With a shift from pilots to real-world use cases of agentic commerce and genAI, alongside advancements in digital assets, embedded finance, and RegTech, 2025 was a busy and exciting year for innovation and technology in financial services. FStech asked a range of experts from across the sector for their reflections on the past year and thoughts on what’s to come over the next 12 months.

Financial services ‘becoming’ technology

As we enter 2026, the boundary between banking and technology will become increasingly indistinguishable.

“Financial services will no longer merely use technology, they will be technology,” says Kris Brewster, director of retail banking at LHV Bank.

He predicts that AI customer service will become mainstream, with the technology moving from back-end optimisation to front-end orchestration.

“Expect to see hyper-personalised customer service, moves into regulated financial advice, and autonomous money management,” continues Brewster. “Multi-agent systems will transform how banks engage, sell, and support customers with fast query resolution.”

He says that at LHV Bank, this will allow it to operate at lower costs and pass on more value to customers in terms of interest rates.

“80 per cent of routine queries are ripe for speedy resolution by AI with expert people freed up to support complex queries when it is needed most,” adds Brewster.

Stephen Way, financial services lead at Ordnance Survey, which works with financial institutions in areas such as risk assessment and fraud detection, agrees that financial products will continue to evolve, make greater use of AI, and develop personalised offerings.

“Technology will enable highly personalised and bespoke products across both the financial services and insurance sectors,” continues Way. “Customer expectations are likely to keep shifting towards fully digital interactions – from purchasing policies and borrowing to submitting claims via digital platforms and apps – with minimal effort and time delays.”

AI to drive complex cyber-crime

Chris Dimitriadis, chief global strategy officer at ISACA, says that in 2026, protecting business continuity will dominate cyber agendas.

“This year’s high-profile breaches have shown leaders just how quickly financial and reputational damage can escalate, prompting a renewed awareness of and focus on resilience,” he continues. “ISACA’s research finds 64 per cent of professionals are prioritising this, but meaningful protection demands more than good intent.”

The strategy officer explains that with AI now dominating the software development space, with it increasingly able to generate code and come up with ideas for cyber-attacks, hacking will become mainstream.

“The risk is that anyone can use AI to become a hacker at the speed of intent,” adds Dimitriadis. “We therefore need an army of AI-ready cyber professionals to help manage risk and address what is coming.”

He calls on organisations to accelerate AI-ready skills, rigorously test response plans, and embed resilience into everyday culture, with the real measure of progress across the cyber space next year being whether organisations equip teams with the capability to confront fast-moving threats. Without doing so, they will be left vulnerable to increasingly capable adversaries – and to the fallout that follows, he warns.

Richard K. LaTulip, field chief information security officer at cybersecurity firm Recorded Future, says that third-party risk will be the industry’s single greatest vulnerability in 2026.

“Financial institutions are only as secure as the least-protected vendor in their ecosystem,” he says. “Attackers know that a compromise upstream can provide downstream access to dozens of institutions.

“We're going to see increased pressure on vendor due diligence, transparency, and continuous monitoring.”

He also agrees that AI will be the most disruptive force in financial-sector cybersecurity next year.

“Small criminal teams armed with AI-driven tooling can now operate with the capacity of much larger groups, automating reconnaissance, impersonation, and fraud with astonishing realism,” he says. “The institutions that responsibly integrate AI into detection, response, and governance will widen the defensive maturity gap across the sector.”

Agentic AI may also introduce a fundamentally new risk: autonomous, goal-driven cyber operations.

“These systems can plan, pivot, and execute attacks without constant human direction,” says LaTulip. “For defenders, agentic AI will enhance automation and resilience, but it also demands a new level of oversight, model governance, and regulatory clarity.”

Digital Assets moving further into the mainstream

Sean Forward, business manager, digital currency at ClearBank says that institutional adoption of digital assets is anticipated to accelerate in 2026 as traditional finance begins integrating them into 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,” adds Forward. “Stablecoin supply is projected to double, hitting $500 billion by the end of the year and potentially reaching $2 trillion by 2030 according to forecasts by JP Morgan.”

He explains that 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.

“U.S. Bank-issued stablecoins are becoming increasingly dominant, facilitating real-time cross-border payments, corporate treasury integration, and tokenised settlements,” he adds. “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.”

Brice van de Walle, EVP core payments at Mastercard Europe says that while the “wild ride of crypto” might be the financial story of the early 21st century, mainstreaming cryptocurrencies beyond investing has proven elusive.

“The last year and a half brought regulatory clarity in the US and Europe over stablecoins — cryptocurrencies pegged to government currencies — creating the confidence the financial sector needed for commercialisation,” he adds. “Next year, expect greater collaboration between ecosystem players that will make it easier and safer for people to pay and move money with stablecoins, from facilitating payouts to stablecoin wallets to enabling stablecoin and bitcoin purchases on-chain to streamlining settlement across borders and currencies.”

Dr Andrea Barbon, assistant professor at the Centre for Financial Services Innovation, University of St Gallen said that stablecoins could become part of everyday financial life.

“They may start to make up a significant fraction of retail payments, especially in e-commerce and remittances, where low fees and fast settlement offer clear benefits,” he continues. “Customers might use stablecoin wallets more often as regulated issuers emerge, similar to how they currently use contactless payments.”

He adds that asset tokenisation might gain more commercial importance.

“We could see the first signs of institutional investors testing programmable securities to speed up settlement and unlock liquidity in specific asset classes, even though widespread adoption remains uncertain,” says Barbon. “The long-term effects of this technology will rely more on operational readiness and clear regulations rather than just on innovation.”

Tom Pirone, industry lead for financial services at Appian said that banks will face “increasing pressure” to operate across both traditional rails and emerging digital ecosystems.

“Clients expect to move value instantly and securely regardless of the underlying technology,” continues Pirone. “Today, fiat and digital assets remain largely separate, but early movers are proving what is possible.”

He adds: “Towerbank in Latin America is already enabling clients to bridge both worlds. NASDAQ’s petition to tokenise its market signals broader momentum. Tokenised assets will create new operational responsibilities including multi rail reconciliation, valuation, tax treatment, and real time settlement oversight. Upcoming regulations such as the US GENIUS Act and EU stablecoin rules will accelerate institutional adoption.”

Ugne Buraciene, group chief executive at payabl., agrees that next year there will be significant momentum behind stablecoin innovation.

“Adoption is growing – in some industries, they already account for 15 to 20 per cent of transactions – and with the Bank of England in the UK preparing a new regulatory regime, it’s clear the landscape is shifting,” she adds. “We expect stablecoins to become more mainstream, but truly widening uptake will depend on consumer trust, lower costs and regulatory clarity.”

Quantum Computing

Bernie Wright, chief information security officer at ClearBank says that quantum risk is edging closer.

“While full commercial capability may be five to 20 years away, major cloud providers and nation states could have early solutions within the next decade,” he continues. “Data harvesting for ‘decrypt later’ attacks is already underway and will accelerate in 2026.”

Wright predicts that next year companies will focus more on cataloguing sensitive assets and planning what needs futureproofing.

Corinna Mitchell, general counsel at Symphony says that while it is encouraging to see industry begin to prepare for quantum computing though, it is clearly at the very start of this process.

“The risks for current cryptography standards are profound, with experts warning that quantum computers could break end-to-end encryption as early as 2030,” adds Mitchell. “This makes 2026 a critical year for quantum preparation - and I expect we will see more guidance begin to be introduced that aims to protect the financial sector from large-scale disruption when the next quantum breakthrough arrives.”

Agentic AI

With the significant leaps and bounds made in agentic AI developments over the past six months, it is perhaps unsurprising that experts believe this trend will continue into 2026.

“In 2026, if IT leaders in the financial sector want to build an insurmountable lead on the competition, they must use agentic artificial intelligence in every way they possibly can,” says Martijn Gribnau, former chief executive of Volksbank and senior leader at ING and Genworth Financial, as well as chief success officer at AI firm Quant. “It will prove to be the game changer in the financial services industry.”

He adds that agentic AI will “reinvent” how accounts and record maintenance are done by near 100 per cent automation being reached.

Som Sarma Royyuru, head of UK banking and capital markets at Capgemini says that agentic AI will help to support financial crime compliance next year.

“Agentic AI enables continuous monitoring, real-time pattern recognition, and systems that can learn and adapt to new fraud techniques,” he says. “This isn't experimental anymore.
“It's quickly becoming the baseline expectation. Regulators, including the Financial Conduct Authority (FCA), acknowledge AI's growing role in financial services, noting that AML and fraud prevention deliver the greatest potential benefits.”

He says that in 2026, organisations will deploy autonomous decision-making tools to cut through the noise, respond faster, and reduce their risk exposure.

But the technology won’t only be harnessed by legitimate players, with ClearBank’s Bernie Wright warning that cyber-attacks will increasingly weaponise agentic AI in the months to come.

“We’ll see autonomous tools scanning networks for weaknesses, generating tailored attacks and executing breaches at speed,” he explains.

Phishing campaigns will also become far more sophisticated, with AI producing highly personalised messages that are significantly harder for employees to detect, resulting in 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,” continues Wright. “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.”

Karli Kalpala, head of strategic transformation & financial services industry at Digital Workforce, says that until now, information has always flowed between people, or between people and documents.

“Reasoning models change that by being able to interact with documents and tools, without needing human involvement,” he continues.

Kalpala says that the impact is now industries that were previously out of reach, such as asset management, accounting, insurance, and legal services, can be automated.

“Humans have traditionally been essential in these areas because only human reasoning could interpret complex, unstructured information and make decisions,” he adds. “In insurance, for example, much of the work involves reading documents, interpreting policies, and making judgments. Reasoning models can now handle these document-to-document flows, and that’s why AI agents are at the centre of the discussion."

Hiten Patel, partner and global head of financial infrastructure, technology, and services at management consulting firm Oliver Wyman says that the adoption of agentic AI will help “re-shift” workflows and activities across organisational silos, presenting material opportunities for new product development and substantial cost efficiencies.

“However, persistent challenges remain,” warns Patel. “These include data access, privacy and the complex regulatory environment, especially concerning AI's role in customer-facing interactions and decision-making. Talent acquisition, implementation limitations and difficulties with scaling these sophisticated AI solutions across the organisation also remain critical bottlenecks.”

But he says that despite these hurdles, the outlook for AI adoption remains positive.
“We will see the growing maturity of AI solutions among financial institutions and the use of strategic partnerships, where institutions are leveraging the capabilities of AI providers,” he continues. “Additionally, after the initial phases of exploration, the industry will pivot towards a sharper focus on demonstrating clear return on investment, driving the increasing use of AI for efficiency gains by rethinking process."

Andy Mason, chief operating officer (COO), NatWest Boxed, says that next year people will be the true advantage in financial services, rather than models or tools.

“The industry now has a greater challenge: how to successfully develop people, providing them with the skills to successfully use AI, and in doing so reduce apprehension,” he explains. “This gap is now as much a cultural issue as it is a technological one.”

Mason says that the institutions making the strongest progress are those investing in AI-ready workforce initiatives.

“Formal AI literacy programmes, structured tool training, and clear guidance on responsible use are giving employees confidence and reducing resistance,” he adds. “Crucially, these programmes show people how AI can augment their roles by reducing friction rather than replacing them.”

There has also been a shift in job design.

“Frontline agents and operational staff will need to evolve from traditional users of systems to AI quality assurance (QA) and improvers - validating outputs, spotting failure patterns and feeding insights back into continuous improvement loops,” continues the COO. “This ‘human in the loop’ approach is becoming essential as AI moves deeper into customer journeys and risk-sensitive processes.”

Hans Tesselaar, BIAN’s executive director adds that despite the AI hype, plenty of banks remain unprepared to embrace the full impact of emerging technologies, with a report from BCG earlier this year revealing that the majority are still “stuck in siloed pilots and proofs of concepts”.

“As neobanks showcase seamless offerings, matching consumer expectations for a more AI-influenced, hyper-personalised service, customer loyalty and brand reputation are on the line for traditional institutions,” continues Tesselaar.

There have also recently been rapid advances in practical agentic commerce – whereby AI systems act independently to make and complete purchases on behalf of users.

“Agentic commerce will expand in 2026, but critically, so will the guardrails around it, making it easier and more secure for businesses to integrate agentic commerce into their transaction flows,” says Brice van de Walle, EVP, core payments, Mastercard Europe. “The industry is focused on how to identify that an agent is legitimate, how to strengthen authentication with agents and reduce fraud, and how to capture intent in case an AI transaction goes awry. You can automate commerce, but you can’t automate trust.”

BigTech regulation

Adam Stringer, financial resilience expert at professional services firm PA Consulting, says that 2026 will be the year BigTech steps into the FCA’s regulatory spotlight.

“For the first time, some of the world’s largest technology firms are set to fall under financial services regulation,” he explains. “This isn’t just about compliance – it’s about resilience in an era where cloud and tech outages can ripple across the entire financial system.”

2025 saw a significant number of high-profile outages and cyberattacks, with some commentators labelling it “the year of the hyperscaler outage.”

“These third-party outages have impacted financial services, preventing customers from accessing online banking or completing payments, and exposed systemic vulnerabilities,” continues Stringer. “We expect early 2026 to bring formal designation of critical third parties, putting tech giants under the same regulatory lens as banks and insurers.

“In early 2025, UK regulators gained new powers to oversee critical third-party providers to financial services to make sure they have the right governance and controls to provide resilient services. The rules are in place, but the real game-changer will come when HM Treasury decides which firms fall under this regime. That designation hasn’t happened yet, but it’s the missing piece that will turn policy into action and help plug systemic vulnerabilities in digital infrastructure and financial services.”

Legacy system modernisation

Tom Merry, managing director – head of banking strategy, Accenture UKI says that legacy system modernisation is quickly shifting from being an operational preference to a strategic imperative for banks.

“For years, these cores were the future and powered growth, delivered stability and enabled scale when the industry needed it most,” he explains. “If they feel like a constraint today, it is not because of poor decisions, but because technology and business expectations have advanced at an unprecedented pace. Built for a different era, these systems can be costly to maintain, difficult to change and are often incompatible with today’s regulatory and data-driven environment.”

But the modernisation journey is not about a single, one-step transformation. The most effective strategies embrace hybrid models and composable architectures, allowing banks to integrate modern solutions while managing legacy systems for stability.

“This staged approach reduces risk, accelerates value delivery, and enables progressive decommissioning of outdated components,” he says. “Emerging technologies are making this transformation even more achievable, with the rise of agentic and generative AI reshaping how modernisation happens.

“Rather than replacing human expertise, AI is augmenting it by creating new roles, enabling hybrid responsibilities, and freeing capacity to tackle long-standing technology backlogs. AI accelerators are transforming software development, from requirements gathering to testing and documentation, making modernisation faster and more efficient.”

---