The banking industry is entering a moment of transition. After several years of economic uncertainty, shifting consumer behavior, and rapid technological change, the industry is now adjusting to a new reality.
As the new year approaches, experts are closely watching how banks evolve and what those changes could mean for everyday customers. Here’s what they predict for banking in 2026 — and how these shifts could impact the way you spend, save, and borrow.
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Next year, we can expect to see an accelerated shift toward digital-first banking. In particular, competition around AI and fintech will continue to reshape how banks serve their customers. That includes everything from pricing, to risk management, to lending decisions.
“In 2026, banks won’t just be experimenting; they’ll be operationalizing AI across the enterprise,” said David Becker, founder and CEO of First Internet Bank. “Think: predicting loan defaults months ahead or identifying market risks before we commit capital. That’s not theory — it’s happening now.”
This should translate to several benefits for customers, including more personalized services, enhanced fraud protection and security, and faster loan approvals with more data-driven underwriting. Additionally, bank customers will have access to a growing number of traditional banking alternatives — such as neobanks, fintech platforms, and online lenders — opening up more choices when it comes to where they put their money, and potentially, at a lower cost.
Read more: How to use AI to improve your finances
According to an analysis by Capital One, about 48% of American adults make no cash purchases in a typical week, while an estimated 69% of Americans used cash for few (if any) purchases over the last 12 months. In fact, an estimated 87% of all transactions in the U.S. are cashless.
As more businesses shift to a digital-only approach, an increasing number of consumers will transition from physical payment methods to digital wallets and other forms of non-cash payment.
That said, cash won’t exactly be obsolete by next year; older generations have been slower to adopt non-cash payment methods. Additional Capital One research found that younger Americans aged 18 to 26 are most likely to use digital wallets, with 91% using them as their primary payment method for shopping in 2023. That’s compared to 59% of Americans aged 27 to 42 years old, who used digital wallets more than other shopping methods, and 50% of Americans aged 43 to 58.
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The Fed recently lowered the federal funds rate for the third time this year as it works to reduce the inflation rate. Experts predict additional rate cuts in the coming months, although when this will occur is unclear, especially given the uncertainty surrounding tariff inflation and trade policy.
The CME FedWatch Tool estimates a 24.4% likelihood of another 25 bps rate cut in January. However, BofA Global Research predicts two quarter-point cuts in June and July 2026, which would bring the target federal fund rate range to 3%-3.25%.
“The Fed is navigating a complex landscape — tariffs, labor market shifts, and global trade dynamics. Rate cuts are coming, but they’ll be measured,” Becker said. “Gradual adjustments give the economy room to absorb change without creating new shocks. In my opinion, that’s the kind of steady hand we need right now.”
Read more: Fed predictions for 2026: What experts say about the possibility of additional rate cuts
A dwindling number of visitors paired with high operational costs could make brick-and-mortar bank branches fewer and further between in the new year.
Major U.S. banks have announced plans to shut down 311 branches since late August. JPMorgan Chase had the most bank branch closures at 66, followed by TD Bank at 51. This trend will likely continue — and even accelerate — in 2026.
Banks say they’re simply following the behaviors of customers. Only 13% of baby boomers consider visiting bank branches their preferred method of managing their bank accounts, while just 4% of Gen Z and millennials prefer to visit a branch, according to the American Bankers Association.
Read more: What to do if your bank branch closes
Buy now, pay later (BNPL) services have become a popular way to ease the financial burden of a large purchase by allowing shoppers to split up payments into interest-free installments. According to PayPal’s 2025 Holiday Shopping Survey, 52% of shoppers say they’re more likely to make a purchase when BNPL is available as a payment option.
However, experts say that going into 2026, relying too heavily on BNPL is a slippery slope that can lead to a cycle of debt. The problem? These loans often get spread across many different providers, making it difficult for shoppers to keep track of how many loans they have open and when payments are due.
“A consumer can rack up thousands in BNPL obligations in a weekend, and no one sees the risk until it’s too late,” Becker said. “While BNPL can expand access for those shut out of traditional credit, it also enables spending that may not be sustainable.”
Missing a BNPL payment can trigger a number of financial consequences, such as late fees or penalty charges. If the missed payment remains unresolved, the account may be sent to collections. And while some BNPL providers historically did not report to credit bureaus, that’s changing; missed payments may now be reported, which could hurt your credit score and make it harder to qualify for loans and credit cards with favorable interest rates in the future. Plus, a missed BNPL payment can strain your budget by creating a snowball effect, where catching up requires larger lump-sum payments, making it easier to fall behind on other bills as well.
Becker noted that greater transparency and coordination between platforms could make BNPL a safer, more inclusive payment option, ultimately empowering consumers and strengthening their financial stability. “But until then, it’s a growing blind spot for lenders and regulators alike,” Becker said.
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