires purpose-built reconciliation and compliance frameworks. As we head toward 2026, the gap between early movers and mid-tier banks is widening. The winners will be those who treat risk management, operational integrity and customer safeguards as foundational design principles, not afterthoughts. Without robust data pipelines and reconciliation operations in place, stablecoin integration becomes an operational liability rather than a competitive advantage. 

Jean-Philippe Niedergang, Group CCO / EMEA-PACIFIC-LATAM CEO, Castles Technology

Accessibility will define the winners and losers of retail in 2026

Accessibility will move to the centre of retail strategy in 2026 as the European Accessibility Act reshapes expectations and raises the bar for every merchant. Customers are no longer willing to accept payment journeys that exclude them and the numbers speak for themselves. Billions of people live with visual, motor or hearing impairments and many more face cognitive, language or temporary challenges that affect how they interact with POS systems. When retailers overlook these realities, they lose revenue and long-term loyalty.

The coming year will push the industry from awareness to action. Accessibility will be treated as a commercial priority rather than a compliance task and modern Android POS will play a major role in this shift. High contrast displays, text to speech capability, tactile feedback, simplified interfaces and support for assistive apps will become standard expectations. Merchants who invest early will deliver smoother, more intuitive and more inclusive checkout experiences. Those who delay will face growing legal, competitive and reputational risk. Accessibility is now fundamental to sustainable growth and to creating payment journeys that genuinely work for every customer.

Andrew Crocombe, Head of Embedded Banking Propositions, ClearBank

Payment innovation and embedded finance

Embedded finance poses a major opportunity for businesses in the UK next year, with the industry projected to grow from £6.47bn in 2024 to £15.77bn by 2029. According to a recent study of 200 senior business leaders at large UK-based corporates, nearly half (48%) of corporates see embedded finance as a way to drive new revenue streams, 38% of c-suite cite embedded finance as important for their company’s growth and 43% said they are actively considering offering branded accounts, savings, or lending tools within their own platforms.

However, adoption is still early: only 5% say they have already launched embedded financial offerings. Historically, firms looking to deliver embedded services have faced a compromise – work with a BaaS provider offering agility or an incumbent bank with proven governance and control frameworks but lacking the real-time APIs they need. Next year we expect next-generation, API-based banks to become the standard for embedded account and payments services, allowing corporates to create seamless experiences that deepen engagement, increase customer loyalty and drive new revenue streams.

By building on top of a regulated bank’s proven infrastructure, businesses can deliver competitive and compliant services and features, such as FSCS protection on eligible deposits, without incurring the substantial cost of obtaining a banking licence. It also means brands don’t need to compromise the quality of their services and maintain a customer experience consistent with their brand. As embedded finance evolves, brands adopting these solutions will set themselves apart, delivering frictionless, secure, and personalised financial experiences that meet the demands of tomorrow’s customers.

Sean Forward, Business Manager, Digital Currency, ClearBank

Institutional adoption of digital assets is anticipated to accelerate in 2026 as traditional finance begins integrating them into its core operations. While we can expect to see sovereign entities starting to hold Bitcoin reserves, more broadly, it won’t be surprising if Bitcoin starts to gradually lose its prominence, giving way to a more stable, regulated, and sustainable growth model. Stablecoin supply is projected to double, hitting $500bn by the end of the year and potentially reaching $2tn by 2030.

Regulatory clarity, particularly in the US with the GENIUS Act and in Hong Kong, which mandates 100% reserve backing, is expected to boost institutional confidence. US Bank-issued stablecoins are becoming increasingly dominant, facilitating real-time cross-border payments, corporate treasury integration, and tokenised settlements. Meanwhile the UK will complete its stablecoin and wider digital asset regime next year, following consultation and rule development in 2025. The UK must usher in a new regime that recognises banks alongside fintechs otherwise it risks losing its position as a global leader in finance and all the opportunities stablecoins provide.

Oliver Thornton, Head of Sustainability, ClearBank

Artificial Intelligence

In 2026, fintech’s AI agenda moves decisively from pilots to scaled deployment. Generative AI is advancing rapidly, yet studies show many firms struggle to realise Return On Investment (ROI) — those willing to rethink workflows, embed governance, and scale responsibly will unlock its true value as a catalyst for growth and innovation. The opportunity goes beyond efficiency: ambitious players are creating new revenue streams and customer experiences. Regulators are signalling safe adoption at speed through principles-based expectations, mapping to existing obligations like Consumer Duty, making robust governance essential for scaling.

Leaders are forming agile, multidisciplinary teams to iterate quickly and keep AI close to business users. At enterprise level, the conversation has shifted from productivity to culture change. Standardising model risk controls and embedding responsible AI as a core business capability, not a lab experiment. For 2026, three imperatives stand out: Prioritising high-value use cases tied to profit & loss (fraud, onboarding, risk, developer productivity); operationalising governance to meet FCA principles and anti-greenwashing standards; and investing in teams and culture, not just tooling. The real transformation lies in cross-functional ways of working and reimagining the experience of work.

Sustainability

With just five years until 2030 Net Zero targets, regulators are intensifying their focus on credible transition plans and capital mobilisation. In the UK, policymakers are moving to mandate robust strategies for financial institutions and large corporates, building on the ISSB S2 framework and aligning with the global push for standardised, decision-useful climate disclosures. Trust among the public and employees remains fragile, with stakeholders demanding real progress over sustainability marketing.

On top of this, regulatory scrutiny is rising: the FCA’s anti-greenwashing rule, in force since 2024, requires all sustainability claims to be fair, clear, and not misleading. Advertising enforcement has also tightened, with recent ASA rulings underscoring the importance of context and completeness, with omissions seen as misleading. Looking to 2026, the accelerating green transition and ‘great wealth transfer’ are reshaping consumer priorities and demographics. Fintechs and challenger banks are well positioned to lead and capitalise on this shift.

Those that embed sustainability in their strategy, will not only meet evolving regulatory expectations but also turn these pressures into catalysts for meaningful, market-driven change. By innovating in sustainable finance, engaging new generations of customers, and building trust through transparency, these firms can transform sustainability from a compliance requirement into a powerful driver of growth and competitive advantage.

Bernie Wright, Chief Information Security Officer, ClearBank

Across the board recognition of cybersecurity

2026 will mark a meaningful shift in Board and c-suite attitudes toward cybersecurity, recognising it as essential to organisational resilience and long-term value. A series of high-profile attacks this year has made one thing clear: cybersecurity directly affects the bottom line. Boards will demand more frequent updates, sharper insight into how attacks impact operations and clarity on the steps needed to strengthen resilience, especially across complex supply chains.

Organisations will pour more time and investment into ensuring they can recover quickly, with minimal disruption to customers.

Regulators raising the bar

They will expect deeper transparency around cyber controls, clearer identification of weaknesses and concrete plans for improvement. With reliance on a few major cloud providers increasing, scrutiny of resilience and recovery measures will intensify. Investors and customers will similarly expect evidence that organisations can withstand and bounce back from cyber incidents. Below are the key security developments businesses should have on their radar for 2026.

Cyber attackers will increasingly weaponise agentic AI

We’ll see autonomous tools scanning networks for weaknesses, generating tailored attacks and executing breaches at speed. Phishing campaigns will also become far more sophisticated, with AI producing highly personalised messages that are significantly harder for employees to detect. The result: faster attacks, smarter targeting and a much smaller margin for human error.

AI agent proliferation

Tech giants like Microsoft and Google are racing to deploy AI agents that automate repetitive tasks and boost productivity. As adoption surges – driven largely by the Fear of Missing Out (FOMO) – businesses will see quick wins. But the long-term oversight of these agents remains unclear. Without strong governance, they could become a new entry point for cyber attackers.

Ransomware sophistication

Ransomware-as-a-Service (RaaS) is now so accessible that attacks will keep rising. While businesses have tools to protect themselves, home users remain exposed – making personal devices a growing weak spot. Companies must reinforce rules around device use and help remote workers maintain secure setups. As more employees become susceptible to outside influences, insider threats will climb. Human awareness becomes critical recognising when something feels off and knowing how to respond.

Organisations can’t eliminate the risk entirely, but helping people recognise when things are not right and how to handle attacks is crucial for businesses. While it is never going to be perfect, this is about reducing the impact if possible.

Quantum computing threat

Quantum risk is edging closer. While full commercial capability may be 5–20 years away, major cloud providers and nation states could have early solutions within the next decade. Data harvesting for “decrypt later” attacks is already underway and will accelerate in 2026. Companies will focus more on cataloguing sensitive assets and planning what needs future-proofing.

Importance of identity and zero trust frameworks

Identity is the bedrock of any organisation. Expect even greater scrutiny of identity controls from businesses and suppliers, alongside wider adoption of zero trust frameworks as organisations seek more robust, assume-nothing security models.

Teresa Cameron, Group CEO, Clear Junction

Consumer demand for 24/7 instant payment capabilities has been driving change in the payments industry since Covid. Some regions have made real progress at a local level, but 2026 feels like the year we start to see this happen on a more global scale. Advances in technology, combined with greater regulatory clarity, should bring the trust needed for wider adoption of new payment technologies. To make the most of that shift, we’ll need banks and fintechs working together more closely, pairing the trust and regulatory experience of traditional institutions with the speed and innovation of newer players.

Some key themes we can expect:

Stablecoins move from crypto use case to settlement infrastructure

On the back of regulatory moves such as the proposed US GENIUS Act and MiCA in the EU, we’re starting to see how legal clarity can open the door to institutional use of blockchain-enabled settlement networks. Stablecoins, being pegged to traditional currencies, provide a relatively low-risk and highly efficient way to manage payments.

I expect stablecoins to continue emerging from the crypto ecosystem and become part of mainstream payments, particularly in day-to-day activity for corporate treasury, cross-border settlement and payment processors. The appeal is clear: near-instant, 24/7 settlement at lower cost than many traditional payment methods. Until now, the main obstacle has been a lack of regulation; as that changes, adoption should follow.

Tokenisation starts to tidy up the market plumbing

2026 looks set to be the year tokenisation moves from an interesting concept to a more routine part of the financial system. Smart, blockchain-based contracts can automate transactions and settlement, as well as record ownership, so that trades can be carried out with far less manual handling and fewer intermediaries.

This should lead to smoother institutional trading and more efficient post-trade processes. Coupled with growing regulatory clarity, such as the FCA’s recent consultation paper, we’re likely to see more institutional experimentation and, over time, adoption of tokenised instruments in live environments rather than just pilot projects.

AI-powered regtech becomes part of the standard compliance toolkit

Over the past few years, we’ve seen a continued rise in payment fraud and increasing regulatory pressure on payment firms to do more to protect consumers. That is driving strong demand for regtech tools that genuinely help.

One of the most useful roles for AI here is in day-to-day compliance and fraud monitoring. Tools can scan large volumes of transactions, spot patterns that suggest emerging risks, and help teams digest new rules and guidance more quickly. The final decision still sits with a compliance analyst, but a lot of the repetitive work can be handled upfront: better screening, fewer false positives and quicker reviews when something genuinely needs attention.

Resilience and security become the real test of new payments idea

In 2026, financial institutions will need to adopt more advanced security measures to protect against cyber threats as more activity moves online. Examples include stronger encryption technologies, biometric authentication and AI-driven security systems that can detect suspicious activity more quickly. Regulation such as DORA in the EU and operational resilience requirements in the UK are also pushing firms towards higher standards of protection in this space.

Rich Bayer, CEO, Clearpay 

As we move into 2026, it’s clear embedded finance has become central to how consumers manage and interact with their money. Traditional finance methods alone are no longer enough to meet their needs. Instead, consumers are turning to digital-first payment tools that offer greater flexibility, more control of their finances and a seamless shopping journey. Our research showed this trend is being driven by younger generations; nearly half (48%) of Gen Z and young Millennials now use Buy Now, Pay Later (BNPL) services once a month. The expectation of more flexible payment options isn’t limited to online shopping either, it’s increasingly expected when shopping in store too. Two in five (40%) of UK shoppers have said they would visit the high-street more often if BNPL options were available.

Consumers are increasingly adopting payment solutions and financial tools that don’t just facilitate spending, saving and investing, but can also help them more effectively manage their money day-to-day. In a challenging economic environment, consumers want greater visibility of their finances and more innovative technology that can help them make informed decisions and allows them to pay for goods in a way that suits their needs. 

To keep pace, banks will need to accelerate innovation and deliver simple, intuitive, products that make every day financial tasks easier. Retailers that respond quickly to changing customer expectations and integrate seamless, modern payment technologies that customers have come to expect as standard, will be best positioned to unlock growth in 2026.

Azimkhon Askarov, Co-CEO & Partner, CONCRYT

As we look ahead to 2026, the continued growth of non-cash transactions will reshape how merchants operate and compete. Mobile-first economies, expanding e-commerce, and the rise of real-time payment infrastructure are driving a global shift toward digital wallets and account-to-account payments. For merchants, this isn’t just about adding new payment options, it’s about rethinking how they build trust, scale globally, and deliver seamless customer experiences.

At the same time, 2026 is shaping up to be a challenging year economically, with growing signals that a stock market correction or downturn could occur within the next 12 months.

In this climate, merchants are likely to face tighter margins and more cautious consumers. That makes payment efficiency and liquidity management more critical than ever. Reliable cross-border payment flows, real-time settlement, and smarter cash flow visibility will help merchants remain resilient even as macroeconomic uncertainty rises.

We’re also seeing a sharp evolution in merchant expectations. Small businesses are demanding faster, more secure, omnichannel payment solutions, while larger merchants are prioritising integration, automation, and personalisation to drive efficiency. The rapid digitisation of B2B payments is amplifying this shift, as business buyers expect the same simplicity and speed they experience in consumer commerce.

In 2026, success for merchants won’t just depend on accepting payments, it will depend on how intelligently they can connect, protect, and optimise every transaction across channels and borders.

Saurabh Joshi, President, CSG Forte 

Biometric payments experiences will rule 2026

Payments are about to get personal…literally. In 2026, you won’t need a card, PIN or password; your face will be your wallet. Just as TSA now uses facial recognition to verify identity, payments will follow suit, ushering in an era of instant, touchless transactions. As digital KYC becomes the norm and physical cash fades, biometric data will unlock ultra-personalised experiences across channels, raising the bar for both convenience and security. 

Instant payments will divide the industry into leaders and laggards

In 2026, instant payments will cease to be a roadmap item and become a competitive requirement in the US. Merchants and financial institutions that haven’t made the leap will start to feel the business impact, losing out on speed-sensitive customers, real-time reconciliation and cash flow advantages. Instant payments won’t just improve speed, they’ll reshape working capital. Merchants who get paid faster borrow less, unlock liquidity and gain financial control. As the US payments market catches up to advanced markets abroad, this year will mark the line between those modernising payment rails and those falling behind. 

Embedded payments will get smarter in 2026

In 2026, we’ll see embedded finance morph into embedded insight. Leading platforms will use AI to dynamically rank and recommend the optimal payment method based on real-time factors like rewards, timing or affordability, before the customer has to ask. This means auto-selecting the credit card with the highest cashback, surfacing a pay-later option when funds are tight or predicting a user’s preferred method based on past behaviour. This intelligence will also extend to physical environments: your car will know which card to use at the toll booth, gas pump or drive-thru, and pay automatically.

Agentic AI will become the frontline against fraud

Agentic AI will become essential to detect fraud in real time, as it adapts to evolving scams faster than human-led monitoring. These systems will write and rewrite their own rules in real time, evolving with each fraud attempt and making reactive security obsolete.

However, as payment systems collect richer consumer data, such as biometrics and behavioural insights, the stakes will be even higher. With more personal data in motion, fraud prevention must be as dynamic and intelligent as the risks it seeks to prevent.

Nick Merritt, Executive Director, Designit

AI’s Honeymoon Ends – 2026 becomes the year of “Measurable Productivity”

By 2026, Financial institutions will stop treating AI as a silver bullet and start demanding quantifiable ROI. The pressure from Boards and regulators will shift investment from “experimental” to “explainable” AI. Retail banks will move away from flashy generative assistants and focus on automating the unglamorous but high-volume processes, like onboarding, KYC, compliance checks, and internal reporting. 

Insurance will follow suit:  instead of chasing “AI underwriting”, the focus will move to data accuracy and automation of claims handling. The lesson will be that the value of AI depends on the quality of the plumbing, not the brilliance of the interface. 

Commercial banks will double down on decision support and scenario modelling, particularly for credit and risk, but those tools will have to process resilience under scrutiny. CFOs will demand the same financial discipline from AI initiatives that they expect from any Capital Investment. 

In summary, 2026 will mark the pivot from hype to hygiene. Where AI’s worth is proven in operational efficiency, not headlines

Inflation and debt reshape the balance sheet and the workforce that runs it

In the UK, persistent inflation and a stubbornly high cost of capital will keep financial institutions cautious through 2026. Retail banks will tighten mortgage lending as affordability stress tests bite. Lending to small businesses will become more selective, and insurers will reprice long-term products to reflect higher claims costs and investment volatility.

For commercial banks, capital efficiency will take priority over expansion. Liquidity buffers, provisioning, and cost control will move back to the top of the agenda. It will feel like a return to pre-2008 discipline, but with digital tools to manage exposure in real time.

That caution will extend to people’s strategy. With margin pressure rising, firms will reassess the economics of talent. Hybrid and remote models, once seen as a lifestyle perk, will become financial levers. If you can run a trading or analytics function from Leeds, Warsaw, or Bangalore, the logic of paying London premiums weakens. Expect a quiet migration of roles north and abroad.

Meanwhile, at the top end of the market, high earners will look for exits. If enough senior talent relocates to Dubai or Singapore, firms will have to rethink retention, leadership mobility, and incentives for a borderless workforce.

Inflation will tighten more than capital flows. It will reshape how and where finance works. The institutions that adapt their workforce model as intelligently as their balance sheet will stay resilient.

When the AI hits the data wall, financial services will rethink what intelligence really means

If the growth in AI infrastructure and training data begins to level off, the sector will feel it first through a slowing of “AI-driven” innovation cycles. The so-called data wall – the point where useful, high-quality data becomes harder to source and more expensive to label – will reduce the rate of improvement in large models. That doesn’t kill progress, but it does reset expectations. 

For Financial Services, this moment could actually be healthy. Rather than chasing ever-larger, ever-more-generalised models, institutions will refocus on domain-specific intelligence; models trained on proprietary, high-quality financial and behavioural data. Banks, insurers, and asset managers will start treating their internal data as a strategic rather than a compliance headache. 

Expect a surge in interest around synthetic data, federated learning, and new forms of privacy-preserving analytics. The smartest firms will invest in internal data stewardship capabilities, tuning what was once “data hygiene” into competitive advantage. 

This shift will also alter market behaviour. Investors and analysts will pay more attention to which financial institutions are generating real productivity gains from AI, not just marketing them. Leander’s and insurers that demonstrate clear efficiency improvements, faster risk modelling, and more accurate decisioning will attract capital. Those still talking about “innovation journeys” will lose credibility. 

As AI growth steadies, BFSI will move from imitation to specialisation. The Institutions that treat data as a living asset, not an exhaust by-product, will set the next benchmark for performance.

Regulation becomes the defining force in digital finance 

The next wave of digital transformation in financial services will be shaped less by technology and more by oversight. As AI becomes embedded in lending, risk modelling, and fraud detection, regulators will begin treating algorithms and model providers as part of the financial system’s critical infrastructure.

Institutions will be expected to prove not only that models are effective, but that they are fair, explainable, and traceable. The PRA and FCA will tighten expectations on model risk governance, auditability, and accountability for third-party vendors. This will drive a new wave of investment in what might be called “governance technology” – systems that log, monitor, and validate model behaviour.

It will feel, at times, like the fun has been taken out of innovation. But in truth, this is the moment where discipline separates genuine advantage from hype.

Compliance will evolve from a cost centre to a competitive advantage. Institutions that can evidence trust will grow fastest.

Martin Bradbury, Regional Vice President, UK&I, Dynatrace

The ongoing payment outages affecting some of the world’s most recognised brands highlight a growing Customer Experience (CX) problem: payment failures. UK businesses report an average of more than five major outages every year, showing that disruption is not a matter of if but when.

These glitches are not just an operational nuisance; they are recurring threats to revenue and customer loyalty. Dynatrace’s research has found that £1.6bn of revenue is at risk each year in the UK retail and hospitality sector alone due to payment outages.

In 2026, digital resilience will stop being ‘just IT’s problem’ and become a board-level priority. Leading brands will invest in real-time fault detection, automated recovery and systems that fix themselves in seconds.

In the year ahead, we’ll see more organisations wake up to this reality. Payment, online, and software outages are no longer background noise, they are front-line CX failures that directly impact customer satisfaction, loyalty and revenue.

Scott Frisby, Head of Strategy for Europe, Elavon

2026 will mark a pivotal year in the battle for digital wallet dominance. For the first time, we’re seeing a new generation of consumers who view plastic cards as outdated as cash: a fundamental shift in payment behaviour. With NFC access now available on Apple devices, the competitive landscape is set to intensify dramatically. The winners won’t just be those offering convenience; they’ll need to deliver superior user experiences through features like AI-powered shopping assistants and sophisticated personalisation engines.  

What makes this particularly significant is that wallets are becoming the gateway to future payment innovations from cryptocurrency to account-to-account payments and central bank digital currencies. Payment processors have long recognized the need to ensure their platforms can support all of the multiple wallet types seamlessly(from Google Pay through to local European wallets like Wero or Vipps MobilePay) – as wallets will play a pivotal part in how consumers interact with money for the next decade.

The reality of agentic commerce

After months of proof-of-concept announcements from major payments processors, 2026 will see agentic commerce move from theoretical promise to practical implementation.  

AI agents will begin handling complex shopping tasks such as researching products, curating selections, and even negotiating prices on consumers’ behalf. The true breakthrough lies in bot-to-bot transactions, where merchants’ AI systems interact directly with consumers’ agents to complete purchases.  

This fundamentally improves both sides of the transaction: consumers save time while gaining highly personalised shopping experiences, whilst merchants gain unprecedented insight into purchase intent and consumer preferences. However, widespread adoption hinges on resolving critical operational and regulatory challenges around liability, fraud prevention, and compensation models for large language models.  

The payments industry is working double-time to establish these frameworks, from developing new fraud detection protocols through to creating standards for agent authentication. 2026 will be a very interesting year as these developments take hold. 
Financial management tools make an AI-driven comeback

Personal financial management apps have come and gone in the market before, but 2026 promises to bring a fresh wave with genuine staying power. Recent announcements around AI-driven financial assistants signal a fundamental shift: these aren’t static balance aggregators anymore – they’re active advice engines. 

Transaction data is becoming the currency for generating meaningful insights. The richer your payment history within a single provider, the more valuable the guidance you’ll receive. For small businesses, this becomes transformative: AI tools will synthesise payment acceptance data with spending patterns to deliver actionable operational advice from inventory optimisation to customer trend analysis. Payment providers working with thousands of merchants across sectors like hospitality, airlines, and retail are uniquely positioned to offer these insights, having observed patterns across diverse business types and geographies. 

The challenge lies in navigating strict financial advice regulations whilst delivering genuine utility. Unlike previous iterations that offered beautiful charts but limited value, these AI-powered tools must demonstrably improve users’ financial health to avoid another wave of abandonment.

Stablecoins edge toward the mainstream 

2026 could well be the year stablecoins begin their journey from niche asset to legitimate payment method, though widespread adoption remains further out.  

The path to mainstream acceptance will likely start when major multi-purpose wallets will enable stablecoin storage alongside traditional payment methods. This integration will provide the crucial signal to merchants that stablecoins are approaching viability. 

For e-commerce merchants where wallet acceptance is already baked into the check-out page, adding stablecoin as a payment method becomes a logical next step once the infrastructure exists. However, small businesses will see limited immediate benefit, and consumer adoption faces the classic chicken-and-egg challenge: consumers won’t load stablecoins into wallets until merchants accept them widely, and merchants won’t prioritise acceptance until consumer demand materialises. 

Embedded finance becomes a business operation system 

Embedded finance is evolving beyond simple payment integration into comprehensive, AI-powered business operating systems. In 2026, we’ll see commerce platforms move from merely processing transactions to delivering sophisticated, sector-specific financial ecosystems.

This transformation is already underway: the embedded payments sector alone was valued at over $24.7bn in 2024 and is projected to achieve a compound annual growth rate of 30.3% over the next decade. 

For instance, a coffee shop won’t just get payment processing, they’ll receive curated insurance products, integrated accounting, and AI-driven operational insights based on their transaction data. The partnership model driving this evolution allows each party to play to their unique strengths: software platforms focus on user experience and industry expertise, while payment providers handle the financial infrastructure, security, regulatory and compliance requirements, delivering best-of-breed solutions. 

The real game-changer is synthesising both sides of the financial picture: money earned through payment acceptance and money spent on business operations. AI tools will analyse this dual data stream to provide actionable advice, alerting businesses to demand spikes, recommending inventory adjustments, and connecting them with optimal suppliers. 

Many platforms have zero interest in getting into payments and all the regulatory and compliance work that entails, they simply want this critical aspect covered by the best available. This is why larger platforms powering millions of businesses are embedding payments as invisible infrastructure rather than building their own.

Anna-Marie Turley, Head of Fintech, Financial, Enterprise Ireland 

Embedded finance, AI and regtech to power $1.5 tn fintech era 

From our vantage point, the worldwide fintech landscape over the next five years will be propelled by explosive growth in embedded finance, projected to reach a staggering $7.2tn market by 2030, enabling seamless integration of payments and lending into non-financial platforms like e-commerce and ride-sharing apps. This will be amplified by the AI in fintech market surging to $41.16bn by 2030, revolutionising fraud detection, personalised budgeting, and risk assessment with predictive analytics that could save institutions up to $1tn annually in operational efficiencies. 

Banking-as-a-Service (BaaS) revenues are set to skyrocket 158% by 2028, fostering a $22.6bn ecosystem by 2032 where neobanks and digital wallets dominate, handling over 20 billion IoT-enabled devices for real-time transactions. Blockchain and DeFi will mature, with the global blockchain market expanding 143-fold to $1.5tn by 2030, enhancing cross-border payments and sustainable finance amid rising ESG demands. Stablecoins and agentic AI will redefine money movement, while quantum cryptography emerges to secure post-quantum threats. 

It’s expected that the overall fintech market will hit $1.5tn in revenues by 2030, growing at a 15–20% CAGR, with Asia-Pacific leading at 27% as unbanked populations gain access via mobile-first solutions.

Mark Andreev, COO at Exactly.com

Omnichannel isn’t optional anymore; it’s the foundation for trust. Personalisation and social commerce are reshaping journeys, turning casual engagement into transactions and brands into recognisable identities that consumers notice and respond to. Together, these elements create a seamless, connected experience that customers demand for 2026. 

We’re already seeing the early emergence of agentic commerce, and we expect this trend to accelerate as consumers demand new levels of convenience,” Andreev added. “At Exactly.com, our experts anticipate that AI will likely play a vital role in helping users research, compare, and we may even see test runs of autonomous transactions, ushering in a new era where AI is a key driver of the shopping experience.

Retail leadership is also undergoing a transformation: digital businesses must keep pace with AI-driven consumer expectations, while brick-and-mortar stores need to figure out ways to integrate AI to enhance in-store experiences. In short, algorithmic leadership will be crucial to maintaining a competitive edge in the near future.  

However, for AI and social commerce to thrive sustainably, some long-standing trust challenges must be first addressed. As we look toward 2026, building customer confidence will be critical and should remain a central focus for retailers, both online and offline.  

Shoppers are now demanding more than just a fast checkout and convenience – they expect transparency, security and a frictionless experience across channels that doesn’t involve a trade-off between safety and convenience.

2026 is a pivotal year for e-commerce, with trust, integrated channels and AI-driven convenience set to redefine how consumers shop.

Guillaume Bouvard, Co-founder, COO & CMO, Extend

AI takes over the finance back-office and spend management becomes a real-time, all-in-one, touchless experience.

AI will unify cards, software, travel, procurement, and AP into a single platform that manages every dollar in real time.

US neo-issuers scale aggressively and global players bring added pressure.

Neo-issuers are moving aggressively upmarket, raising the innovation bar for everyone, especially traditional banks.

Commercial card infrastructure enters a shake-up and banks turn to abstraction layers to avoid impossible processor migrations.

Instead of ripping out legacy systems, banks will modernize by building abstraction layers on top and partnering with fintechs

Agentic payments become real as AI shifts from passive to active.

2026 is the year agentic payments move from concept to deployment, the first step toward hands-off finance.

Andrew Bateman, EVP, Lending, Finastra

Key trends shaping the future of lending

In an era where economic uncertainty has become the norm, forward-thinking financial institutions are turning to technology as a strategic lever for resilience. By embracing digital solutions that enhance agility and responsiveness, lenders can gain significant competitive advantage in a volatile environment.

Technology is no longer just a support function, it’s emerging as a primary differentiator in an increasingly complex and competitive global market. With this in mind, three technology trends set to define the future of lending are: digital transformation, AI adoption and ecosystem development.

1. Accelerating digital transformation

Technology offers a vital path through economic uncertainty, yet many financial institutions remain constrained by legacy infrastructure. Outdated systems are among the most significant barriers for banks looking to adopt AI, advanced data analytics, and other innovations that could unlock competitive advantage.

In trade finance – a sector traditionally slow to embrace new technology – the shift from monolithic solutions to cloud-native, modular platforms marks a significant evolution. 

Importantly, transformation doesn’t require risky “rip and replace” strategies. A phased approach, where next-generation solutions are deployed alongside existing infrastructure, enables institutions to modernise sustainability while minimising disruption and maintaining operational continuity.

Cloud-first models are now central to modern lending technology strategies. By transitioning to fully managed cloud environments, banks can benefit from end-to-end technology services – allowing them to focus on business outcomes rather than operational overhead. These models offer unparalleled scalability, flexibility, and deployment speed, making them ideal for institutions prioritising agility and innovation.

Perhaps the most visible benefit of digital transformation is on customer experience. Digital self-service portals and mobile interfaces enhance transparency and reduce the frustrations often associated with traditional lending processes. By placing the customer at the centre of the experience, banks can build long-term trust and loyalty. And, as these digital foundations strengthen, they create the perfect environment for the next frontier in lending technology: artificial intelligence. 

2. Harnessing AI for operational efficiency and better customer experiences

With digital foundations established, financial institutions are increasingly turning to artificial intelligence as the next frontier in lending innovation. However, a fundamental challenge remains: data quality and structure. Without well-organised, standardised data, even the most advanced AI tools will fall short. This underscores the ongoing need to harmonise the vast and varied datasets that underpin the lending ecosystem.

AI offers the potential to revolutionise credit assessment by enabling more holistic evaluations. Rather than relying solely on traditional metrics like historical financial data and collateral, AI-powered analytics can incorporate alternative data sources to build a richer, more accurate picture of creditworthiness. This is particularly valuable for smaller businesses that may lack extensive credit histories. Personalisation is also emerging as a key differentiator, with banks and fintechs tailoring lending solutions to match the unique cash flow patterns and operational needs of individual clients.

In trade finance, AI can help bridge a growing knowledge gap as experienced professionals retire and regulatory complexity increases. This is an area where AI-powered assistants can deliver significant value by providing banking staff with accurate, real-time, and context-aware assistance. These tools help users to navigate documentation, fraud detection, and compliance with greater ease and accuracy. These tools simplify traditionally-complex processes, reducing reliance on specialised experience. 

By automating repetitive tasks, AI is set to enhance productivity while freeing staff to focus on relationship-building and revenue-generating activities. Advanced machine learning models will improve credit risk assessment and fraud detection with unprecedented precision, while real-time analytics will empower banks to respond dynamically to customer needs.

To fully unlock AI’s potential, financial institutions must embed it into core operations – not as a bolt-on but as a fundamental component in their lending infrastructure. This requires a culture of innovation, a commitment to data excellence, and a strategic approach to integration.

3. Building ecosystems and partnerships for future-ready lending

While internal innovation remains essential, the future of lending will be shaped by collaboration beyond organisational boundaries. To remain competitive, financial institutions must embrace an ecosystem mindset, partnering across the industry to integrate digital solutions and data flows with core lending platforms. This approach lays the foundation for sustained innovation, agility, and growth. 

As other financial sectors rapidly advance, lending must accelerate its technological evolution. While asset classes like cash, deposits and bonds have already embraced digitisation and tokenisation, many lending operations lag behind. Without modernising and the adoption of technologies like blockchain, lenders risk losing sponsors and borrowers to more efficient, tech-enabled markets. In trade finance especially, blockchain platforms are poised to revolutionize traditional processes, creating unprecedented speed, efficiency and transparency. 

Thriving in this collaborative environment requires more than just technological investment – it demands investment in human capital. As AI becomes embedded in lending operations, institutions must develop the skills to manage, supervise and collaborate with intelligent systems. Building future-ready teams is just as critical as building future-ready tech.

By fostering both technological partnerships and cultivating talent, forward-thinking lenders can create resilient, adaptive ecosystems – ready not just for 2026, but for the long-term future of lending.

Siobhan Byron, EVP, Universal Banking, Finastra

Navigating the future: banking trends for 2026

The banking industry is experiencing a period of rapid change, with forward-thinking organisations embracing comprehensive transformation to remain competitive in an increasingly digital world.

As we look ahead, three key trends are shaping banking’s future: technology transformation, advances in artificial intelligence (AI) and, of course, ever evolving consumer needs. Digital transformation, supported by new possibilities for service delivery and operational control, is delivering unprecedented agility. AI is accelerating innovation and efficiency across banking and regulatory compliance. Meanwhile, consumers increasingly expect personalised, frictionless experiences across all touchpoints making a customer-centric approach crucial in creating sustainable competitive advantage.

Together, these factors – coupled with an evolving regulatory landscape around digital identity – are reshaping how banking will look in 2026 and beyond.

Tech transformation and ecosystem integration

Digital transformation is reshaping how financial services are developed, delivered, and consumed. Recognising the constraints of legacy systems, traditional institutions that embrace cloud-native core banking systems and modular, cloud-first architectures are enhancing their agility and responsiveness.

The shift toward platform models and embedded finance is creating an interconnected ecosystem where traditional boundaries blur. Many banks are adopting composable architectures that allow them to partner strategically with fintechs, integrating innovative capabilities through open APIs and event-driven architecture while maintaining control of core customer relationships. Adopting an approach based on symbiosis is crucial in enabling banks to modernise incrementally while leveraging fintech agility to meet rapidly evolving customer expectations.

Banks with modernised, flexible technology infrastructure will be best placed to expand their digital banking platforms and prioritise mobile-first experiences, reflecting the changing preferences of today’s consumers. They can also pivot more quickly to changing market conditions, maintaining service continuity while competitors struggle with legacy constraints. Such operational resilience directly contributes to customer trust, as institutions that remain reliable during crises earn deeper loyalty and confidence.

AI as a key enabler in driving innovation

AI is fast becoming a critical differentiator in driving innovation and efficiency savings. Traditional AI implementations have often been limited to specific use cases like chatbots or basic fraud detection. In 2026, the increased deployment of agentic AI will represent a significant evolution.

Autonomous, intelligent agents – that can reason, learn, and act across multiple banking domains simultaneously – offer the potential to deliver real-time insights, manage machine-to-machine interactions, and adapt to changing conditions without human intervention.

For this potential to be realised, banks must ensure their technological foundations can support AI-driven operations. Modern core banking platforms with open APIs have become essential prerequisites for institutions looking to deploy advanced AI capabilities at scale. Forward-thinking banks are adopting a strategy of symbiosis, integrating agentic AI with existing infrastructure to accelerate innovation without the disruption of wholesale system replacement.

Perhaps the most transformative application of agentic AI lies in its ability to deliver truly personalised banking experiences. Today’s consumers expect more than digital convenience. They want services tailored to their unique financial needs and goals. Agentic AI enables this hyper-personalization. It can analyse real-time behaviour patterns across multiple channels, predict customer intent and anticipate financial needs, before dynamically tailoring product recommendations and communications to match individual circumstances.

Executed well, this level of personalisation will translate directly into business outcomes – reduced customer churn, increased product adoption, and stronger long-term loyalty. It’s also crucial preparation for another potential development in 2026: the need to court both human customers and their digital representatives as AI agents gain more autonomy in managing consumer finances. Indeed, Celent is forecasting that 18% of all e-commerce in Europe will be agent-initiated by 2035. Banks must consider the implications of this.

Customer centricity: the ultimate competitive advantage

Regardless of, or perhaps because of, the rise in autonomous banking, banks that adopt a more personalised, customer-centric approach stand to gain a crucial differentiator in a crowded landscape. The most successful institutions understand the importance of empowering frontline staff to deliver personalised service and trusted guidance to customers, while leveraging technology to deliver consistent experiences at scale, and in a cost-effective manner, across all channels.

This approach requires sophisticated data capabilities to understand customer needs, robust security to protect sensitive information, and agile systems. Technology modernisation and AI adoption are enabling banks to achieve this balance between personalisation and efficiency. By automating routine transactions and processes, staff can focus on higher-value interactions that build relationships and address complex financial needs. The challenge for banks is doing this profitably in a world where information asymmetry is dead, where customers have unprecedented access to financial information and competitor offerings.

In 2026 and beyond, the most successful financial institutions will be those that effectively integrate advanced technologies, operational resilience, regulatory compliance and customer centricity into a cohesive strategy. Rather than treating these as separate initiatives, forward-thinking banks recognise their interconnected nature, how strong governance enables trust, how resilient systems support consistent customer experiences, and how personalised service creates lasting competitive advantage in an increasingly commoditised market.

Barry Rodrigues, EVP, Payments, Finastra

Payments trends shaping the year ahead

The payments landscape has continued to evolve rapidly throughout 2025, with a focus on improving the speed, cost, and efficiency of transactions. The addition of new payment alternatives are creating an ecosystem that offers banks and their customers greater choice and flexibility.

Four key priorities we have heard from our bank customers in the year ahead include: modernising their platforms, accelerating the use of real-time payments, adopting new cross-border payment rails, and integrating Gen AI-driven capabilities. Banks need to adopt a holistic and integrated approach that allows them to adapt to change quickly as they focus on delivering seamless, resilient, and customer-centric payment experiences.

Payment modernisation

Legacy technology has long proven a pain point and is increasingly out of step with the demands of real-time processing, regulatory complexity, and customer expectations for speed and transparency. A shift toward modular, cloud-native platforms that offer greater flexibility, resilience and scalability isn’t just about replacing outdated systems but about enabling smarter, more agile operations.

Decoupling core payment functions like routing, validation, and compliance from the underlying technology layer, is giving banks the ability to upgrade specific components without disrupting the entire stack. Banks that embrace modern, modular, API-based platforms will be better equipped to scale, respond to regulatory shifts, and lead in the next phase of payments evolution.

Rise in real-time payments

Governments around the world have been on a mission to deploy real-time payments to meet demand for 24×7 resilient, mission-critical payments. Today more than 80 countries across the globe have deployed instant payment schemes and it’s estimated that by 2028, one in every four payments sent globally will be real-time.

Uptake for real-time payments in the U.S. has grown significantly over the last two years. A recent report shows that some 58% of US banks now use both RTP and FedNow for instant payments, with many banks no longer seeing adoption as a choice.

The benefits for customers are clear: instant payments are faster, more affordable and offer treasurers greater cash flow visibility and enhanced liquidity management. If banks are not already offering this capability, it needs to be a priority in the year ahead, together with ensuring they have the right capabilities in place to combat fraudulent payments in real time and comply with regulation.

Expansion in cross-border payment rails

The rise of alternative payment rails alongside SWIFT – such as Visa Direct, Mastercard Move and Thunes, plus regional cross-border immediate payment initiatives – are rapidly reshaping the way money moves across borders. In parallel, stablecoins are moving from the fringes of cryptocurrency to mainstream finance, offering increased flexibility, transparency and speed, with 24×7 secure settlement for fiat currency.

The State of Crypto 2025 report from Andreessen Horowitz shows how stablecoins have matured in 2025 – powering $46tn in annual transactions, rivalling Visa and Paypal. Looking forward to 2030, industry projections forecast that some 12% of cross border transactions will be made via stablecoins.

As banks navigate an increasingly complex web of networks and rails, offering more ways than ever to move money across borders, they need the ability to weigh multiple factors such as cost, speed, compliance and availability in real time. The ability to easily connect to new networks through a payment-hub approach and dynamically select the best route for each transaction is becoming a key differentiator in allowing banks to optimise performance, manage liquidity more effectively, and respond quickly to disruptions or regulatory changes.

As payment volumes grow and customer expectations rise, banks that embed routing intelligence into their infrastructure will be better equipped to deliver consistent value, adapt to change, and compete globally.

Gen AI as a strategic enabler

Going forward, we should expect to see banks increasingly embracing Gen AI not just as a tool for automation, but as a strategic capability that enhances decision-making and drives operational efficiency. One example on the horizon is the use of conversational interfaces within payments operations. The ability to interact with systems using natural language offers the potential to speed up payment investigations significantly, enabling staff to pinpoint anomalies and conduct repairs using real-time insights.

Over time, further improvements in contextual understanding and predictive analytics can help operations teams not only identify issues but anticipate them before they escalate.  As the technology evolves, its role in payments will shift from reactive support to proactive orchestration. Analysing transaction patterns, spotting irregularities and suggesting alternative payment routes are among a range of benefits that will help banks deliver faster, more transparent, and more personalised experiences.

Adopting a modern infrastructure approach will make it easier to integrate new payment rails, accommodate stablecoins, embed AI capabilities, and respond to market changes more quickly. Success will come from turning complexity into opportunity, using smarter systems to deliver faster, more transparent, and more resilient payment experiences. Institutions that embrace such transformation will be well positioned to meet rising expectations, respond to change, operate more efficiently, and stay ahead in a fast-moving global landscape.

Mike Stawchansky, Chief Technology Officer, Finastra

Five technology trends redefining financial services

Five pivotal technology trends are creating opportunities and challenges for financial institutions in the year ahead. Cloud computing, component-based modernisation, artificial intelligence and advanced cybersecurity are reshaping the delivery of financial services with advances in quantum computing also on the horizon.  

Accelerating cloud migration

Cloud computing is fast becoming a foundation of modern banking infrastructure, transforming how financial institutions operate and compete in an increasingly digital marketplace. Estimates from CoinLaw show that as of 2025, circa 60% of banks globally will have shifted at least 30% of their critical workloads to the cloud, suggesting there’s still some way to go in the year ahead. Cloud computing supports the need for increased flexibility, scalability, and speed – enabling banks to integrate value-added services through secure APIs and to be more agile in innovating to meet customer needs.

As cloud uptake accelerates, and in the wake of recent industry infrastructure outages, financial institutions will increasingly prioritize risk mitigation through diversified cloud strategies to ensure maximum resilience for mission-critical services. As more reliance is built on the cloud, fintech vendors that have built cloud-agnostic software will have a definitive advantage supporting hybrid and multi-cloud deployments.

Delivering modernisation through a component-based approach

While the replacement of legacy core banking systems is notoriously difficult, failure to modernise is no longer an option in today’s fast-changing landscape. Breaking down complex systems into self-contained modules that can be upgraded, scaled, and managed independently, fast-tracks innovation in key areas that align with business objectives.

An approach based on ‘symbiosis’ is key: building out modern microservices that can be integrated into legacy core banking solutions while ensuring seamless access to the latest features via a frictionless upgrade path. Underpinned by APIs, modularisation and product decomposition is a key strategy for overcoming legacy component by component.

Realising the promise of AI

AI adoption has grown dramatically. OpenAI reports that ChatGPT now serves more than 800 million users every week, while Google Gemini continues to rapidly expand its user base. While AI is already accelerating individual productivity, the pressure is on in 2026 to deliver tangible benefits and return on investment for enterprise-level AI deployments.

The shift from experimental AI to strategic implementation demands measurable outcomes aligned with specific business objectives. Equally essential is a full understanding of the potential and limits of data integration within the organization. If data across the enterprise is not discoverable or in a usable state and the AI knowledge and experience of teams is subpar, then investments and AI projects will falter. Success hinges on ensuring data is well governed and securely accessible to the tools selected. Trusted providers that understand and ensure data access with proper compliance guardrails will be instrumental in offering key insights without causing additional risk.

For financial services leaders, the path to AI success requires a dual focus on technological infrastructure and human capital. Modernising legacy systems to support advanced AI applications while simultaneously upskilling staff to leverage these tools effectively creates a foundation for competitive advantage.

Combatting growing cybersecurity threats

With AI fueling the emergence of advanced cyber security threats, such as sophisticated phishing attacks, deepfakes and social engineering, financial services organisations must continually adapt to address emerging attack vectors. Just as the threat actors get faster and more sophisticated utilising tools that can work across large data sets autonomously so security professionals must deploy their own agentic AI tools designed to detect and neutralise threats before they can compromise sensitive financial systems.

Investing in cloud security solutions, such as SECaaS, and ensuring the behavior of all employees – together with all members of the extended supply chain – supports a robust security posture, is essential.

In this heightened threat environment, proactive security testing becomes non-negotiable. Financial institutions must regularly conduct simulated attacks that stress-test all aspects of their organisational defenses, enabling them to identify vulnerabilities before malicious actors can exploit them. A continuous cycle of simulation, refinement and strengthening creates a dynamic security posture capable of adapting to a rapidly evolving threat landscape in the year ahead.

Ensuring readiness for quantum computing

Experts are predicting that 2026 will be the year we start to see ‘quantum advantage’, where quantum computers are able to demonstrably outpace classical machines for certain tasks. The IBM Institute for Business Value places banking joint fourth out of 14 in its Quantum Readiness Index, with the industry investing circa 12% of R&D budgets in such initiatives. Critical factors for success in this area include organisational readiness, alongside tech maturity, as well as using investment in quantum and AI to amplify each other’s impact and maximise value.

Overall, financial institutions cannot afford a piecemeal approach to technological transformation. An appetite to embrace continuous innovation and develop the organisational agility to pivot rapidly is key. Those already allocating resources strategically, building technical capabilities incrementally, and fostering partnerships with specialised partners that can accelerate their transformation journey will be best positioned for success.

Chris Ostrowski, Product Management Leader, FinScan

The payments revolution ushers in a compliance transformation

It would be difficult to find anyone, anywhere in the world, who doesn’t appreciate the innovations that have transformed the way we move money. Since the turn of the millennium 25 years ago, traditional barriers and outdated systems have been consigned to the history books. Payments are faster, more secure and significantly cheaper.

But more than most people, those who work in the financial crime and compliance sphere are aware of the money laundering risks created by the rapid growth in real-time payments. Compliance teams often sit on the front lines, tasked with preventing bad actors and stopping the flow of illicit funds, and are held accountable for any failures. Regulators are telling banks not to wait for them to provide guidance and to figure out how to manage this risk on their own.

The adoption of stablecoins, blockchain, instant payments or more, are now viewed it, first and foremost, from the perspective of safety, trust and regulatory compliance. If the industry’s appetite for transformation is to become a reality over the next few years, 2026 could prove to be a milestone year that lays the foundation for future success.

From slow and costly to instant and inclusive

Identifying success in the payments industry requires recognising the enormous progress we’ve made in rapid technological innovation and remarkable democratisation of access.

For far too long, global payment networks largely relied on 20th century infrastructure. Consumers and small businesses experienced slow, expensive transactions primarily controlled by traditional banks and credit card companies. In some countries, an accessible banking network and affordable payment infrastructure didn’t exist, so individuals and businesses remained unbanked.

Fast-forward to today, and payments of all types – including retail, corporate, domestic and cross-border – are completed within seconds, regardless of whether the transfer is $5 or $5 million. Africa leads the world in mobile payments and digital wallet adoption has become the norm. Even the smallest shops on the remote islands of Indonesia can accept payments through smartphones and access their funds instantly.

KYC and the need for speed

In financial crime and anti-money laundering (AML), knowing your customer (KYC) has long been the cornerstone of safety and trust. This alone is no longer sufficient going into 2026. The ease of access to payment networks is a game changer.

Financial institutions and businesses must verify the ultimate beneficial owners (UBOs) associated individuals and entities, and whether they appear on lists of sanctioned suppliers and distributors, shipping routes and logistics partners, local banking correspondents, and more. Any risky payments must be modelled and identified before the crime happens.

The stakes are raised by the unprecedented speed at which this all needs to be done. Customers expect instant transfers to be the norm, while regulators expect instant sanction screening and AML checks to identify and stop risky payments. In the EU, for example, these reviews must be completed in under 10 seconds.

When money moves instantly, so does the risk of financial crime. Nearly 80% of compliance professionals say their current tools can’t keep up with faster settlement speeds, according to a Forrester study.

The consequences for getting it wrong are more severe than ever. In the US, enforcement actions are stronger. Pleading forgiveness and accepting a nominal fine as “the cost of doing business” is no longer acceptable. Regulators are imposing measures that restrict business growth until compliance standards are enforced across the business.

In the EU, new regulatory rules mean banks and PSPs are responsible for reimbursing victims of authorised push payment (APP) fraud starting in 2026. Unsurprisingly, there’s been pushback by the industry, as many scams begin with a phone call or social media interaction. As such, the question arises as to why those industries aren’t liable, even partially.

An additional factor to consider is the growth of AI-enabled scams, social media, third-party wallets, and private rails to move funds. These developments are exposing financial institutions and tech payment companies to new and severe risks, and need to be tackled head-on.

Recalibrating compliance models to be fit for the future

Addressing these issues requires two key ingredients: global coordination at a regulatory level, and investment in robust compliance infrastructure. We hope to see substantial progress in both areas in 2026.

With instant payments moving 24/7/365 across multiple currencies (including digital) and jurisdictions, a consistent global approach is essential. There are already fruitful conversations taking place at an industry level, between central banks and regulators as well as the Bank for International Settlements (BIS).

This coordination will create an environment where the compliance standards are made clearer and processes are standardized. Divergent rules, in contrast, create unintended consequences or regulatory arbitrage.

For financial institutions and businesses, tackling these new challenges requires a complete recalibration of their risk models. With multiple payment channels and numerous types of illicit activity taking place every day, robust controls are needed at every level.

Technology (AI, in particular) offers the potential to streamline checks and simplify complex processes. It has become the cornerstone of modern compliance by amplifying human decision-making and identifying criminal and risk patterns.

Looking ahead with cautious optimism

The future of payments is digital. The advances of the past decade have laid the foundation for exciting things to come. The adoption of stablecoins, digital wallets, and routing across multiple rails points to a payment innovation 2.0 – where individuals have more control. Fintech and paytech companies can capitalize further if traditional banks don’t.

Financial institutions can no longer rely on legacy tools, dated assumptions, or slow processes. Criminals are moving faster and in more imaginative ways. Payment channels are increasing, and regulatory expectations are intensifying. Twenty-five years from now, the way we make and receive payments will be radically different. Those who adapt will be well positioned for the next era of digital transformation.

Carlos Marmolejo, CEO, Finsus

LatAm will be a breakout fintech region

The LatAm region continues to demonstrate its potential in becoming a key global market for digital finance. Brazil has led the charge, with a surge in fast growing startups reshaping the country’s financial system in a variety of fintech subsectors, from payments and credit to digital banking.

However, the stage is set for Mexico to become a fintech hub in its own right. The combination of huge numbers of unbanked individuals and SMEs, rural areas with no traditional bank branches, and a young, tech-savvy population creates a real opportunity for fintechs and neobanks that can provide alternative, accessible financial services.

SME financing will continue to grow

SMEs make up the majority of businesses, yet they remain underserved by traditional banking structures. Over the next 12 months, we will continue to see strong global growth in financing for these businesses, enabled by digital platforms, alternative data and more streamlined processes. 

Digital lending for SMEs will also continue to grow, fuelled by the structural need for these services; data driven credit models that allow for greater accuracy and risk-aligned pricing; and the emergence of fintechs who tap into the need for faster and more flexible products.

Instant payments will become the norm

As customer demand for real-time settlement increases, instant payments are shifting from being a competitive advantage to an essential. This is supported by proactive regulations and new technologies such as real-time payment rails, API-driven open banking, AI for fraud detection and growing use cases of stablecoins for rapid cross-border payments. 

As instant payments continue to expand, we expect to see mass integration of these processes into commerce, logistics, HR and professional services. Those that embrace instant payments will be better positioned to improve cash flow, enhance the customer experience and streamline their processes.

David Becker, the founder and CEO, First Internet Bank

AI moving from pilot to production at scale

We’re well past the “let’s try it and see” stage with AI. In 2026, banks won’t just be experimenting—they’ll be operationalising AI across the enterprise. At First Internet Bank, we’re using AI to do more than speed up processes; we’re using it to make smarter decisions. Think predicting loan defaults months ahead or identifying market risks before we commit capital. That’s not theory—it’s happening now. And the real win? Freeing our people to focus on judgment calls and strategic thinking—the critical things machines cannot replicate.

Massive acceleration in bank M&A activity

Expect a surge in M&A next year. With a pro-business administration, easing rate environment and community banks looking for an exit without taking a balance sheet hit; it’s a perfect storm for consolidation. Smaller banks are under pressure: tech costs are rising and many still haven’t embraced AI or modern digital infrastructure. That gap is widening, and it’s going to drive deal flow. We’re already seeing early signs, but 2026 will be the year merger announcements become routine.

Fintech partnerships reaching maturity and profitability

The fintech shakeout is over. The players left standing know this is a regulated industry and have built products that work inside compliance frameworks. Frankly, many of these solutions outperform what traditional banks can build on legacy systems. Partnerships aren’t just about innovation anymore—they’re about survival and growth. At First Internet Bank, we’ve leveraged fintech relationships to strengthen liquidity and expand capabilities, and that model is becoming core to how banks compete.

Federal Reserve rate cuts and economic uncertainty

The Fed is navigating a complex landscape — tariffs, labour market shifts and global trade dynamics. Rate cuts are coming, but they’ll be measured. This isn’t the time for knee-jerk moves; it’s a time for data-driven decisions that prioritise long-term stability. Gradual adjustments give the economy room to absorb change without creating new shocks. In my opinion, that’s the kind of steady hand we need right now.

Buy Now, Pay Later as an emerging credit risk

Buy Now, Pay Later (BNPL) has exploded, but the lack of real-time reporting and fragmented oversight is a problem. A consumer can rack up thousands in BNPL obligations in a weekend, and no one sees the risk until it’s too late. While BNPL can expand access for those shut out of traditional credit, it also enables spending that may not be sustainable. Greater transparency and coordination between platforms could turn BNPL into a safer, more inclusive option that could eventually empower consumers and strengthen their financial stability, but until then, it’s a growing blind spot for lenders and regulators alike.

Hashim Toussaint, SVP and head of digital and open banking solutions, FIS

AI banking will go autonomous

2026 will be the year AI stops just alerting consumers and starts acting for them by blocking fraud, filing disputes, and managing transactions autonomously. Banks will need to navigate giving customers control over automation without making them feel they’ve lost the steering wheel.

Gen Z is rewriting the rulebook. 

Recent surveys show Gen Z is more likely to get money advice from social media than from their bank’s customer service line. Banks must show up where Gen Z already is, speak their language on financial literacy, and demonstrate transparent values to win customers for the next 50 years.

Rate reality and smart money moves.

Fed projections point to gradual rate decline to 3.4% by end of 2026, with mortgages hitting low-to-mid 6% range. Consumers should lock in high-yield CDs now before rates compress further, leverage subscription management tools, and automate savings intentionally while reviewing quarterly to avoid letting inertia cost money. 

Dr Brenton Cooper, CEO & Co-founder, Fivecast

Foreign threats grown at home demand new vigilance

Continued tensions in Eastern Europe, the Middle East, and Indo-Pacific are likely to spill over onto the home turf of AUKUS and European nations over the next 12 months.

We can already hear calls for greater vigilance from Five Eyes intelligence chiefs, such as Mike Burgess, the head of the Australian Security Intelligence Organisation (ASIO). He has been warning that Iran, Russia and China are recruiting criminals to conduct serious crimes and espionage.

In the UK, security minister Dan Jarvis warned in November 2025 about Chinese espionage activity, including the use of false recruitment specialists seeking people with access to insider knowledge in politics. He said the Chinese had a low threshold for the level of information they collect, as they use it to build a much bigger picture. 

Attempts by hostile nations to use online platforms to sow division and disrupt critical national infrastructure is also likely to increase. Elections in many countries, including the US mid-term elections, will lead to more misinformation campaigns. Efforts to exploit divisions over controversial policy areas such as migration – including small boat entry to the UK – will also increase.

As political and religious extremists who oppose democratic norms continue to use the web for propaganda, recruitment, and fundraising, agencies that do not enhance their online monitoring and detection will encounter increasing gaps in their intelligence efforts. 

Given the vast amount of data, policing and intelligence agencies are increasingly utilising advanced AI tools to analyse social media, niche online forums, and the dark web. Their goal is to identify and prevent serious illegal activities, many of which are planned or executed by their own citizens. Traditional manual methods are no longer sufficient, and relying solely on analysts is unfeasible due to the scale. The era of AI-driven open-source intelligence has begun. 

2.

Businesses are more likely to protect themselves with advanced intelligence

The threats businesses encounter are expected to grow more complex as more nations devote resources to commercial espionage, according to security leaders like Mike Burgess, head of ASIO in Australia. 

Malicious activity extends beyond just stealing intellectual property; it also involves exfiltrating information about deals or negotiations that could benefit the perpetrator’s country. Criminals may also target customer data. Additionally, as observed, foreign governments can organise direct actions, violence, and criminal damage targeting businesses. 

In the UK, for example, five British men were sentenced in July 2025 for organising and carrying out arson attacks against Ukrainian-owned businesses. Groups linked to Israel have also been targeted by criminal damage. The threats posed by climate change and animal rights extremists add to the pressures faced by businesses of all sizes, especially multinational corporations. 

A similar set of threats led one of our clients, a global resources firm, to adopt AI-powered open-source intelligence tools. These tools enable early warning of scams and digital threats targeting high-profile executives, as well as the detection of threat actors mobilising against the company and its facilities across social media and niche platforms. 

More companies are expected to recognise the benefits of leveraging AI open-source intelligence platforms to proactively counter threats. These tools can automate the monitoring of text, images, and videos, detect hostile online narratives across multiple languages, and connect individuals or networks. Such insights will allow them to enhance physical security measures, especially where protests or unauthorised site access are anticipated by colluding activists or groups. 

3.

Online foresight means forces are better prepared

In the defence intelligence communities of NATO and its allies, open-source intelligence (OSINT) will join AI and advanced analytics as part of the standard toolset for an all-source intelligence strategy.

Many are learning lessons from Ukraine about how to use open-source and social media intelligence before and during armed conflicts. The Ukraine war’s early phases saw the use of OSINT from analysis of masses of online data which provided important images of columns of Russian tanks and vehicles on the move. The net effect was to hugely augment situational awareness on the ground for the defenders.

Unauthorised or careless use of social media has enabled the enemy to track geolocation and identify units, leading to severe consequences. Ukrainians obtained valuable social media intelligence (SOCMINT) from images and videos of soldiers, equipment, and infrastructure shared on Russian platforms like VKontakte, as well as Telegram and TikTok. Conversely, on the Ukrainian side, at least one tank crew member probably contributed to their own downfall by posting photos of themselves online.

Defence and intelligence agencies will need to manage the explosion in online data to extract highly valuable intelligence insights from multiple sources. They must advance the detection and prevention of crime, terrorism and hostile nation-state activity directed against defence assets before open hostilities, for example. That includes trends in disinformation campaigns.

This demands more than simply training OSINT specialists. Intelligence teams require AI-powered tools capable of analysing large volumes of publicly and commercially available data. As the world becomes increasingly interconnected, AI-driven OSINT allows intelligence agencies to identify behaviour patterns that traditional methods might miss.

4.

Ethical AI to bring online crime out into the open

Generative AI is making threat-policing harder – and that is only going to increase. Criminals use this evolving technology for improved accuracy of phishing campaigns, and for deepfake voice and video impersonation in fraud, money-laundering and other scams.

Thanks to AI, hostile states no longer have to rely solely on criminalised data experts and hackers for their attacks. It is becoming increasingly simple to develop sophisticated disinformation campaigns. 

Generative AI will create much of the content for them and automate its delivery. This will present significant challenges for all organisations – not just government agencies – in the verification and attribution of content and communications they receive.

But AI is also on the side of the good people. Access to ethically-guided, AI-driven open-source intelligence (OSINT) will be crucial for early detection of groups involved in malicious activities. AI will assist authorities in understanding information flows and identifying when content is machine-generated, with OSINT providing additional context. It can give valuable clues about the identities of the groups or actors behind suspicious activities, helping organisations assess the threat. 

OSINT derived from publicly and commercially accessible sources offers behavioural insights that are not available through static databases or news outlets. Implementing ethical AI in OSINT allows organisations to combine this data effectively to meet various business needs, such as complying with KYC and AML regulations.

5.

In from the cold – open-source gets a seat at the intelligence table

Over the next 12 months we will continue to see how the fusion of intelligence sources and cross-disciplinary collaboration shape the future of intelligence. Open-source intelligence (OSINT), for so long viewed with ambivalence in certain corners of defence and intelligence, will emerge into the mainstream. Agencies will see the immense value in fusing traditional classified intelligence, derived from skilled field intelligence professionals, with OSINT.

Agencies will better understand how to use AI to correlate open-source and high-side classified intelligence at speed and at scale. These organisations will understand the full power of AI-driven OSINT platforms to identify threats across the deep and dark web and across the full range of social media channels.

The world has changed and threat actors are using these platforms very actively to recruit, transact, coordinate, influence, misinform and boast. A siloed approach to intelligence data is no longer viable, and more organisations will realise they need data fusion intelligence tools and AI-driven technology to harvest and analyse it, so they can stay on top of the full spectrum of risks.

OSINT will help police and border forces spot the bad apples earlier and faster

Vetting – whether for applicants to join intelligence and police services or for immigration and visas – will become a more critical area demanding increased efficiency.

This is an area where mistakes can cost lives. In the UK, we have seen how allowing the wrong people to join police forces or gain shotgun licences can have fatal consequences, as in the cases of murderers Wayne Couzens and Jake Davison.

Police and intelligence agencies will increasingly employ open-source intelligence (OSINT) tools to expedite procedures and enhance the precision of their social media and public data analysis about individuals. OSINT can identify risk indicators by examining the full social media footprint of someone in conjunction with other data sources. Human officers cannot manage this scale of analysis due to the millions of social media users, many with multiple accounts. For instance, vetting shotgun license applications in the UK is typically carried out manually.

AI-driven OSINT technology uses a huge range of sources, including media sites and identity databases, and is likely to become more attractive to agencies tasked with vetting hundreds of thousands of illegal immigrants and asylum applicants.

Customisable analysis in today’s more advanced solutions enables agencies to configure alerts, cutting out unnecessary noise. One of our customers – a national vetting agency in the Five Eyes intelligence network – uses our solution to accelerate the processing of 6,000 to 7,000 candidates per month. It has proved to be more than 20 times faster at resolving the online identity of an applicant than manual techniques. The agency saved roughly 35,000 hours in the first four months of operation.

This system integrates smoothly with existing digital workflows. It allows for quicker, more precise screening, helping officers identify unsuitable or suspicious applications early. Nevertheless, final decisions will still be made by trained officers in every case. 

From police to major companies, open-source intelligence technology will be more embedded

Integrating OSINT into daily workflows will gain momentum across various fields, such as insurance-fraud detection and processing applications for licenses or tenders in security-sensitive public sector areas. Manual methods will gradually decline.

AI-powered OSINT is expanding beyond police, immigration, and security vetting, increasingly impacting the corporate sector. Enhanced configurability allows organisations to automate the monitoring of numerous sources, including commercial databases, public records, millions of social media platforms, as well as the deep and dark web. Businesses can define content thresholds aligned with their interests and combine various detection tools to activate specific rules. 

Global companies are leveraging this technology to identify insider threats, scams, activist interference, and potential violent protests. Actionable insights are integrated into the workflows of key personnel, allowing them to make earlier, informed decisions by combining OSINT with other intelligence sources. For instance, insider risk monitoring can reveal sudden lifestyle changes or unexplained wealth that may indicate suspicious activity. Companies can then trace these individuals across the web and social media to identify additional concerning links. 

Companies can utilise this technology to screen job applicants and contractors, as well as to stay ahead of potential threats from hostile state, extremist, or activist groups that recruit and organise online. Integrating this technology into their standard digital workflows allows them to act proactively to safeguard people and property, greatly improving situational awareness.

More companies will recognise that integrating advanced OSINT technologies into their workflows enhances their resilience. 

Krik Gunning, CEO and founder, Fourthline

AMLR preparation urgency 

Whilst the AMLR doesn’t officially come into effect until July 2027, next year marks a critical preparation period for many organisations. 18 months may sound like adequate preparation time on paper, but the reality of effective implementation tells a different story.  

There is a concerning split in the market with some organisations ahead of the curve, having started their assessment processes and setting up the necessary frameworks for compliance; other businesses taking a ‘wait and see’ approach may be stung by the AMLR tail. And this will be the determining factor as to which financial institutions smoothly transition versus those that will scramble to comply.  

Organisations must work backwards to understand what AMLR requires and evaluate whether their current vendors can deliver compliant solutions within the timeline. Turning a 2027 problem into a 2026 priority is the only way forward. 

The great vendor migration 

We will see a regulation-driven mass migration of financial institutions away from a specific subset of vendors that cannot comply with the AMLR framework. Unlike typical vendor changes driven by a dissatisfied service, increase in cost or a more competitive alternative, this move will be forced from regulatory necessity. This creates an unusual situation where even satisfied customers will look for alternative solutions purely for compliance reasons. 

Over the next year, financial institutions, including banks and fintechs, must dedicate significant resources to evaluate their current vendors and migrate systems as needed. This will require a great deal of internal coordination between compliance, technology, and business teams.  

Those financial services institutions that delay this process are at risk of not having compliant solutions in place by July 2027, potentially face regulatory sanctions or will be forced into inadequate, but compliant vendor relationships. This also presents an opportunity for regulation technology (regtech) providers that have invested in AMLR-ready solutions to steal a march on competitors that are slow to adopt. 

Compliance as a competitive advantage 

Compliance isn’t, nor should it be viewed, as a burden. It’s an opportunity, a strategic differentiator. The Netherlands Minister of Finance, Eelco Heinen, cited that money laundering checks cost banks €1.4bn annually in the (tiny) country in the Netherlands, extrapolating that would amount to ~€45bn annually for the EU.  

Many financial institutions see compliance as expensive and a regulatory burden, and the goal was to achieve good enough compliance at the lowest cost. However, compliance is a value driver and a competitive advantage. It gives businesses lower operational and fraud costs, with a better industry reputation, whilst customers enjoy faster onboarding. 

2026 is the year to prepare for upcoming regulations and those financial institutions that build their internal culture and capabilities around compliance position themselves to quickly adapt to regulatory changes that come up. Whereas those organisations that view compliance as a burden, will constantly play catch up, and won’t have the luxury of choosing their vendor nor give them time for implementation and testing. This will likely determine which organisations thrive in this new regulatory landscape. 

Deepfake and synthetic identity fraud are growing concerns 

Deepfake technology and synthetic identity fraud are escalating threats for financial services institutions. Deepfakes use artificial intelligence (AI) to create convincing, but fake images, videos and audio. Synthetic identity fraud combines real and fake data to create a new and seemingly legitimate profile. What once required significant technical expertise and resources is now available through consumer-grade software.  

Successful deepfake and synthetic identity attacks lead to organisations being at risk of significant financial losses and reputational damage. It is essential for institutions to use sophisticated and multi-layered detection capabilities as effective deepfake detection cannot rely on a single control point. A multi-layered approach includes advanced liveness detection, biometric analysis, behavioural analysis, device fingerprinting, and document verification – each layer provides additional and robust protection. 

Karen Coe, Head of UK, Giesecke+Devrient

Banks and fintechs will evolve together 

Banks have previously approached fintech collaboration carefully, recognising that fintechs do some things really well, while other approaches don’t always fit the way banks operate. But signs of partnerships and a new age of innovative cooperation are starting to emerge. This was evidenced by the recent acquisition of digital wallet provider Curve by Lloyds Banking Group, showing a clear intent towards adopting modern fintech capabilities.  

The partnership could signal the start of the new age of banking, where banks and fintechs collaborate, combining their respective strengths to create innovative, more agile financial services. 

Physical branches are on the decline,  with thousands closing this year across the UK. With this in mind, banks and fintechs need will explore new ways to service customers at their convenience. One approach could be the creation of centralised hubs where numerous banks and fintechs share the same space. They would essentially allow customers of any bank to access services, including self-service card kiosks, 24/7.  

For fintechs, speed and seamless experience are their strongest currency. For banks, it is trust – and once that trust is lost, it is difficult to regain. Combine the two without compromising and next year could see partnerships that shape the future for fintechs and banks alike.  

Evolving fraud techniques with physical cards 

With AI on their side, finance-driven fraudsters will stop at nothing to target cardholders and steal their cash. The sophistication of scams, such asCard Not Present (CNP) attacks, is only set to increase next year and can drain funds at an unprecedented scale. 

For example, over £600 million was stolen and card-not-present (CNP) attacks increased by 22% in the first half of this year , according to UK Finance figures. 

As CNP attacks continue to rise, scammers find new ways to clone card information such as the card number, expiry date and CCV code without needing the physical card. Social engineering further enables scammers to bypass extensive security measures applied to modern-day cards by exploiting human behaviour – often using a combination of scams, phishing and impersonation. 

To address CNP fraud, physical cards need to evolve from a static tool into a dynamic, adaptive line of defence. We’re already seeing innovative detection and prevention mechanisms such as dynamic security codes being introduced to make the details useless to fraudsters if they are stolen. But there remains a push-and-pull between security and convenience. Everyday payments need to be kept fast and easy where possible, but high-value or suspicious transactions should be subject to more security checks to ensure banks, fintechs and consumers stay one step ahead of fraud. 

Andrew Bud, CEO and Founder, iProov

Operation sleeper cell: A bank to discover 1.2 million undetected synthetic accounts

In 2026, I predict a major bank will discover a large number of undetected synthetic accounts. While 2025 was defined by warnings of Gen AI-fuelled synthetic identity fraud, 2026 will be the year the true scale is revealed. I predict that a major bank will accidentally uncover “Operation Sleeper Cell”, an undetected network of over a million “sleeper” and “legend” accounts. The discovery will send shockwaves through the financial sector and force regulators to admit they have grossly underestimated the real scale of this threat.

The passkey paradox: 2026 triggers a “race to secure recovery”

Following the breakthrough adoption of passkeys in 2025, enterprises in 2026 will celebrate a massive reduction in phishing attacks. This success, however, will immediately expose a new, high-stakes vulnerability: passkey recovery. A major breach will be traced back to a threat actor exploiting a weak, legacy recovery process to take over an account. This will prove that the new “front door” is only as strong as its “back door” and trigger a massive industry shift, with high-assurance biometric verification becoming the compulsory standard for securing the passkey recovery lifecycle.

Richard Bernau Global Lead ESG, Banking & Capital Markets KPMG in the UK

There is a recognition that a sustainable and profitable business model means that the investment or lending portfolio is sustainable in its broadest sense, including climate and the environment. The emphasis is shifting away from compliance outcomes towards building and preserving value.

Owen Lewis Global Lead of AI in Banking and Capital Markets KPMG in Ireland

AI has moved from hype to a critical component of strategy in banking. Leaders are no longer dabbling — they’re scaling, driven by a clear recognition that AI is now central to operational resilience, customer trust, productivity and competitive edge. There’s an increasing belief that AI is not just about automating tasks, but about fundamentally reimagining how banks operate and serve customers.

Geoff Rush, Global Head of Banking and Capital Markets KPMG International

Given high operational and regulatory costs, scale (in terms of assets and customer numbers) is critical for banks to be able to spread these costs effectively, driving M&A activity. Banks are looking for deals that will expand their distribution capabilities, differentiate their value propositions and help them gain access to new markets/regions.
AI is no longer a side project for banks — it’s the engine driving operational resilience, customer trust, productivity, and future growth. The real differentiator isn’t just the technology, but how we embed it into our culture, governance, and talent strategy. The future of banking belongs to those who invest in people as much as in technology. Skilling, flexible work, and clear career pathways are now strategic imperatives — because AI’s true value is unlocked by empowered, adaptable teams.

Parijat Banerjee, Global Head of Financial Services, LatentView Analytics

Federated learning will move into production for fraud and AML consortium models.

Privacy-preserving collaboration will hopefully solve cross-bank data-sharing barriers; multiple 2025 pilots show readiness for real deployment.

GenAI should scale enterprise-wide only in hybrid governed form (rules + GenAI + auditability).

Regulators and banks will surely both prefer deterministic guardrails and “trusted knowledge” architectures before scaling GenAI into customer or risk workflows.

AI model-risk and regulatory frameworks ought to harden; banks have to show lineage, explainability, and inventory before deployment.

Supervisors globally are signalling stricter oversight and starting to apply existing model-risk rules directly to GenAI, forcing institutions to upgrade governance stacks.

Nima Montazeri, Chief Product Officer, Liberis  

Agentic AI will have its breakthrough moment in fintech

The biggest breakthroughs in 2026 will come from agentic AI systems that can observe, reason, act, and learn. These agents won’t just score risk; they’ll model multiple futures for a business and recommend the path that maximises growth. Multi-agent architectures will coordinate cash-flow analysis, risk evaluation, affordability checks, and market insight to provide a single, coherent recommendation in seconds.  

For SMB lending, this means dynamic credit lines, adaptive repayment plans, and funding that evolves with the business. Lending becomes less about “approve or decline” and more about guiding entrepreneurs through cycles of momentum, seasonality, and opportunity. The future isn’t just automated underwriting; it’s intelligent, collaborative financial decision-making at scale.

AI will start anticipating not just reacting in 2026

By 2026, AI in embedded finance will move far beyond automating underwriting; it will function as a financial operating system for small businesses. These systems will analyse partner data, open banking signals, and real-time behaviour to form a living, dynamic understanding of each business. The result is funding that’s personalised, predictive, and seamlessly embedded in the tools SMBs already use.  

Instead of reacting to cash-flow issues, AI will anticipate them, size offers appropriately, and help businesses avoid financial strain before it emerges. Access to capital becomes faster, fairer, and dramatically more inclusive, particularly for thin-file or non-traditional SMBs. In short, AI will shift embedded finance from a transactional model to a continuous, always-on source of support.

Melinda Roylett, Managing Director, Lloyds Merchant Services

According to Lloyds’ From Till to Table report, 77% of hospitality businesses say contactless is now the most requested way to pay. This shift reflects something bigger than convenience. It shows that reducing payment friction is now a meaningful part of the overall customer experience.

When paying is quick and intuitive, service feels more natural and uninterrupted. In fast-paced venues, even small delays can influence the feel of a customer’s visit. A smooth checkout helps teams focus more on people and less on processes.

Many businesses are now bringing their payment, ordering and reporting systems together to create a consistent experience from table to till. This is not about adopting technology for appearance or novelty. It is about enabling confident, efficient service that feels effortless to the customer.

As hospitality continues to evolve, the role of payment is increasingly tied to connection. Smarter systems help businesses respond quickly, understand customer preferences and strengthen relationships in the moments that matter most.

Griffin Parry, CEO, m3ter

The biggest pricing surprise: What 2025 taught us about hybrid models

Everyone talked about going pure usage-based in 2025, but very few did it. LinkedIn was full of announcements about companies going all-in on consumption, yet in practice nearly everyone deployed hybrid models, combining fixed subscriptions with usage-based components.
This was not a failure, it was inevitable. Hybrid pricing gives both vendor and customer a level of predictability that pure usage cannot, while still preserving the benefits of usage-based billing, such as scaling revenue with heavy users and protecting margins. Smart organisations recognised that hybrid was not a compromise, it was simply better design.

Systems challenges remain

However, 2025 exposed a crucial truth. Having some usage-based components is just as difficult as having all usage-based components. Many companies experienced friction across product, engineering, finance and marketing teams, even when they shared the same systems, because usage and billing data were trapped in separate systems.

When customers experienced bill shock, it was rarely a pricing problem. It was a data problem. Account teams could not intervene proactively, and revenue blockages emerged. Hybrid pricing worked in theory. In practice, companies underestimated what it took to execute.

Looking forward: What is coming in 2026

In 2026, companies will increasingly understand that success is not only about billing transparency. Transparency is now table stakes. The real requirement is modernising the entire quote-to-cash process. That means automating billing, eliminating revenue leakage, providing clear visibility, and enabling pricing agility.

Pricing agility has become a critical competitive advantage. AI-driven products and evolving business models demand continuous pricing adaptation, so set-it-and-forget-it is no longer a viable option.

Firms that run regular pricing experiments have seen conversion rates rise by 22% and lifetime customer value by 24%. AI features and evolving business models mean constant experimentation. You will not get pricing right the first time, or the fifth, or the tenth. Winners will be companies whose systems accommodate rapid iteration.

The market is becoming more sophisticated. Organisations are learning to distinguish between:

Complex – unpredictable and confusing;
and Complicated – intricate but conceptually clear.

Hybrid pricing is complicated, not complex, and B2B buyers will embrace it.

Billing experience as offence

In 2026, billing experiences will be viewed as an offensive capability rather than a defensive necessity. Reliable billing infrastructure allows companies to reach out proactively at the right moment, building trust and reinforcing ROI.
Usage dashboards make consumption visible and value tangible. They turn raw usage into clear insights, helping customers understand spend, optimise resources, and see ROI. Billing shifts from being a source of anxiety to a strategic tool.

CFOs and the modernisation imperative

For CFOs, the calculus has shifted. Modernising billing infrastructure once looked like a potential career-ender, expensive and disruptive, so they delayed.

CFOs increasingly recognise that modernisation isn’t optional. The biggest risk is now inaction, not implementation. The encouraging news is that when approached correctly, modernisation is reliably achievable.

Next-generation billing infrastructure works largely behind the scenes, enhancing existing CRM and ERP systems without wholesale replacement. Early adopters are proving the model, and success stories are accumulating. Think cloud migration a generation ago – the market is early, but clear patterns are emerging.

By year-end 2026, companies with pricing agility will visibly pull ahead. The winners will be those who recognise that successful pricing is a combination of strategy and systems and invest in both.

Alex Taylor, UK Managing Director, Mangopay

Stablecoins will take a clearly defined place in the payments stack 

Stablecoins have evolved into utility-first, currency-dominated payment rails used every day. In 2026, their long-term role in e-commerce payments will be selective, not sweeping. Looking ahead, we’ll see stablecoins gain traction where they genuinely outperform existing methods. That means cross-border commerce, high-volatility markets, and digital-first environments where predictability, speed, and low-cost settlement offer meaningful advantages over traditional rails. 

A critical factor shaping their future is privacy. Stablecoins operate on transparent, public blockchains, and once an identity is linked to a wallet address, the trail is visible. This means they currently don’t offer anonymity by design – they will need to evolve within a tightly regulated, data-sensitive framework if they are to play a mainstream role. 

Incentives will also support driving early user adoption, echoing the trajectory of open banking. Merchants experimenting with stablecoin payments may offer discounts or loyalty benefits, while fintech platforms will begin to treat stablecoins as an integrated feature enabling storage, conversion, and wallet-to-wallet flows. 

Programmable wallets will take this a step further, becoming one of the most impactful applications of blockchain in commerce, allowing platforms to automate complex fund distribution across both fiat and crypto rails in a single environment. For payment providers, this means integrating new layers of infrastructure to stay competitive. Throughout, trust in both the peg and the underlying financial system will remain the foundation on which stablecoins stand.

Multi-currency accounts will power global platform expansion 

In 2026, multi-currency virtual accounts will likely move from a helpful add-on to a core pillar of global payments infrastructure. They enable platforms to “stay local, go global” by collecting and holding funds in multiple currencies, plugging into domestic rails and delivering a familiar local payment experience without rebuilding systems for every market. Their value proposition is still not fully understood across the industry, and more education is needed, but that is likely to change. 

As platforms expand internationally, these accounts address the fragmentation that comes with regulation, tax and user expectations. By giving each buyer or seller a local account identity (a DE, FR, GB, US or CA IBAN, for example) users feel like they’re paying and getting paid “at home.” This preserves local formats and payout norms while the platform retains a single wallet-based view of all flows. The result is fewer errors with cross-border transfers, reconciliation, and lower FX-related friction, and a payment experience that feels consistently local. As the model matures, its role will extend well beyond simple collection. 

I expect multi-currency virtual accounts to evolve into multi-purpose infrastructure. The same underlying wallet will support account-to-account payments, local collection and local payout in one system. A buyer may pay from Germany and another from Canada, but the platform sees named virtual accounts tied to users or use cases. That unified view will simplify reconciliation, FX and reporting, even as front-end payment options continue to diversify.

Immad Akhund, co-founder and CEO, Mercury

The AI boom keeps running because real usage keeps climbing.

I think 2026 looks a lot like 2025. The economy stays strong because demand for compute keeps rising and GPUs and power are still the real constraint. We are not close to the point where supply catches up. People keep asking when the AI bubble pops and my view is that it will not happen next year. If it pops, we do not just get a tech winter; we get a real + big economic recession.

Seed valuations stay high while non-AI steady companies don’t get funding.

Seed valuations for hot AI companies doubled in the last year. I do not think they double again in 2026, but I do think they stay elevated. Underneath that is a long tail of good non-AI first companies that get no attention. They grow responsibly but struggle to raise because they are not AI first. Some will pivot successfully and some will shut down, even with real customers.

Copycat AI startups hit a wall.

Many founders are building the same idea with the same model and the same underlying foundation models. These markets turn into price wars with thin margins. Very few will break out. The real upside is in categories people are ignoring. If you are the 10th company in a hot space, you are signing up for a tough road. The companies that win will have unique insight in a category that has not been touched yet.

996 culture loses steam because the output is not real.

We used to call it hustle culture, but this year it was rebranded to 996. Outside of short sprints (<3 months) I have never seen anyone produce long term quality work for 6 days a week + 12 hours in front of a screen. Actual output is similar to a normal day. VCs often push this culture more than founders, which fuels the perception that extreme hours are required. It’s not sustainable, and it signals that a company is not building a culture for the long term.

Payments get embedded into AI in 2026.

Consumer AI becomes transactional. I already use ChatGPT to pick hotels and the obvious next step is telling it to book the room. In existing large fintechs the bigger shift is on the back end. Fraud reviews, onboarding, and workflow operations are full of tasks that agents can now handle. No one has nailed this yet, but the technology is ready, and we will see real production use in 2026.

Founders expect a full financial OS, not just a bank account.

In the startup world, founders want cards, spend management, payments, invoicing, and automation from day one. A simple bank account no longer feels competitive. Mercury helped set this expectation and the shift continues to expand. SMBs are still served mostly by big banks with basic accounts, but this is shifting.

Eric Huttman, CEO, MillTech

After another year defined by currency volatility and the highest FX volumes on record, corporates can no longer treat currency risk as a background issue. Tariff-driven market uncertainty may be cooling, but geopolitical tensions remain, and 2026 will continue to demand an agile approach.

Hedging is getting expensive, with costs increasing by an average of 66% in the UK and 76% in North America. Yet despite operational cost pressure and tightening credit conditions, more corporates are hedging than ever. 78% of UK corporates and 91% of North American firms now hedge, recognising that the cost of protection is still far less than the price of exposure. 

In 2026, corporates will have to do more with less. Budgets are tightening, and AI and automation will be central to optimising hedging. CFOs and treasurers will adopt technology to eliminate manual processes, centralise workflows, and enhance execution efficiency. 

In terms of hedging strategies, the majority of UK and US firms believe central banks will hike interest rates in their respective jurisdictions next year. This growing clarity in economic policy direction means more than 90% of corporates are planning to raise hedge ratios and extend hedge lengths as they look to proactively lock in protection against further market disruption.

Wasim Khouri, Chief Commercial Officer, Monument Bank 

Technology is democratising ultra-high net-worth products for the mass affluent 

Borrowing against an investment portfolio used to require £5m+ and a private bank relationship manager. It wasn’t possible to handle manual underwriting and bespoke agreements below this amount, leaving it as a product accessible to the very few. That’s now changed. Automated valuation models, real-time portfolio tracking, and brokerage APIs mean platforms can profitably serve £100k-£2mil portfolios – aka the mass affluent.  

This group, several million strong in the UK, is increasingly frustrated by the limited borrowing options available to them. They understand leverage, follow the markets and feel that standard retail products do not reflect the complexity of their finances. They see how secured borrowing works for higher-value portfolios and want access to similar structures. Many are professionals with strong income profiles and excellent repayment records, yet they face high and inflexible rates on products such as car finance. At the same time, they often hold equity portfolios, for example within a stocks and shares ISA, and the ability to borrow against these at far lower rates than a dealership loan would be game changing for them. 

Democratising Lombard lending is just the first step. Huge chunks of the private banking playbook are now ripe for disruption.

Fiona Pollard, Chair of Monument Bank  

Banking’s moving from one-size-fits-all to hyper-personalisation in customer cohorts 

Monzo, Revolut, and Starling showed customers would abandon legacy banks for tailored experiences. Their mass market model is increasingly encountering friction – with universal models struggling to deliver the depth wealthier customers require. 

Companies are taking the neobank playbook and going deeper. Broad-bucket segmentation, like retail, private, and wealth, is increasingly outdated as banks need to understand customers, not strand them in a neat category. This is where the mass affluent sit: too complex for retail banks, too small for private banks.  

With 2,500+ FCA-approved fintechs, the future belongs to banks that serve specific segments deeply, with hyper-personalised experiences based on behaviour patterns. Think Coconut for freelancers, Tide for SMEs, or Zopa targeting creditworthy borrowers. 

The most successful banks of the next decade will own tightly defined, high-value segments and serve them brilliantly.

Eddie Harrison, Chief Growth Officer and Co-Founder, Navro

Workforce Payments 

2025 has seen a meteoric rise in hype relating to stablecoins. Yet, in tandem, we have seen how this has contrasted against a tough regulatory reality. 

Despite a desire for broader adoption, tax authorities and legal tender laws in major global economies have a lot of work to do to ready themselves to support net salaries in crypto. 

As we move into a new year, we expect that we will see global workforce payments falling into two distinct channels. While traditional fiat systems will remain a mandatory foundation for formal payroll and regulatory compliance, stablecoins will rapidly become the dominant standard for contractor payments and cross-border remittances, particularly in emerging markets. However, organisations will no longer need to pick between one rail over another, instead, global organisations will be able to bridge this divide through opting for a single payments stack. 

Off-ramp consolidation 

Despite stablecoins becoming more mainstream, the process of local currency conversion continues to be a sticking point, with ongoing friction and regional fragmentation. This is consequently making it more challenging for global enterprises to trust in stablecoins for seamless, scalable last-mile payouts. 

It is likely that over the next 12-24 months we will see an increase in market consolidation, whereby a select group created as a result of M&A activity will directly shape infrastructure standards. In parallel, non-banks and Real-Time Payment (RTP) networks from emerging markets will increase their adoption of stablecoin capabilities. As these foundational rails mature, the ability to curate and connect off-ramps into a single platform will become a competitive advantage.

The institutional pivot to tokenisation 

We are beginning to see attention move away from theoretical Central Bank Digital Currencies (CBDCs) toward stablecoins and tokenised deposits as the real drivers of financial innovation. 

Moving into 2026, we expect that global transaction banks will operationalise these digital rails for treasury and FX management. This move – driven by the need to secure deposits and provide 24/7 liquidity – will dramatically increase the urgency for corporate clients to conceptualise and integrate these new, complex banking layers.

AI

As organisations further embed AI into their DNA throughout the coming year, fraud prevention will consequently undergo a major maturity shift. AI will move beyond generalised intelligence to specifically structure the messy, unstructured data located in scattered systems and PDFs, allowing FinTech’s to build more comprehensive customer risk profiles.  Simultaneously, AI governance will face a critical challenge, forcing compliance teams to reboot their strategy – shifting from monitoring consent (which employees can bypass by switching off recordings) to establishing robust, non-bypassable frameworks that secure the full context of the organisational conversation.

Laurent Descout, CEO and co-founder, Neo

Stablecoins will continue moving downstream into traditional finance

Stablecoins are no longer just niche crypto innovation. They have moved to a mainstream financial tool, with real-world use cases including digital commerce, on-chain settlement and cross-border payments. Regulatory frameworks and legislation in the US and Europe, such as the GENIUS Act and MiCA have helped inject legitimacy and structure.

In cross-border payments, stablecoins can facilitate near-instantaneous transactions at significantly lower cost, unlike traditional bank transfers, which can take up to five days and involve multiple intermediaries. Over the next year, adoption will move beyond crypto-native users to broader financial flows, embedding stablecoins more deeply into traditional finance.

Growth of AI in finance and accompanying regulations

AI is no longer optional in payments; it’s becoming essential. This is being driven not only by consumer and business expectations, but also by legislation and regulatory frameworks in the US and Europe, including the EU Instant Payments Regulation and industry-wide initiatives such as SWIFT’s ISO20022 migration. 

By introducing richer, more structured data, ISO20022 makes AI and advanced automation critical for analysing transactions, detecting fraud, automating compliance, and improving operational efficiency.

From processing transactions to powering chatbots for fraud detection and compliance, AI has become commercially imperative across the payment industry.

However, banks and fintechs need to remember that AI is not a silver bullet. Poor implementation can be ineffective or even introduce new risks. PSPs should strategically evaluate the most effective use cases, such as streamlining document analysis or automating repetitive tasks, rather than applying AI as a blanket solution across all areas of business.

Payments will continue to lead the fintech charge

From Stripe to PayPal, many of the most well-known fintechs are in payments. This trend will continue throughout 2026, driven by the rise of instant payments and fintechs’ ability to balance regulatory change, innovative products, internal politics and risk-averse models.

Emerging regulations will support this growth. In the UK, the National Payments Vision is designed to create a world-leading payments ecosystem by establishing governance frameworks, upgrading infrastructure and reforming rules to reduce congestion. This will support the continued expansion of the payments fintech ecosystem, boost competition and set the stage for the next phase of innovation.

ISO20022 migration unlocks the next phase of cross-border payments

The ISO20022 migration deadline of November 2025 won’t be the finish line. It’s really the starting gun. Switching formats is the easy part. The real change comes in 2026, when banks and PSPs begin leveraging ISO20022’s richer data to automate compliance, cut manual processes, and deliver transparent cross-border payments. That’s where the industry will see the real return on this investment.

Next year, attention will shift to the new wave of SWIFT initiatives, from Case Management to SWIFT GO and Pre-validation. They may be less dramatic than the migration itself, but they tackle long-standing issues: friction, opacity and slow resolution times. Together, they will move the industry meaningfully closer to fast, predictable global payments.

Beyond traditional rails, stablecoins and CBDCs will remain in the spotlight. The momentum is real, but the path is still uncertain. ISO20022 provides the shared data foundation needed for any future where digital money and traditional payments coexist.

David Tattersall, Area Sales Director, NCR Atleos

Looking ahead to 2026, retail banking is moving past short-term fixes and into a period where infrastructure choices will define competitiveness. Deposit-capable ATMs in retail locations are proving their value almost immediately; they absorb both cash-in and cash-out demand, extend service hours, and give banks a practical way to maintain presence without the operating costs of a branch. When these devices are placed in supermarkets or high-footfall retail parks, usage patterns shift overnight because customers naturally prefer to bank where they shop.

For 2026, the competitive edge will come from the quality and reliability of that self-service layer. Banks need infrastructure that can scale nationally, integrate cleanly with their existing estate, and handle routine transactions with minimal friction. The more unified and tech-driven the network becomes, the more resilient it is.

What’s clear is that retail-based, technology-led cash access is no longer an add-on, it’s becoming the core of how everyday banking is delivered.

Helen Child, CEO and Founder, Open Banking Excellence

Smart data – Building trust and defences to scale

The UK’s Smart Data ecosystem is at a pivotal moment. With the passage of the Data Use and Access Act (2025), the government has laid the groundwork for a truly data-driven economy – evolving from Open Banking to Open Finance and beyond.

Yet as opportunity accelerates, our defences lag our ambitions. Smart Data can only thrive if consumers trust it. This means building security, resilience, and accountability into the ecosystem from day one.

We must protect customers, not retrospectively but pre-emptively – closing the stable door before the horse bolts.

The next phase of Open Finance will only scale if it is safe. That’s why we believe in 2026 we will see more focus on third-party risk protections and more work to expand ecosystem security through greater cross-industry collaboration.

Let’s enter this new era prepared, protected, and with our eyes wide open.

AI and open finance – From insight to intelligence

Artificial Intelligence will become the engine driving the next chapter of Open Finance.
2026 will see AI move beyond analytics to autonomous financial intelligence – interpreting real-time financial data to predict, prevent, and personalise.

AI will:

• Detect and deter fraud faster than humans ever could. As a result, we expect to see enhanced transaction monitoring tools, increased detection accuracy and reduced false-positive incidents.
• Anticipate consumer needs and offer hyper-personalised financial guidance. Banks at the forefront of this trend will be able to offer personalisation at scale, giving retail customers the same level of service as private banking clients.
• Empower regulators and policymakers with real-time market insight. This will help regulators stay ahead of market trends and enable policymakers to better balance customer protections with innovation.

As AI deepens its reach, ethical data use and governance must keep pace. Financial services organisations must take steps now to create adequate risk frameworks to safeguard customers and ensure AI is being deployed appropriately.


The winners will be those who combine innovation with integrity – using AI not just to make finance smarter, but safer for all.

Steve Kramer, VP of Product, PayNearMe

AI-driven orchestration & experience management

In 2026, the payments industry will shift its focus from adding rails to engineering intelligent flows that optimise for completion. AI is already determining not just which payment options to surface, but when and through which channel. The next step is generative AI agents acting on customers’ behalf rather than simply presenting choices.

Bots as true payment assistants

In 2026, we’ll see agentic AI turn payment interfaces into genuine assistants. Rather than routing customers to FAQs or hold queues, these systems will check balances, update payment methods and walk someone through a transaction in real time. This will result in higher digital self-service adoption rates and lower call centre volumes. 

When every inbound call carries real cost, even modest deflection rates translate into measurable savings. But the bigger opportunity is designing payment journeys that anticipate needs and resolve friction before a customer ever thinks to pick up the phone.

Invisible, adaptive journeys

In 2026, we’ll start to see the invisible, adaptive payment model that Uber perfected extend into bill pay and lending. AI will embed payment prompts into familiar apps and workflows, with timing, channel and method tailored to each customer. The static portal experience will give way to journeys that optimise themselves continuously based on payment behaviours and likelihood of completion. The seamless experience consumers expect when stepping out of a rideshare will become the standard for loan repayments, utilities and other recurring obligations.

Silvija Krupena, Director of Financial Intelligence Unit RedCompass Labs

Fraud prevention slipped backwards in 2025, just as criminals have industrialised their operations. The momentum of 2024, driven by rising losses, fast-evolving scam models and growing recognition of the threat, has not carried into 2025. The delay to the National Fraud Strategy leaves millions exposed, and signs that platform accountability may be softened are deeply concerning. Fraud begins online. Any strategy that avoids that reality is not a strategy.

UK Finance reported £629.3m stolen in the first half of this year, an increase on 2024. Behind that figure are people whose savings, relationships, mental health and sometimes lives were taken by organised criminals operating with near-total freedom across social media, messaging apps and telecom networks. Banks are fighting back, but the fastest-growing scams, like investment, romance and impersonation fraud, are designed to bypass the banking system entirely. 

In 2026, we must shift the fight upstream. Tech platforms and telecoms need to stop fraudulent ads, cloned sites and fake accounts before they reach the public. Whistleblower claims that a significant portion of Meta’s ad revenue is tied to illegal activity show the scale of the problem. When companies profit from the same digital spaces where victims are targeted, accountability cannot be optional. The EU’s decision to require platforms to compensate victims is an important milestone.

Fraud is now one of the UK’s largest criminal revenue streams and the most common crime affecting the public. Treating it as a payments issue has never made sense. The priority must be a whole-ecosystem response. We need upstream responsibility, stronger digital safety standards, better data sharing and major public awareness efforts. To protect the public, we must disrupt the system that enables fraud to spread so quickly in the first place.

Pratiksha Pathak, SVP, Head of Payments – UK, RedCompass Labs

2025 marked the moment the payments industry shifted from experimentation to execution. SEPA Instant gained real traction, the Eurosystem’s plan to link TIPS with India’s UPI signalled a new phase of global interoperability, and regulators across the US, EU and Canada took concrete action to bring stablecoins into the mainstream. The year concluded with a landmark event: the end of MT–MX coexistence. After two decades, cross-border payments are finally being required to speak a modern, structured, data-rich language.

But it’s important to recognise that much of this year’s progress has been tactical—a race to hit deadlines, apply quick fixes and keep legacy systems compliant. That phase is ending. Organisations are now stepping back and asking harder questions: can technologies built 40 years ago really support the next generation of real-time, intelligent payments? Increasingly, the answer is no.

In 2026, payments modernisation will remain at the top of the agenda, but the conversation will change. The industry is moving from incremental upgrades to fundamental redesign. AI will be the catalyst. It will enable sharper fraud detection, more adaptive compliance, and faster, data-driven decision-making—capabilities that simply aren’t possible on legacy architectures.

Banks that integrate AI-powered insights directly into their payment flows will separate themselves from the pack. They won’t just meet regulatory expectations—they’ll improve margins, reduce operational drag, and create more compelling customer experiences. Those that do not move quickly risk falling behind as payments becomes a real-time, intelligence-driven utility.

2026 will reward the institutions that treat payments as a strategic differentiator, not a cost centre. The competitive gap between modernised and non-modernised banks is about to become very visible.

Oliver St Clair-Stannard, VP, Payments AI Strategy & GTM, RedCompass Labs

The pace of change in payments this year has been unprecedented, and 2026 will move even faster. Over the past 12 months, we’ve seen AI shift from experimental to operational. In 2026, payment teams will routinely use AI models trained on institutional knowledge and bank documentation that, until recently, was inaccessible to large language models. 

AI assistants, powered by multi-agent systems engineered for accuracy over speed, will prepare, review and deliver modernisation documentation in a fraction of the current time. Analysts will spend less time typing and more time designing and validating. Those that deploy Applied AI tuned specifically for payments and guided by domain experts will cut costs and project timelines in half.

Banks that embraced AI in 2025 are already accelerating transformation programmes and moving ahead of competitors. Those that hesitated will now face higher costs, slower change and growing pressure from faster-moving rivals, creating a large gap between first movers and laggards.

If banks harness the billions already invested into AI technologies, apply sector-specific training and combine it with expert oversight, they have a genuine chance of keeping pace. Next year, the winners will be using AI intelligently, for the right problems, with the right expertise behind it.

Leo Labeis, CEO, REGnosys

London as a FinTech / RegTech Hub 

RegTech offers a huge growth opportunity for all financial hubs, with the global market expected to reach $85bn by 2032 as the need for smarter compliance solutions is only growing. Firms increasingly recognise that investing in RegTech is not just about meeting regulatory obligations, but also about reducing risk, improving operational efficiency, and unlocking strategic value. 

London has long been a global fintech hub, but recent trends show a mixed picture for the sector. While the City remains close to New York in overall financial centre rankings, other hubs are catching up in fintech innovation. With targeted government support, the UK can scale home-grown RegTech innovations, maintain its competitive edge, and secure its position at the forefront of global fintech. 

Global regulatory reporting 

Over the past two years, major regulatory rewrites across Hong Kong, Canada, the US, Europe, the UK, Japan, Australia, and Singapore have challenged reporting firms worldwide. This is expected to continue into next year with further updates expected from the CFTC, SEC, ESMA and FCA.  

These reforms are implementing initiatives to harmonise reporting standards across the G20 and improve market transparency. While increasing compliance demands, they have also accelerated RegTech growth, underscoring the need for firms to adopt digital, standardised solutions that enhance reporting quality, reduce operational risk, and turn regulatory obligations into strategic advantage.

Increasing complexity and the solution 

Regulatory complexity continues to rise. The need to report complex lifecycle events increases the risk of inconsistent interpretations for firms. Dual-sided reporting requirements like SFTR or EMIR compound the problem by adding costly reconciliations. These challenges highlight the need for mutualised, standardised approaches to reporting and demonstrate why legacy, siloed systems are no longer sustainable in today’s fast-moving financial markets. 

Digital Regulatory Reporting (DRR) and the Common Domain Model (CDM) have moved from experimental pilots to operational adoption across multiple jurisdictions. By standardising inputs and coding rule interpretations once for market-wide use, firms can ‘report once, trust always,’ improving data quality, reducing compliance costs, and turning regulatory reporting into a source of strategic insight rather than a tactical burden. 

As the pace of industry adoption continues to pick up in 2026, we expect firms to require further extensions in DRR. The addition of SFTR for the securities finance markets, the implementation of MiFID III, which is due to start next year, and coverage for cross-jurisdiction reporting eligibility will be major areas of focus in 2026.

Michel Lowy, Co-Founder and CEO, SC Lowy

Why Asia-Pacific is the next frontier for private credit

Private credit in Asia-Pacific is entering a pivotal stage in its evolution. What was once viewed as a niche alternative to traditional bank lending is rapidly becoming an essential pillar of the region’s corporate financing ecosystem. A confluence of factors is driving this shift: ongoing retrenchment by commercial banks toward only the largest borrowers; tighter regulatory oversight, consolidation among regional banks; divergent country-level banking regimes; and a growing need for bespoke, flexible capital across a still-developing and highly fragmented market. In this environment, private lenders are assuming an increasingly central role in addressing funding gaps and enabling corporate growth.

Although the United States and Europe continue to represent the most mature private credit markets, the Asia-Pacific opportunity set is expanding at a pace unrivalled by other regions, both in terms of scale and breadth of situations available to lenders. For disciplined managers with deep local presence, 2026 marks the early phase of a new multi-year allocation cycle into Asia, characterized by wider, more specialized, and more compelling opportunities than in prior periods.

Five forces in particular are set to shape the next stage of private credit’s evolution in APAC.

APAC growth will outpace the West – but fragmentation will define the market

Asia-Pacific is on track to deliver the fastest private credit growth globally in 2026, albeit from a smaller starting base. Market saturation and intense competition are compressing returns in Western markets, while access points in Asia remain less crowded and more varied.

What was once a market defined by Australia, Japan and India, is now broadening into South Korea, Malaysia, Thailand and parts of Southeast Asia, each offering distinct demand drivers and return profiles. However, this growth is accompanied by complexity. Unlike the more standardised US and European markets, APAC remains jurisdictionally diverse, with varied legal systems, tax rules, creditor protections and insolvency frameworks. Underwriting and enforcement require deep local expertise. Much of APAC’s deal flow also hinges on local origination where longstanding regional relationships materially improve sourcing quality, monitoring and downside protection. In this environment, execution and relationships matter more than scale. Lastly, Asian private banks, family offices, and semi-liquid vehicles are accelerating flows into private credit, driving AUM growth and deepening the investor base.

In short, APAC’s private credit ecosystem is expanding in depth, breadth, and sophistication, and moving in a structurally different direction than the sponsor-centric Western markets.

Real assets, digital infrastructure and the energy transition will drive borrowing

Corporate and asset-level financing needs remain elevated across the region. Demand for private credit in 2026 will be concentrated in capital-intensive sectors where banks have meaningfully retreated. Real estate remains a core driver, particularly in Australia, South Korea, India, Hong Kong, and Southeast Asia. Significant refinancing walls, tighter bank regulation and constrained balance sheets have created persistent demand for development finance, bridge loans and transitional capital, especially in residential, logistics and mixed-use projects. At the same time, the rapid digitalisation of Asian economies is driving investment in data centres, fulfilment networks, and telecom infrastructure. These assets require long-term, flexible financing that private lenders are often better positioned to provide.

Energy transition is another major catalyst. Government decarbonisation targets continue to outpace bank lending capacity, pushing renewables, battery storage, grid upgrades and distributed energy solutions toward private capital sources. Healthcare, pharmaceuticals and segments of industrial and manufacturing activity in South Korea, India and ASEAN markets are also contributing to a deep and diversified opportunity set.

Higher-for-longer rates will enhance returns while testing credit quality

The return potential for private credit in 2026 continues to be shaped by elevated base rates and persistent inflation, despite an environment where rates continue to move lower. Although policy rates are trending lower in several major economies, all-in borrowing costs remain structurally above pre-2022 levels. Select markets, such as India, are operating with policy rates near multi-year lows relative to their recent tightening cycles, supporting continued credit demand and attractive risk-adjusted spreads. For lenders, this environment continues to drive compelling nominal yields and stronger cash-on-cash returns on newly originated, predominantly fixed-rate loans. The persistence of higher real rates, combined with disciplined deployment into credit-constrained markets, is likely to sustain durable return potential throughout 2026.

At the same time, higher financing costs are exerting pressure on corporate margins, particularly for mid-market and non-sponsor-backed borrowers. Refinancing risk is rising, and stress is expected to materialize unevenly across sectors.

Real estate and discretionary consumer businesses remain more vulnerable to rate sensitivity and liquidity pressures, while essential services, infrastructure, and contracted-revenue businesses continue to demonstrate greater resilience. These conditions heighten the importance of conservative leverage levels, strong covenant packages, first-lien seniority, and rigorous stress-testing. In Asia, where secondary liquidity remains limited, managing downside risk through structure and discipline is critical.

Overall, a higher-for-longer rate backdrop enhances return potential but reinforces the need for selective underwriting, sector specialisation and continuous portfolio surveillance.

Capital is moving east despite APAC remaining structurally under-allocated

Global investors are expected to gradually increase exposure to Asian private credit over the next two years, driven by the search for yield, diversification and uncorrelated return streams. Greater education and familiarity with Asia have also reduced perceived barriers. Slower exits and lower distributions in US and European credit funds are further reinforcing this reallocation trend. However, even with rising inflows, APAC remains significantly under-allocated compared to Western markets. This imbalance continues to support attractive spreads, lender-friendly documentation and bilateral deal opportunities that are less prevalent in more competitive regions.

Importantly, regional capital is also stepping up. Sovereign wealth funds, pension schemes, insurers and family offices across South Korea, Singapore, Hong Kong, Australia and Southeast Asia are becoming more active participants. Their increasing willingness to commit to experienced regional-focused fund managers and co-invest alongside them is deepening market liquidity and reducing dependence on Western capital sources.

Private credit will become embedded in Asia’s financial ecosystem

In 2026, Asian private credit will no longer be peripheral. It will be an established, mainstream source of financing sitting alongside banks and capital markets. The asset class is benefiting from improved governance and institutional participation, while still preserving the flexibility needed to navigate diverse jurisdictions. Over time, broader sector coverage, improved regulatory and enforcement frameworks, and gradual development of secondary markets will continue to strengthen confidence among institutional and wealth-channel investors.

The managers best positioned to succeed will be those that maintain a strict focus on first-lien, senior-secured strategies, prioritise local origination, and apply disciplined underwriting. In APAC, sustainable alpha is created through execution, not leverage.

Looking ahead

Asia-Pacific’s private credit is transitioning from a niche opportunity to a foundational component of global private credit portfolios. The landscape in 2026 will be defined by rapid evolution, structural inefficiencies and selective opportunity. The convergence of bank retrenchment, capital-intensive growth sectors, rising regional capital pools and financing gaps makes this one of the most compelling private credit environments globally. For managers with deep local knowledge and sourcing expertise, patient capital, and a conservative mindset, APAC does not merely offer growth potential, it offers the opportunity to build durable, repeatable returns in an increasingly unpredictable world

Aaron Harris, CTO, Sage 

CFOs take the lead on AI assurance 

AI is already in the room influencing how teams plan, how customers are supported, and how finance gets its work done. As this technology plays a bigger role in day-to-day decisions, there’s a growing expectation that CFOs will take accountability for how they behave: whether the data is sound, whether the recommendations make sense and whether the outputs actually support the goals of the business. 

This shift is being driven by pressure on all sides. More decisions are being generated by AI, regulators are paying closer attention, and the risks are concentrating in systems that can learn faster than any team can review. Finance leaders simply won’t be able to rely on blind trust, because in finance, “almost right” is wrong. CFOs will expect AI to earn trust the same way their teams do: by showing how it got there. They’ll need visibility into why a model reached a recommendation, whether the underlying data holds up and how reliably those decisions can be traced and audited. 

When CFOs understand and trust the systems working beside them, they can move faster, make better calls and take huge amounts of manual oversight off their teams. And like any critical contributor, AI will earn its place only when its decisions can be explained, examined and relied upon. 

SaaS designed for the age of intelligent agents 

There’s a shift happening inside finance software that most people won’t see at first – systems are being rebuilt to support work that isn’t done by humans alone. As agents pick up more of the execution layer in finance, they’ll rely on software for the same reason people always have: to get the job done in a controlled, predictable and auditable way. 

The systems built for this era need to give agents what they give humans, structure, guardrails and consistency, so the work gets done right every time. And that’s when teams start to feel the impact: agents can run multi-step processes faster, with fewer errors and far less friction across routine work. 

This is where systems stop being tools and start being teammates and that shift changes everything about how finance teams spend their time. 

This isn’t the end of SaaS. It’s the beginning of a new generation of software built to serve both humans and intelligent agents. And that means accountants will spend less time processing data, and more time applying judgement and shaping decisions. 

Trust moves from principle to proof in accounting AI 

Finance doesn’t run on ‘close enough’, the numbers are right, or they’re wrong. So generic claims about responsible AI won’t cut it anymore. Businesses want to see how a model reached a recommendation, how its data is governed and whether its output can withstand an audit. 

These aren’t nice-to-haves; they’re the baseline for using AI in financial workflows. In 2026, trust becomes something you can measure. We’ll see the first wave of independent assurance applied to AI systems, with firms assessing models behind reconciliation, forecasting and anomaly detection. And we’re already seeing the groundwork, major accounting firms like PwC and KPMG launched dedicated ‘AI assurance’ services last year to bring external scrutiny to data integrity, model governance and compliance. 

If AI is going to support critical financial work, it has to hold up to the same level of professional oversight that finance teams live with every day. 

Trust won’t be earned through vague promises or statements, it will be earned through evidence, because if a model is going to support financial decisions, it needs to be as transparent as a spreadsheet – and you should always be able to see how it got there. 

The rise of the dead (internet) 

A growing share of what we see online is synthetic – written, refined or influenced by AI. That doesn’t mean real information is disappearing, but it does mean the signal-to-noise ratio is harder to manage. For finance leaders, the real question isn’t “Is this human or machine-made?” It’s “Can I trust it?” 

To answer that, we’ll see broader adoption of provenance frameworks: cryptographic signatures, secure metadata and open standards that show where information came from, how it was handled and how it has changed over time. These tools won’t just identify content they’ll help determine whether it’s suitable for use in regulated environments. 

For accountants, provenance becomes a practical requirement, not a theoretical one. As more workflows depend on AI-generated inputs, firms will need clear, verifiable indicators that the data behind a decision is accurate, traceable and reliable. 

In the next era of finance, knowing the origin of data will matter just as much as the data itself. 

The CTO becomes the hottest job in accounting firms 

As intelligent systems take on more of the execution layer in finance, someone needs to guide how those systems behave – and yes, I’m biased, but the role best positioned for that is the CTO. We’ve been preparing for this moment for a long time. 

In many firms, technology leadership will shift from supporting the business to shaping it. The leaders who treat technology as the source of innovation – not just a stack of tools – will stand out. Those ahead of the curve will spot where AI can streamline workflows, strengthen accuracy and open entirely new advisory opportunities. They’ll also give teams the confidence and skills to work effectively with intelligent systems.  

And when teams take that first step with AI, something interesting happens: once they see it work even once, trust grows quickly. That confidence snowballs. The hardest part is getting started, after that, the benefits become obvious. 

The firms that invest in this capability now – the leadership, the mindset and the skills – will move faster for clients, offer better advice and stand apart in a profession that’s evolving quickly. 

Akbar Thobhani, CEO & Founder, sFOX

Blockchain and crypto services will flip payments from a cost centre to a revenue centre

For decades, payment processing has been an expense line. You pay Visa, you pay your processor, you pay your acquiring bank. The goal is to minimise cost.

Stablecoins invert this. Cross-border transactions cost 90% less than traditional rails. The delta between what you pay to move money and what you can charge creates margin that didn’t exist before.

Payments companies integrating open, full-stack stablecoin infrastructure can monetise at every step: on-ramp fees, transaction fees, spread on conversions, FX margin, yield on reserves.

Payment companies that treat stablecoin integration as a defensive cost—”we need this to keep up”—will watch competitors turn the same transaction flows into profit centres. The companies that approach this as an offensive revenue strategy will capture margin that legacy rails can’t touch.

Amit Dua, SunTec Business Solutions

Banking in 2026: Intelligence, composability and value creation

Banks are moving into 2026 with many of the same pressures that have shaped recent years: unpredictable markets, shifting customer expectations and cautious spending decisions. The pace of technology change has not slowed, but the way institutions evaluate that change is becoming more rigorous. Investments now need to show a clear connection to performance and long-term value, rather than innovation for its own sake. Many technology programs that once focused on scale or experimentation are now being reviewed through a more measured lens, centred on outcomes, resilience and responsible growth.

Connecting investment with outcomes

The last few years saw a rapid increase in AI pilots, proofs of concept and early deployments. As organisations look for measurable results, many are reassessing where AI is making a clear contribution and where expectations need to be reset. Only 15% of AI leaders can currently link initiatives directly to profitability, and about a quarter of planned spending is expected to shift into 2027 while priorities are reviewed and business cases are strengthened.

This does not signal a slowdown in ambition. Global AI spending in banking is still expected to rise sharply. Instead, the emphasis is moving from isolated pilots to practical applications across core systems and business lines. The focus is shifting toward areas where AI can support better commercial decisions, enhance customer journeys and reduce friction in operational processes.

In this environment, AI is becoming more of an integrated capability than a standalone feature. Banks are beginning to connect data and decisioning across engagement, pricing, risk, servicing and revenue management. For example, intelligence can now support the entire deal lifecycle from auto-completing RFPs and suggesting product configurations to modelling pricing scenarios and assessing risk factors. When AI is embedded across these steps, institutions can deliver a more consistent and responsive client experience, while freeing up teams to focus on higher-value work. It also strengthens competitive positions by making decision-making faster and more informed.

Many banks are also revisiting how they measure AI performance. Beyond efficiency gains, there is growing interest in how AI contributes to margin improvement, customer lifetime value and more accurate risk evaluation. This broader measurement framework will become a defining part of AI strategy in 2026.

A more flexible architecture for banking

This shift in expectations is reinforcing the move away from tightly coupled, monolithic systems toward more composable models. Traditional architectures have often made change slow and costly, limiting the speed at which banks can update or launch new propositions especially in areas that touch multiple legacy systems.

By breaking applications into modular components, banks can update and deploy capabilities independently. This supports faster delivery and allows institutions to scale features without having to rework entire systems. It also improves resilience, as components can be adjusted, replaced or upgraded without disrupting the full technology stack.

Composable models also allow banks to assemble and adapt solutions as customer needs, market conditions or regulatory requirements evolve. This flexibility is becoming increasingly important as institutions navigate new reporting requirements, shifts in credit conditions and rising expectations around personalisation.

As composable architectures mature and AI becomes more embedded, some banks are beginning to explore multi-agent environments capable of coordinating decisions and workflows across systems. While still early-stage, these environments have the potential to automate complex processes that span pricing, risk, compliance and operations, creating a more adaptive and data-driven banking ecosystem.

Low code and no code driving tech delivery change

The rise of low-code and no-code platforms is reshaping how solution providers build and deliver software for banks. Since most institutions rely on vendors for development and deployment, the onus is on providers to adopt LCNC approaches that accelerate delivery, simplify configuration, and reduce time-to-value. These platforms allow to roll out workflow changes, rule updates, integrations and enhancements rapidly without long development cycles or heavy engineering effort.

Generative AI adds further acceleration by supporting coding tasks, improving documentation and enabling teams to prototype solutions with far fewer manual inputs. These capabilities open up development to a broader range of contributors, giving banks more agility in delivering incremental improvements.

However, broader participation also heightens the need for strong governance. Version control, embedded compliance, audit trails, role-based access and clear boundaries around what can be automated will become essential in managing the risks associated with distributed development. The challenge for banks is to balance speed and empowerment with consistency, security and oversight.

For most institutions, the objective is not simply to move faster but to ensure that technology delivery remains aligned with business strategy, customer expectations and regulatory obligations.

2026 outlook

In 2026, AI adoption will be assessed more closely against ROI, operational impact and the institution’s broader transformation goals. LCNC and GenAI will continue to support development, but strong design principles, clarity of intent and customer-centred thinking remain fundamental. Banks that treat AI as a strategic capability rather than a collection of tools will see the greatest long-term benefit.

Technology alone will not deliver transformation. Continued investment in workforce skills, governance frameworks and organizational culture will be equally important, alongside strong cybersecurity and compliance capabilities. Institutions that combine modern architecture, intelligent automation and disciplined delivery will be in a stronger position to respond to change.

Success will increasingly be measured by the value created across the full banking ecosystem: for customers, employees, partners and regulators. Banks that prioritise transparency, measurable outcomes and consistent delivery will be best positioned to compete in the years ahead and to build technology foundations that support sustainable growth.

Rav Hayer, Managing Director for UK & Ireland and Head of European Financial Services Practice, Thoughtworks

By 2026, stablecoins and tokenised deposits will have grown from niche crypto tools into core infrastructure for banks around the world. Global transaction volumes are already over $25tn and will continue rising, as these digital forms of cash make payments faster and, importantly, easier across borders.

Stablecoins threaten traditional deposits and high-margin payment segments, as customers may hold tokenised cash rather than fiat, challenging banks’ funding and revenue models. They also enable instant, 24/7 settlement at lower cost, solving long-standing issues of speed and fees in legacy systems. 

The next era of banking will succeed by pushing digital money into instant and, importantly, reliable flows that work across markets, without friction for customers. Banks that want to succeed in a new modern finance era will need to update their systems to handle real-time, programmable money and experiment early through pilots or partnerships with industry groups. These banks can then decide whether to issue their own digital cash, provide custody services, or even act as facilitators; allowing them to help clients move their funds across currencies at speed and lead the way in programmable finance.

Rob Israch, President, Tipalti

In 2026, mid-market companies will cut through AI hype and demand technology that proves its value in real time. Unless AI is visibly solving current finance challenges, whether that’s closing cycles faster or strengthening fraud controls, leaders will quickly dismiss it as vaporware.

Rising expectations around customer and user experience will also reshape vendor choice more than ever. Mid-sized organisations want sophisticated capabilities delivered through intuitive design, quick onboarding, and hands-on support that helps them scale without adding complexity.

Meanwhile, supply chains are becoming more global, not less. Finance teams will need stronger cross-border payment capabilities, clearer cash-flow visibility, and scalable compliance processes as regulatory demands grow. Companies that combine automation, usability, and global readiness will be best positioned for sustainable growth next year.

Daniel Shem-Tov, EMEA Director of Finance, Tipalti

As we move into 2026, finance leaders across Europe are increasingly juggling what I call two ledgers: the traditional need for tight controls, compliance and audit readiness, and the newer expectation to operate at far greater speed and scale. Both are intensifying, and manual processes simply can’t keep up.

New regulatory pressures are adding to the load. Requirements under the Digital Operational Resilience Act (DORA) are already reshaping how finance teams manage operational and technology risk. And with major provisions of the EU AI Act coming into force in 2026, including stricter transparency, governance and data-quality rules for high-risk AI systems, the expectations around control and auditability will only grow.

This is exactly why technology, and particularly AI, is becoming essential. While it may be daunting, it’s vital for delivering the assurance regulators expect while removing the manual work that slows teams down. Finance functions that embrace this balance now will be the ones driving growth across EMEA in 2026.

Robin Anderson, Head of Product Management, Tribe Payments

Technologies that only a year or two ago were heralded as universally transformative – in particular AI and digital currencies – are now entering a new phase of scrutiny. I see 2026 as the year where bold narratives give way to practical realities. The promise remains, but expectations are evolving fast.

AI: Beyond the hype

Over the last 18 months, the initial wave of AI-powered excitement has started to level out. We’re witnessing a subtle but significant pullback from the “AI will solve everything” mindset. It’s not that AI is underdelivering. In fact, fraud detection, transaction monitoring, and advanced customer support automation have all seen genuine performance gains. But we’re learning that not all use cases are created equal, and not all organisations have equal access to the same quality of AI.

Measurable value vs. complexity

What’s emerging now is a clearer understanding of where AI provides measurable value versus where it introduces new complexity. In particular, there’s growing awareness of auditability. Payments is a highly regulated, highly accountable industry. Decisions made by large-scale language models need to be traceable, and today many aren’t. When a model declines a transaction, flags a risk signal, or routes a payment flow in a particular way, providers need to be able to explain why. Black-box reasoning may be acceptable for product recommendations; it’s not acceptable for regulated financial processes.

The growing divide: AI haves and have-nots

Another challenge that will become more visible in 2026 is the emerging divide between AI “haves” and “have-nots.” Large retailers and acquirers are already prioritising deep integrations with leading generative AI platforms, shaping models around their own data, catalogues, and checkout flows. This creates better-performing experiences, but only for those with the scale and influence to secure early access and bespoke optimisation. Smaller merchants, PSPs, and issuers risk being left behind, not because they lack ambition but because they lack representation in the underlying training data.

The result will be a widening performance gap in AI-enabled payments experiences; one we expect regulators, industry groups, and technology partners to pay far more attention to in the coming year. Next year the conversation will shift toward fairness, transparency, and the democratisation of AI capabilities.

Digital currencies: From experimentation to practicality

Digital currencies are moving through a similar maturation curve. 2024 and 2025 were marked by experimentation, pilot programmes, and regulatory groundwork. In 2026, we’ll start to see which problems stablecoins and central bank digital currencies (CBDCs) are genuinely well-suited to solve and which they aren’t.

Stablecoins: Efficiency and operational trade-offs

The strongest area of emerging promise is friction reduction in FX and cross-border transactions. Here, stablecoins could provide faster, cheaper, and more predictable alternatives to traditional cross-border rails. The appeal is clear: a uniform digital representation of value, moving across interoperable networks with reduced correspondent dependencies.

But as with AI, the supporting workflows matter. Liquidity management, treasury operations, reconciliation processes, compliance checks, and risk frameworks all need to be re-imagined for stablecoin-based flows. The operational burden may, in many cases, offset the theoretical efficiency savings, at least in the short term. Even the most forward-thinking institutions will adopt stablecoin rails selectively rather than universally.

CBDCs: Innovation within constraints

CBDCs face similar constraints, though for different reasons. Their greatest value lies in enabling innovation at the infrastructure level: programmable settlement, inclusion-focused access models, and potentially new categories of financial services. But CBDCs do not magically eliminate the hard problems of settlement risk, fraud, sanctions screening, or AML. Many of the processes that slow down today’s settlement cycles are regulatory or operational, not technological. A digital pound or digital euro doesn’t automatically remove those layers.

So, in practice, I expect 2026 to be a year where digital currencies complement rather than replace existing systems. They will shine in specific corridors and use cases but will coexist with established rails for the foreseeable future.

If the last few years have been about promise, 2026 will be about pragmatism. AI and digital currencies will both continue to advance, but their adoption will depend more on governance, interoperability, operational design, and ecosystem inclusivity than on raw technological capability.

Pat Reily, co-founder, Uplinq 

Interest rates will be slashed

The Fed Reserve will reduce interest rates by 1.75% by the end of 2026. The recent small reductions by the Fed still leave the Fed Funds rate about 185 basis points above historical levels. Powell is likely to reduce rates by another 50 basis points before the end of his term, with his successor returning rates to the historical norm. The net result will be lower borrowing costs, higher employment, and greater economic growth.

The AI herd will begin to thin 

For AI startups and new AI groups within existing technologies, it will be feast or famine. Those using off the shelf or lightly customised generic AI will likely, and quickly, find their way to the tar pit.

Virtually every financial service provider needs to support complex, objective functions that are poorly served by conventional AI. Only those solutions that can simultaneously and effectively support the interests of the borrower/customer, lender/financial institution, capital partners/shareholders, and regulators have a hope of surviving.

Slapping a little AI on something may fool some of the venture capital and broader community, but only for a little while. There is a reason why there are very few companies making nuclear reactors or jet engines (technologies that are similarly transformative to AI): the sheer complexity and expert knowledge requirements require massive undertaking and intellectual capital. The same will prove true for AI.

Bankers and credit models will de-risk AI

Commercialisation of end-user driven solutions that act in advisory, clerical, concierge and administrative roles will continue to grow quickly. For banks and lenders, this means setting aside how we traditionally associate risk with given industries, sectors or business function. It is a new day, and credit models need to adapt to these new realities.

Small business lending poised to jump

The Fed Funds rate and what businesses pay for credit are highly coupled. Getting Fed Funds back in line will be a stimulus for greater business lending.

Ahead of rate changes, potential borrowers (especially small business owners who have struggled to access capital with elevated interest rates) should prepare necessary materials for loan applications. When used properly, debt capital can be used for more than just added liquidity – it can support greater business expansion and profitability.

Kambiz Kazemi, Chief Investment Officer, Validus Risk Management

The waiting game for 2026: Fed rate expectations, market volatility & outlook

After a record breaking 43-day shutdown, the government is back to business and the publication of economic data has finally resumed. Unfortunately, as we suspected, some important data points – such as the October inflation data – will be permanently forgone. Nonetheless, investors are once again able to rely on key data to formulate their expectations.

Back in October, Fed Chair Jerome Powell’s suggestion at the FOMC meeting press conference that the Fed might be on pause took investors by surprise. The market promptly priced out nearly half a percentage point of rate cuts which had been expected by the end of 2026, and equities weakened. Once the data flow resumed, it generally highlighted a softening employment picture and an inflation rate that seems to be hitting a floor in the vicinity of 3%, remaining stubbornly higher than the Fed’s target 2% rate.

This, in turn, prompted another leg down in assets past mid-November.

AI hype fades

As always, risk assets remain very reactive to expectations of further rate cuts. While the AI hype seems to have somewhat faded, and equity markets debate the economic scale and viability of AI, the December FOMC meeting has become a near obsessive focal point. But the relationship between asset prices and expectations of rate cuts is a two-way street. Investors are conditioned to expect that the Fed will react to any widespread market weakness or sell-off episode by adopting a dovish stance. This feedback loop has made for a volatile fourth quarter so far. In just over a month, we saw expectations going from pricing 0.50% of cuts, to zero, and then back to 0.25%.

However, in our view, there is little attention paid to a determining factor for markets in 2026. The salient observation is that, over the last year, the market expectation for where the rates will end by end of 2026 has been astonishingly stable.

2026 expectations stable

Since mid-2025 the market has continuously priced three rate cuts for 2026, no matter what happened in the short-term. This stability of 2026 expectations is not only quite impressive, but also historically rare if not without precedent. Why? Because all the volatility and abrupt swings in expectation that have occurred in the short term – particularly regarding the upcoming meeting in December – have not affected where the market sees the Fed Funds rate ending up at the end of December 2026.

In other words, 2026 expectations seem to be immune and have been fully dissociated from what happens here and now.

Nonetheless, it is precisely those medium-term expectations for 2026 that are a particularly defining factor and will soon become the focus of all investors. It is important to remember that Mr. Powell’s term is coming to an end and whoever replaces him is likely to be more amenable to assuaging the US administration’s bias towards a looser monetary policy.

What would this mean for the markets?

As we head into 2026 and start looking into the post-Powell era, any perceived dovish tone by investors will likely provide important tailwinds to risk asset prices on the one hand and help soften the US dollar on the other. This scenario would be relevant in the first half the year until the new Fed Chair takes over the seat.

But if a deteriorating employment picture and sustained inflation persist in the months to come, the reality of the challenge facing policy makers could be catching up with investors in the second part of 2026.

As always, our framework is built in term of scenarios, but we see the one described above as having a higher probability than both a more benign scenario – healthy growth and employment – and more dire outcomes, for instance, a steep bout of stagflation.

As a result, preparing for the first half of 2026 using optionality that benefits from healthy price action for risk assets, and taking a closer look at – and thoughtful hedging – the USD exposure of one’s portfolio can be rewarding.

Caroline Baker, Country Managing Director (CMD) for North America, Vistra Funds

Retail investment

Retail interest in private markets will continue to rise in 2026 as investors seek diversification and access to strategies once limited to institutions. While growing demand will increase liquidity, it brings real operational challenges. Managers and distributors will need to navigate liquidity constraints, maintain appropriate buffers and handle the added complexity that comes with serving a much broader investor base.

Education will be critical. Private wealth banks, financial advisers and platforms must help retail investors understand structures, risks and time horizons so expectations are set early and clearly. The firms that succeed will be those that invest in strong client support, intuitive investor-facing technology and human customer support teams who can respond when issues arise.

As retail access expands, managers will need to balance innovation with responsibility, ensuring investors are engaged, informed and supported throughout the entire lifecycle of their investment.

Rosemary McCollin, Executive Vice President, Fund Solutions EU & ME, Vistra Funds

2026 will be the year when efficiency gaps in real estate investment operational management become more visible than ever before. Volatility will remain a concern, but the real differentiator will be operational strength. Managers who have invested in integrated systems, clean data and advanced technology will stand out, because the market will favour those who can prove their decisions, not just justify them after the fact.

LPs are already shifting towards managers who offer transparent, data-backed insights into performance, valuations and risk. That pressure will intensify in 2026. Firms still relying on manual reporting, siloed data or outdated valuation models will find fundraising slower and competition tougher.

The expectation next year will be consistent, timely, auditable data that shows how valuations are derived, how risk is monitored and how performance compares across regions and asset types. Those who modernise early will be far better positioned as capital becomes more selective.”

Data quality and standardisation

In 2026, data quality will become a defining operational priority in private markets. Managers are already feeling the pressure, and the consequences of poor data will only become more visible, from slower transactions to tougher valuations and increased scrutiny from LPs.

Standardisation will drive this shift. Without shared definitions, structures, and reporting frameworks, firms will keep wasting time reconciling information rather than analysing it. The focus must be on breaking down data silos, adopting common standards, and strengthening governance so teams can finally work from a single source of truth.

This change will also level the field between smaller managers and larger players. With modern tools and better data, firms of any size can turn accuracy and consistency into a genuine advantage. Those willing to invest now will operate with greater confidence and adopt advanced technologies with far less friction. In 2026, scrutiny, precision and speed will define the winners.

AI and automation

AI will become part of everyday operations across private markets in 2026. Early adopters have already shown the value through faster diligence, better forecasting, stronger valuations and lower operational costs. More firms will follow as they look for greater efficiency in a difficult market.

The firms that will benefit most are those with clean, well-structured data and strong governance. This foundation is essential. With it, managers can automate with confidence, make faster decisions and deliver deeper insights to investors. Without it, AI becomes slow, costly and unreliable, and the gap between prepared firms and those still catching up will only grow.

In 2026, AI becomes a core capability. Firms that combine strong data with disciplined adoption will move faster, improve accuracy and build investor confidence. Those that delay will struggle to keep pace with a market that expects more efficiency. While many tasks will become automated, the human touch will remain just as important, especially when interpreting results, managing relationships and guiding investors through uncertainty.

 

 

 

 

 

 

.