2026 Global Outlook for Financial Services

The global financial services industry has rebounded strongly, achieving record scale, profitability, and returns after the post–financial crisis slump. Banks intermediated over $400 trillion in funds, generated $6.5 trillion in revenues, $1.2 trillion in net income, and reached a 10.3% ROE, with forecasts of ~12% ROE by 2026–2027. Capital strength has also improved, with Tier 1 ratios at 13%. These results were driven by high savings, elevated interest rates, and a strong global wealth cycle.

Despite strong fundamentals, the equity markets remain skeptical. Banking trades at a 1.0x price-to-book ratio, far below other industries, reflecting concerns about looming headwinds. Key challenges include moderating global growth and inflation, geopolitical volatility, slower credit expansion, potential interest-rate cuts, and rising competitive pressures from private capital, alternative assets, and AI-driven entrants.

Structural issues compound these challenges: a peaking global wealth cycle with generational shifts, declining productivity, operating models that lag technology investment, and vulnerabilities tied to interest-rate and credit risk. While non-performing loans may rise modestly, systemic stress is unlikely absent a major shock. Overall, if macroeconomic conditions remain stable, ~12% ROE in 2026 is achievable for the industry. But laggards must take action now.

Financial institutions must respond to a changing industry dynamic that demands new business models where financial services are embedded where it is needed by customers and new technology and operating models that leverage exponential technologies like agentic AI and quantum, while managing emerging risks and reskilling their workforce.

In this year's Global Outlook we highlight key imperatives for the industry and top actions for 2026.