2026: What's on the Radar for Financial Institutions? What's on the radar for financial institutions?

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What's on the radar for financial institutions?

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Corporate responsibility

Fintech

Regulatory

Investment Funds

Global Banks

Corporate responsibility

The emergence of agentic AI, marks a turning point in AI adoption, delivering greater benefits to the financial sector than generative AI to date, through quicker processes, competitive advantages and cost-savings. Jurisdictions that adopt principles-based regulatory architectures for AI are likely to see more investment in and development of this technology. Following the AI theme, 2026 is likely to be a year of strategic, tech-driven M&A, including AI-influenced investments. Participants will navigate regulation cautiously, aiming to enhance their competitiveness in an increasingly digital economy. Changing and uncertain laws continue to be unhelpful in tech M&A deals, nonetheless, there is greater clarity on crypto in many jurisdictions with the implementation of new laws.

Fintech

Financial services have seen a wave of deregulation to varying degrees in the major economies. All driven by a desire to shake up the existing order, boost sluggish economic growth and address perceived overreactions to the 2008 global financial crisis. However, deregulation does not mean no regulation and for participants operating a global platform, taking advantage of deregulation in any one country on a cost-effective basis can be challenging. Conversely, US regulation to regulate stablecoin has improved market confidence renewing its impetus in the world’s largest economy. Other jurisdictions have their own legislation, such as the Hong Kong SAR. Cybersecurity is another instance of increasing regulation. Data protection and privacy legislation has been in place for some time, but there is a developing framework of financial regulatory obligations.

Regulatory

Private equity is expected to see a resurgence of deal activity, fueled by growing interest in private credit and direct lending as alternatives to traditional banking. A wide range of private debt products is now available, driven by the data center boom. Yet market confidence remains fragile, and approaches to alternative investment fund structures vary significantly across jurisdictions. The challenge for the financial sector in 2026 lies in effectively balancing and integrating commercial, operational and legal considerations.

Investment funds

Wealth management remains an important revenue generator for global banks, but the industry is undergoing profound transformation. Compliance, risk management and sustaining client trust are growing challenges. Private banking faces tighter AML rules, underscoring the need for robust conduct and transaction analysis. Banks must also navigate an expanding web of international sanctions, with 2026 expected to bring even more restrictions. Further tax changes loom, including OECD Pillar Two reporting, the updated Common Reporting Standard and evolving VAT exemptions. Tax is increasingly seen as an important sustainability driver.

Global banks

Responsible business practices may no longer dominate headlines but continue to be an important issue. Sustainability remains a priority—for example, in the operation and financing of data centers amid an AI-driven boom. Yet, without global standards to define what makes a data center sustainable, meaningful comparisons are elusive. Growing scrutiny, however, signals that change is on the horizon. At the same time, workforce strategies for 2026 must adapt to a regulatory landscape fractured by geopolitical tensions and shifting societal expectations—especially around diversity, equity and inclusion. Meanwhile, growing focus on financial crime and accountability means institutions and individuals face rising enforcement risks for facilitating financial misconduct, making prevention and compliance more critical than ever.

As 2026 unfolds, financial institutions face a pivotal moment, all against an uncertain geopolitical and economic backdrop. In technology, AI is poised to transform business models, although cyber resilience remains a critical concern. As for regulation, deregulation efforts aim to boost economic growth, while crypto enjoys a more favorable environment. By contrast, pressure for greater transparency in private capital markets is growing. Meanwhile, sustainability has slipped down the agenda but remains integral to corporate responsibility in many regions. Our report, “2026: What’s on the Radar for Financial Institutions?”, explores the trends, developments, and emerging risks shaping financial services in the year ahead.

2026

“The autonomous functionality at the heart of agentic AI holds out the prospect of exciting new use cases, such as payments, operating, for example, within digital platforms.”

Vinod Bange Partner, London

“International payments entities are looking to modernize cross-border transactions using blockchain, including stablecoins and tokenized deposits to facilitate transactions.”

Karen Man Partner, Hong Kong

“To thrive in wealth management’s evolving landscape, banks and wealth managers must embrace technology, invest in compliance infrastructure and develop agile strategies.”

Ansgar Schott Partner, Zurich

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