In a nutshell
- ⚡ Real-time payments become the default: ISO 20022 data, Request to Pay, and Variable Recurring Payments accelerate cash while demanding 24/7 operational resilience and sharper fraud controls.
- 🤖 Generative AI leaves the lab with controls: model-risk pipelines, data minimisation, and human-in-the-loop reduce exceptions; small, domain-tuned models cut cost—while guarding against data leakage and vendor lock-in.
- 🧩 Embedded finance turns platforms into banks (without the charter): integrate payments, wallets, and credit for new margin, balancing build vs. partner trade-offs and FCA-grade compliance-by-design.
- đź”— Tokenisation shifts to regulated pilots: tokenised funds, bonds, and deposits promise faster settlement and programmable workflows, but require interoperability, legal finality, and clarity under MiCA/UK regimes.
- 🌍 Climate and Scope 3 data go finance-grade: ISSB-aligned disclosures and assurance-ready workflows tie carbon to the cost of capital, with incentives like supply chain finance discounts for verified reductions.
The future of finance in 2026 is not a single trend but a braided rope of technology, regulation, and new customer expectations. With the cost of capital still elevated, CFOs and product leaders are reallocating budgets toward systems that convert insight into cash faster. Meanwhile, regulators in the UK and Europe are nudging the market toward data-rich, resilient, and consumer-safe infrastructure. Having interviewed CFOs from Manchester to Milton Keynes, a pattern emerges: the firms pulling ahead connect real-time payment rails, responsible AI, and embedded finance models with disciplined controls. Transformation in 2026 is less about moonshots and more about trustworthy, revenue-grade execution.
Real-Time Money Movement Becomes the Default
Instant settlement is shifting from novelty to norm. The UK’s Faster Payments and ISO 20022 migration across cross‑border networks are forcing treasurers to rewire their processes for continuous liquidity rather than batch cycles. That means receivables hit faster, fraud risks surface earlier, and reconciliation has less room for manual lag. A Midlands manufacturer told me its average days sales outstanding dropped after rolling out Request to Pay and richer payment references—small workflow wins that snowball when cash is tight. Real-time isn’t a future state; it’s now the baseline expectation for UK consumers and corporates.
What to do this quarter:
- Close the loop: map quote-to-cash with automatic matching of ISO 20022 remittance data.
- Stress-test operational resilience for 24/7 payment spikes and out-of-hours exceptions.
- Pilot Variable Recurring Payments for predictable use cases (subscriptions, utilities).
Pros vs. Cons:
- Pros: Faster cash, better data lineage, lower error rates.
- Cons: Fraud windows compress; finance teams must upgrade controls and alerts.
Generative AI Leaves the Lab: Controls, Not Just Demos
In 2023, finance teams experimented. In 2026, they productionise—but only with guardrails. The most credible wins are boring on purpose: invoice coding, reconciliation anomalies, KYC summarisation, and contract clause extraction. A London fintech described moving from a hackathon model to a model risk pipeline that logs prompts, redacts sensitive data, and uses human-in-the-loop checks. The result wasn’t viral magic; it was a reduction in exception handling and a steadier month-end close. The competitive edge is not the model; it’s the control plane that makes AI safe, auditable, and cheap to run.
Implementation checklist:
- Adopt data minimisation and masking; keep PII outside model contexts.
- Set lineage for inputs/outputs to satisfy auditors and the three lines of defence.
- Choose task-specific models; small models with domain fine-tuning often beat general giants on cost and latency.
Why “more AI” isn’t always better:
- Pros: Faster close, fewer keystrokes, richer analytics.
- Cons: Data leakage, regulatory ambiguity, vendor lock‑in without portability standards.
Embedded Finance Turns Platforms Into Banks (Without the Charter)
Marketplaces and SaaS platforms now package payments, wallets, and credit alongside their core workflows. The pitch is simple: reduce churn and add 50–150 bps of margin by owning the financial moment. A Northern UK retail platform told me it doubled attachment of financing after embedding instant settlement and cash-back incentives inside checkout. Yet the complexity lives beneath the surface: regulated partners, safeguarding, and complaints handling must be watertight to satisfy the FCA. In 2026, embedded finance wins on compliance-by-design as much as UI polish.
Build vs. partner considerations:
- Build: Control margins and UX; higher capital and compliance burden.
- Partner: Faster launch with Banking-as-a-Service; dependency on another firm’s resilience and roadmap.
Commercial levers to watch:
- Interchange and scheme fees under scrutiny by the PSR; model sensitivity to fee changes.
- Working capital products anchored to platform data (e.g., payout history) to price risk better.
| Trend | What to Watch | Pros | Why It Isn’t Always Better |
|---|---|---|---|
| Real-Time Payments | ISO 20022 remittance richness | Faster cash, cleaner data | Fraud pressure and 24/7 ops load |
| Generative AI | Model risk and audit trails | Cycle-time cuts, fewer errors | Data leakage, governance gaps |
| Embedded Finance | BaaS partner resilience | New revenue lines | Compliance exposure and partner risk |
| Tokenisation | MiCA, UK regime clarity | Faster settlement | Legal finality and custody questions |
| Climate Data | ISSB-aligned disclosures | Cheaper capital for leaders | Data gaps and greenwashing risk |
Tokenisation and Digital Assets Move From Hype to Regulated Pilots
The conversation has matured from memes to market plumbing. Institutions are piloting tokenised funds, bonds, and deposits to compress settlement cycles and unlock collateral mobility. The emerging picture in the UK and Europe is pragmatic: align with MiCA where applicable, clarify custody obligations, and test wholesale CBDC-style rails for delivery versus payment. Asset managers like the operational simplicity—fractionalisation, automated actions—while risk teams want legal finality and recovery playbooks. In 2026, tokenisation wins when it disappears into the workflow and feels like ordinary securities with extraordinary efficiency.
Execution notes:
- Keep interoperability front of mind; avoid isolated ledgers that strand liquidity.
- Design for chain-of-custody evidence auditors can read without a PhD in cryptography.
- Start with low-volatility instruments to prove controls before broadening scope.
Pros vs. Cons:
- Pros: Faster settlement, programmable cash flows, richer compliance automation.
- Cons: Regulatory fragmentation, vendor concentration risk, unclear standards for smart-contract audits.
Climate and Scope 3 Data Becomes Finance-Grade
Carbon is now a cost of capital variable. As ISSB-aligned disclosures and UK transition plans take shape, lenders and investors are pricing emissions intensity alongside EBITDA. That pushes finance teams to treat sustainability data like financial data: controlled, assured, and decision-ready. One logistics CFO in the North West showed me their pivot: they linked supply chain finance discounts to verified Scope 3 reductions, nudging carriers toward lower-emission options and sharing the upside. In 2026, sustainability moves from marketing slide to covenant, and the spreadsheet must stand up to audit.
Data strategy essentials:
- Map activity-based emissions to products and contracts; avoid coarse averages.
- Choose frameworks that align with investor expectations to prevent disclosure rework.
- Build assurance-ready workflows with traceable calculation methods.
Pros vs. Cons:
- Pros: Preferential pricing, stronger brand with procurement teams, risk foresight.
- Cons: Data scarcity, model variance across sectors, greenwashing enforcement risk.
2026 belongs to firms that operationalise the unglamorous details: richer payment data, auditable AI, compliant embedded finance, pragmatic tokenisation, and assured climate metrics. The playbook is iterative: pick one revenue or risk metric, wire in new rails, and prove the cash impact before scaling. The winners won’t shout about transformation; their cash positions and customer retention will. As you assess your roadmap, which capability—real-time payments, responsible AI, embedded finance, tokenisation, or climate-grade data—will you prioritise this quarter, and why?
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