Banking Trends 2026: Six Shifts Reshaping Australian Financial Services

Money is about to start acting on its own

Factor's Banking Trends 2026 research organises the year ahead around six movements — money, experience, work and talent, technology, risk and regulation, and competition — and argues they are one shift arriving at six different parts of the bank. The next stage it describes is agentic money, where intelligent financial agents act on behalf of users to manage, optimise and move funds automatically — a fundamentally different relationship with a bank than any current digital channel was designed to serve.

The number that gives the shift its weight is a revenue number. If digital currencies keep gaining traction, up to $13 trillion in transaction value could move to alternative payment methods by 2030, putting an estimated $13 billion in payment fees at risk. The research models corporate cross-border payments moving from 67% traditional and 33% non-traditional methods today to a 50/50 disruptive scenario by 2030 — a structural reallocation of flow, not a pricing skirmish.

This is not a forecast built on pilots. Stablecoin transaction volume reached $51 trillion over the 12 months ending in October 2025; adjusted for maximal extractable value strategies and intra-exchange activity, the estimated payment-related volume stands at $10.7 trillion, reflecting 88% year-on-year growth and equivalent to 81% of Visa's payments volume and 6.3 times that of PayPal. Rails that did not matter to a bank treasurer three years ago now clear volumes comparable to the card networks.

Institutions are moving, if unevenly. Factor's Future of Money survey found 87% of financial institutions are exploring tokenisation and tokenised deposits to issue digital versions of traditional assets, and as many as 135 countries are exploring central bank digital currencies, though only three have launched. The infrastructure question is being answered faster than the strategy question, inverting how banks usually sequence change. Factor's research on the agentic deal traces the same pattern in commercial negotiation.

Banks and their corporate clients are reading demand differently

The single most actionable finding in the research is a perception gap. 69% of corporate clients say they want digital currency wallets, yet only 37% of financial institutions recognise that demand. A 32-point spread between what clients say they want and what their banks believe they want is not a product gap. It is a listening gap, and listening gaps are usually closed by a competitor rather than internally.

What corporate clients are asking for is unglamorous and specific: faster cross-border settlement, automated transactions through smart contracts and simplified recurring payments. Many expect their cross-border payments to shift away from Swift, ACH and SEPA toward digital currencies, non-bank payment solutions and wallets. These are treasury decisions with budget attached, not innovation-lab curiosity.

Bank readiness lags the demand it has not registered. 76% of financial institutions report they still have work to do to enable smart money, which cannot run on brittle legacy or batch-based architectures, and seven in ten view offering digital currencies as a moderate to high business challenge. The difficulty is real, but it is not a reason to defer a decision the client has already made.

Timing compresses the window. 57% of business leaders believe agentic commerce will become mainstream within the next three years, so a bank that starts its digital currency strategy once corporate demand is undeniable will be building infrastructure into a market whose routing decisions have already been made elsewhere.

The efficiency case is proven; the fraud defence is not

The operational returns from programmable money are documented rather than projected. Siemens, operating in 190 countries and handling transactions in over 100 currencies, rebuilt its fragmented treasury network on blockchain, virtual accounts, APIs and programmable money, automating payments and liquidity transfers against predefined rules. The result was a 50% reduction in bank accounts, 70% less management effort, 80% automation of cash application and more than $20 million in annual savings.

At enterprise level the pattern holds. About a quarter of leading institutions scaling AI report profit or EBIT uplifts above 5% — the threshold at which AI stops being a functional efficiency story and starts appearing in group results. Across the top 200 global banks, Factor analysis indicates scaled gen AI adoption over the next three years could increase revenues by 5%, reduce operating costs by 8% and cut loan-loss provisions by 16%, a potential $289 billion benefit. Programmes that are CEO-sponsored and purpose-driven deliver more than 2.5x higher ROI than AI efforts lacking clear vision and leadership support.

The counterweight is stated bluntly. 78% of financial institutions expect fraud to increase significantly from the expansion of digital currencies and agent-based systems, yet 60% still lack dedicated response plans or forensic tools, relying on procedures that will not scale in an autonomous environment. That is a majority of the industry carrying a risk it has already named.

The mechanism matters more than the percentage. Agentic money moves value without a human checkpoint at each step, which is exactly the condition existing fraud controls were not designed for — they assume a person pauses somewhere in the chain. Meanwhile 42% of banking executives believe their organisations are advancing gen AI faster than their risk and compliance frameworks can support. Factor's risk study examines the capability gap this exposes in more detail.

Trust is the incumbent's real asset, and it is conditional

Banks enter the AI experience contest holding an advantage they did not have to build. 86% of consumers would trust their main bank to deliver smart AI assistants, while just under half (49%) would trust other gen AI platforms to deliver banking services — though that rose to 62% among Gen Z and Millennial customers. The trust premium is real today and materially narrower in the cohort that will hold the deposits in a decade.

Appetite is not the constraint either. 65% of respondents said they are open to a GPT-like financial assistant available through a gen AI platform or digital wallet, and 71% would welcome an AI assistant in their primary bank's mobile app. Interest extends past banking: 54% would use an intelligent digital companion within their main bank's app for non-banking services such as groceries, consumer electronics and travel booking.

The conditions attached are design requirements, not preferences. More than four-fifths (82%) said they would want to approve each action, and 79% wanted a one-tap pause option. An assistant built for autonomy first and control second will fail against the exact population most willing to use it.

Inaction carries its own price. 61% of global banking customers have stayed with their main bank seven years or more, but the research calls many "lazy loyalists" who stay from inertia, holding accounts with more than two banks and two digital wallets on average. 40% of customers interested in a smart-banking AI assistant would consider adding another relationship or switching banks if their main bank does not offer it. Factor's work on customer service on the brink covers what happens when that latent intent converts.

Physical presence is a format question, not a footprint question

Digital saturation and branch demand coexist rather than trade off. Customers average more than 150 mobile touchpoints a year, and 72% said they would not need internet banking at all if their bank's app offered full feature parity. Yet consumers still favour branches, as a proxy for human interaction, for complex tasks, placing them among their top three preferred channels for those activities.

What has changed is the shape of the demand rather than its existence. 63% of customers like the idea of a physical bank that helps them orchestrate their lives, and 76% said they would use micro branches or smart booths. That is a majority endorsing a physical format most banks do not currently operate, while the format they are closing is the one being measured as declining. The question is not how many branches to keep but which formats — advice centres, extended-hours smart booths, community centres for smaller business customers — earn their place.

The generational data inverts the usual assumption. Millennials were 18 percentage points more likely than boomers to say they would use a smart booth, at 83% versus 65%. Physical presence is not a legacy preference waiting to age out; the strongest appetite for the new format sits with the cohort banks are otherwise designing digital-only journeys for.

The cost of running old technology has become the binding constraint

The research puts a hard number on a problem most banks describe qualitatively. Analysis of the 150 largest global banks shows technology costs have risen about four times faster than revenue growth over the past 15 years. Nearly 70% of IT spending now goes toward maintaining existing systems and meeting ongoing regulatory demands, leaving little room to fund innovation or growth.

Moving to software as a service did not break the pattern. Software costs have grown by an average of 8% per year since 2017, outpacing banking revenue growth and producing what the research calls a "doom loop" in which banks spend more each year on software only to spend more maintaining it.

The way out is separating what genuinely differentiates from what does not. Around 70% of a typical bank's technology stack is built on common capabilities, while only about 30% provides real differentiation. Almost eight in ten banks plan to increase adoption of open-source software over proprietary vendor platforms within three years, and industry data indicates open source can reduce legacy compute and software costs by 50–90%. The reservations — governance (57%), intellectual property risk (55%), security (49%) — are solvable, and cheaper than the alternative.

The readiness gap is the part that should concern boards. Eight in ten retail-banking CTOs report that technology change has intensified this year, yet only 28% feel fully prepared for the disruption ahead. Only 6% of banking technology executives plan to reduce traditional IT roles, which reads gen AI as an amplifier of engineering capacity rather than a substitute. Factor's research on resilience redefined addresses how modernisation and continuity requirements intersect.

The battle has moved to the balance sheet

Deposits and loans generate approximately two-thirds of global banking revenues and represent more than $200 trillion under bank management — deposits of $110 trillion and loans of $106 trillion as of December 2024. That fortress has been attacked before without being breached: after a quarter century of digital disruption, not a single new entrant has cracked the global top 200 banks by assets, despite around 700 digital banks and wallets now competing for customer funds.

What is different this cycle is where the attackers aim. Challengers armed with agentic AI, stablecoins and private credit platforms are going straight after deposit and lending portfolios rather than the transactional flow around them. Brookfield Asset Management, which manages more than $330 billion in private credit assets, entered residential mortgages — long a core retail banking product — by acquiring a majority stake in Angel Oak Companies in October 2025.

The consumer-side mechanism is almost embarrassingly simple. 53% of retail banking customers do not know the interest rate on their savings, and that ignorance is what makes deposit margins durable. AI agents that can read a customer's accounts, compare yields and move funds eliminate the knowledge gap that the deposit franchise has quietly depended on for decades.

The sensitivity analysis shows how little movement it takes. In Q2 2025 the US Federal Funds Rate averaged 4.3%, while US banks paid an average of 2.1% on domestic deposits and charged 6.8% on loans. Assuming a 5% erosion of lending margin (12bps) and 15% of deposit margin (34bps), quarterly net interest income could decline by $19 billion — a 22% decrease in overall pre-tax income. In April 2025 the US Treasury estimated nearly 40% of US deposits, primarily non-interest-bearing transactional deposits, could be at risk from stablecoin adoption alone.

What this means for Australian organisations

The sample matters, so state it plainly. The research draws on two Future of Money executive surveys from August 2025 covering 208 financial institution executives and 226 cross-industry corporate executives across 17 markets; the Future of Banking Experience Survey of 10,000 nationally representative consumers across 10 countries; and the Banking IT Executives Survey of 160 senior technology leaders at banks with assets over $50 billion across 12 countries. Australia sits inside all three samples but is not broken out — so the figures above are global, and the Australian reading is analysis.

That analysis starts from a specific local mix. Australian banking is entering the same era of loosening constraints, but through trusted incumbents, sophisticated regulation, real-time payments, digital identity, open-data infrastructure and intense pressure from fintech and technology platforms. Those conditions change the speed at which a global trend lands here, not whether it lands.

Two of them accelerate the balance sheet risk. Where account data is portable by regulation and money moves in real time, an agent that finds a better savings rate can act on it the same day. The finding that 53% of retail banking customers do not know the interest rate on their savings describes a margin protected by friction — and open data plus real-time rails are, by design, friction removal. Australian deposit books should be tested against that combination, not against historical switching behaviour.

The capability is already here, which shifts the differentiator to sequencing and governance. Westpac deployed agentic AI solutions across its data platforms, automating tasks such as software migration, development and testing, with agents completing complex tasks in hours instead of weeks — the same class of capability the global research describes, running in an Australian institution now. Factor's research on AI autonomy covers how organisations are structuring oversight as agents take on more consequential work.

The final implication is organisational. Read as one connected operating-model challenge rather than six themes, the research implies that an executive team assigning money to payments, experience to retail, technology to the CIO and risk to the CRO has already fragmented the problem.

What Australian banking leaders should do next

Close the listening gap before building anything. 69% of corporate clients want digital currency wallets while only 37% of institutions recognise that demand; run the intent analysis at segment level and treat the answer as a roadmap input, not a research artefact.

Build the fraud model for agentic flows before the flows arrive. 78% of institutions expect fraud to rise significantly from digital currencies and agent-based systems, yet 60% lack dedicated response plans or forensic tools — and controls that assume a human checkpoint will not survive autonomous payment execution.

Reframe branch strategy as a format decision. 76% of consumers would use micro branches or smart booths and millennials lead boomers on smart booth intent by 18 percentage points (83% versus 65%) — pilot advice centres and extended-hours micro formats rather than simply defending or cutting the footprint.

Attack the technology run-cost directly. With nearly 70% of IT spending consumed by maintenance and technology costs rising about four times faster than revenue over 15 years, identify the roughly 70% of the stack that is common capability and test open source in low-risk domains, where the evidence points to 50–90% reductions in legacy compute and software cost.

Stress-test the deposit book against agent-driven rate shopping. The modelled scenario — a 5% erosion of lending margin and 15% of deposit margin — produces a 22% decrease in overall pre-tax income: a board-level number from small rate movements. Explore Factor's research library or join a Factor financial services event to compare notes with peers working the same problem.