The technologies shaping UK financial services in 2026

The financial services sector has always been at the forefront of rapid technological transformation, and 2026 will be no exception. This year, the UK’s focus is on bolstering cyber resilience, embracing the opportunities and challenges of artificial intelligence, and advancing regulatory clarity around digital assets like stablecoins. The scaling of digital verification services promises to unlock significant economic value and enhance trust across the industry.

Here are some of the key developments I will be looking out for in the coming 12 months.

Cyber security

2026 has kickstarted with three major cyber announcements. First, on 6 January, the Department for Science, Innovation and Technology published its Cyber Action Plan. This aims to strengthen the cyber resilience of Government and public services. Delivered by a new, £210m funded Government Cyber Unit, the first phase will be delivered by 2027. Expect to see the Government prioritise the foundations for their ‘new model for government cyber’ this year.

Second, the Cyber Security and Resilience Bill has returned to Parliament. The Bill will reform and add to existing regulations to increase UK defences against cyber-attacks.

Thirdly, the Intelligence and Security Committee concluded its report into the use of Cloud Technologies. The report has been shared with the Prime Minister, so we can await Government’s response.

Looking ahead, the UK is also gearing up for a refreshed National Cyber Strategy. Organisations should watch for tougher expectations around cyber resilience, clearer guidance for critical infrastructure and supply chains. With AI enabled threats rising and geopolitical tensions intensifying, the updated strategy is likely to sharpen the UK’s focus on deterrence, resilience, and international collaboration, setting the tone for how government and industry will need to respond throughout 2026.

Artificial Intelligence

Looking ahead to 2026, AI is set to remain a major theme, amid uncertainty over whether a global AI bubble might burst. This could, however, create opportunities for the UK, as some investors may pull back from the US over concerns about inflated valuations and redirect capital towards the UK and parts of Asia. The Government’s annual AI Sector Study suggests the UK’s AI ecosystem will continue to flourish, with domestic firms scaling and strengthening the sector’s global competitiveness.

In financial services, innovation is likely to evolve further, with more firms experimenting with agentic AI to deliver real-time, personalised advice and automated actions for customers.

Stablecoins

The UK is edging closer to a full policy framework for stablecoins. The Bank of England has set out proposals for systemic stablecoins, while the FCA’s Regulatory Sandbox recently launched a stablecoin-focused sandbox cohort to test UK-issued stablecoins under the evolving regime.

HM Treasury is actively shaping the landscape by bringing crypto assets into the financial services regulatory perimeter through new legislation, helping to establish stronger standards and greater market confidence. Expect clearer rules and a more resilient stablecoin and digital assets regime to be finalised through 2026.

Scaling digital verification (DV)

2026 will be an exciting year for digital transformation in financial services. Following the 2025 Data Use and Access Act, the City Corporation - in collaboration with EY - advanced a detailed strategy - in our report Securing growth: the digital verification opportunity. This charts how to successfully scale DV services in the UK.

We are working with the government and the sector to unlock the potential of our proposed "orchestrator" model. It will unlock billions in economic value, reducing fraud, and streamlining transactions. In an era where trust and security underpin global commerce, our fintech leadership makes the UK a prime location for scaling these solutions. This will be a vibrant year for UK digital infrastructure in private and public sectors.

Driving innovation and growth in 2026

The UK’s financial services sector looks set to continue driving global innovation in the year ahead by advancing cyber resilience, scaling artificial intelligence, and shaping robust digital asset regulations. With refreshed national strategies, pioneering agentic AI for personalised financial advice, and leadership in digital verification, the UK is unlocking economic value and strengthening trust.

Chris Hayward, 
Policy Chairman of the City of London Corporation