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As financial services move into 2026, one thing is clear: change is constant. From shifting consumer behaviour and funding pressures to the accelerating impact of AI, banks and fintechs are being forced to rethink long-held assumptions about how they operate, compete, and deliver value.
These five predictions reflect the themes we believe will define the year ahead; not as abstract trends, but as practical forces shaping strategy, technology decisions, and customer expectations across the industry.
2026 is likely to be another turbulent year for personal finances. Households may see further shifts in income patterns and spending behavior. This isn’t necessarily a doom-and-gloom outlook, but it does point to ongoing change – and adapting to change is one of the hardest challenges when it comes to financial health.
The good news is that financial institutions will increasingly have access to more mature, AI-driven tools to support their customers and protect themselves against evolving risk patterns. While challenges remain, particularly around advanced use cases, the delivery of genuine advice, and an uncertain regulatory landscape, there is already a growing portfolio of proven AI applications. These tools automate processes, translate complex data into insight, and meaningfully improve interactions, outcomes, and decision-making.
After several turbulent years for interest rates, funding concerns continue to linger, especially for smaller institutions. In 2026, we expect competition for deposits to intensify further, with a greater emphasis on customer loyalty rather than pure acquisition.
For established institutions, this shift makes sense. In an increasingly crowded fintech landscape, customer relationships are fragmented and acquisition battles are harder to win. That doesn’t mean growing the customer base is the wrong goal, but it only pays off when there is a genuinely compelling proposition. That’s often where challengers and new entrants have an edge, while incumbents can lag behind. For many established players, the smarter focus will be on the customers they already have: rethinking loyalty programmes, service quality, and the overall customer experience.
The ongoing tension between open banking providers and banks has forced the industry to take a hard look at business models and real-world value. That scrutiny is a positive development. Early assumptions (that data access and connectivity could be taken for granted) led to use cases that struggled to generate sufficient value to justify the effort involved. The debate around “paying for access” has only accelerated this reassessment.
In 2026, we expect genuinely value-generating open banking use cases to begin cutting through the noise. As a side effect, financial institutions will also start to take a fresh look inward – recognizing the unrealized potential of their own data and the opportunities it represents.
Despite talk of an AI bubble, implementation challenges, and a lack of clarity, there are already many tangible use cases where AI more than lives up to the hype. For now, most of these applications sit at the edges of core banking, but the pressure on monolithic cores is mounting.
AI excels at accelerating development and translating between disparate data feeds – areas that have long been a weakness of traditional core platforms. It may be a bold prediction, but we are approaching a point where the technology is mature enough to shift the operating model altogether: away from building bank operations around the core, and towards a leaner, AI-native approach where processes follow outcomes, rather than dictating them.
2025 re-ignited interest in cryptocurrencies and brought cross-currency and cross-border transactions back into sharp focus. Without diving into the root causes, it’s safe to assume both trends will continue into 2026, but with a more efficient response from financial institutions.
Until now, many institutions have been scrambling to work out how best to respond. In 2026, we expect to see more concrete action: new payment rails, options, and features rolling out from both fintechs and legacy providers. Some questions will remain unresolved, and a fully coordinated, regulator-led push still seems unlikely. But expectations are rising. Retail and business customers alike increasingly demand more choice, flexibility, and control when it comes to moving their money.
Taken together, these predictions point to a common direction of travel: financial institutions that succeed in 2026 will be those that turn complexity into clarity using better data, smarter automation, and more outcome-driven operating models to serve customers in a rapidly changing environment.
At Bud, we’re focused on helping banks and fintechs unlock the full value of their data; from transaction enrichment and segmentation to AI-ready foundations that support better decisions at speed.
If you’re thinking about how to prepare your organization for what’s next, get in touch to see how Bud can help.
AI will play a central role in financial health, helping institutions and customers adapt to continued volatility through better automation, insight and decision-making.
Deposits will become the primary competitive battleground, with loyalty and service quality taking priority over pure customer acquisition.
Open banking will enter a more commercially grounded phase, with value-led use cases cutting through and renewed focus on the potential of first-party data.
AI will increasingly reshape bank operating models, moving capabilities beyond the core and towards more outcome-driven, AI-native architectures.
Payments will continue to diversify, with growing customer expectations for cross-border, multi-rail and flexible ways to move money.
Get in touch to find out how to prepare your organization for what's next
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