UK Banks Face Critical Crossroads in 2026, KPMG Report Warns
LONDON – UK banks are entering a pivotal year in 2026, facing a confluence of challenges that will define the sector’s future trajectory, according to a new report by KPMG UK. The firm identifies five key forces – the skills gap, diversity of thought, responsible AI implementation, regulatory fragmentation, and workforce adaptation – that will separate successful institutions from those left behind.
The report, authored by KPMG UK Banking Sector Lead Peter Rothwell, highlights a growing disconnect between the technological fluency of junior staff and senior leadership. This disparity, rothwell notes, “creates tensions and slows innovation,” necessitating leadership development programs that prioritize both financial expertise and technological understanding.
Beyond skills,the report stresses the critical importance of diverse perspectives in strategic decision-making. “Too frequently enough, strategic decisions are made within echo chambers, with a narrow set of voices dominating,” the report states.Broader inclusion across genders, backgrounds, and experiences is deemed “essential to strengthening decision-making and reducing blind spots.”
As banks increasingly integrate Artificial intelligence and other advanced technologies, the report cautions against prioritizing technical implementation over robust governance and ethical considerations. Failure to do so, it warns, “risks undermining trust and resilience.” Strong risk cultures prioritizing the ethical use of data are paramount.
Rothwell emphasizes that 2026 will be a year of decisive action. “The winners will not be those that try to do everything but those that set a clear course and execute it with conviction,” he asserts.”Clarity,agility and conviction will define success in the year ahead.”
Despite a fundamentally strong foundation, UK banks must act decisively to shape their desired future, the report concludes.
About the Author:
Peter Rothwell is the Banking Sector Lead for KPMG UK. He has 15 years of experience advising banks on treasury, risk, and regulatory matters. Prior to joining KPMG, Rothwell spent 12 years in the banking industry at Deutsche bank, Morgan Stanley, ANZ, and National Australia Bank, holding roles across both front and back office functions.