The State of Financial Services: 2025 Highlights and 2026 Outlook

Podcast: What The Fintech

Host: Paul Hindle (Fintech Futures)

Guests: Dave Wallace and Domesh Mistry

As 2025 comes to a close, financial services move from experimentation to execution. This episode reviews the shifts that mattered and outlines where banks, fintechs, and regulators focus next.

AI in Banking: From Hype to Operating Model

In 2025, banks moved out of defensive mode. Profitability and balance-sheet strength reopened appetite for innovation, with AI as the primary catalyst.

AI adoption progressed in two phases:

→ Personal productivity gains for consumers became mainstream

→ Enterprise transformation entered delivery mode

Banks now revisit initiatives once considered too risky, including core modernization and large-scale process redesign. AI reduced cost, time, and complexity enough to make these viable.

A major shift emerged toward agentic AI. Instead of one general system, banks deploy multiple specialized agents focused on fraud, credit risk, AML, cybersecurity, and operations. These agents work together through orchestration, forming what Domesh describes as a “single brain” for the organization.

Trust and Brand Reassert Their Importance

As AI-generated content, scams, and deepfakes improve, trust becomes a differentiator again. Users increasingly rely on brands rather than content verification.

Banks hold a structural advantage. Trust already defines their role. In an AI-driven environment, brand clarity and values matter more, not less.

Wallets and Data Ownership Gain Momentum

The wallet conversation expanded beyond payments. A personal wallet increasingly represents:

→ Money

→ Identity

→ Data permissions

Centralized, user-controlled data offers a way to regain control from fragmented platforms. Banks in the UK underestimated this opportunity, while large global institutions advanced faster.

Stablecoins: The Breakout Trend of 2025

Stablecoins quietly became one of the most impactful developments of the year.

Key drivers:

→ US regulatory shifts limiting CBDCs

→ Formal support for stablecoins as value-transfer instruments

→ Near-zero cost, instant settlement

Enterprises now adopt stablecoins internally for treasury and cross-border payments. This reduces reliance on banks for money movement and forces banks to rethink their role in payments, trust, and infrastructure.

What Emerges in 2026

Several themes gain traction next year:

→ Personal banking assistants delivering scalable financial guidance

→ AI-first interfaces, where conversation replaces apps

→ Hyper-personalization, including better support for neurodiverse users

→ Renewed focus on orchestration as agentic systems expand

Quantum computing also returns to the discussion, with practical breakthroughs expected within the next decade.

Final Takeaway

2025 marked the shift from digital experimentation to structural change. AI, stablecoins, and data ownership reshape how financial services operate. The winners in 2026 define their role around trust, intelligence, and orchestration rather than products or channels.