Richard Murray on change in the UK financial sector in 2026
The UK financial sector will undergo dynamic transformation in 2026. Sweeping innovations in digital assets, shifting regulatory landscapes, and bold investments in defence and infrastructure are redefining the market’s foundations. With the transformation of private markets and technology accelerating change, the ability to embrace agility and forward-thinking will be critical.
Digital asset adoption
Digital assets are set to become increasingly mainstream, with more hedge funds and institutional investors incorporating stablecoins into their portfolios. This shift reflects growing confidence in digital asset infrastructure and the demand for efficient, transparent settlement mechanisms. As digital assets gain traction, demand for robust custody, reporting, and operational processes will grow.
Regulatory developments
The Financial Conduct Authority (“FCA”) is expected to introduce new rules designed to simplify regulatory reporting and reduce compliance costs. By streamlining requirements, the FCA aims to lower barriers for market participants and encourage further innovation. We expect that firms will increasingly look for automated, user-friendly solutions to manage their regulatory obligations.
Defence and infrastructure investment
Defence and infrastructure spending across Europe is projected to rise, attracting substantial private capital. This trend will drive the launch of new funds targeting these sectors, increasing the need for administration, oversight, and specialised investment expertise. The intersection of public policy and private finance is likely to create unique opportunities for growth and diversification.
Growth in private secondary markets
The landscape for private company share trading is set to expand through initiatives like PISCES and now JP Jenkins as a second operator alongside the London Stock Exchange. These developments will foster the growth of private secondary markets, offering investors more ways to access and trade unlisted company shares. As activity in these markets increases, demand for valuation, liquidity, and settlement services will intensify.
Capital concentration
Despite broader market growth, capital is expected to remain concentrated among the largest fund managers. This dynamic creates fundraising challenges for smaller and emerging managers, who must differentiate themselves through superior data, reporting, and investor engagement. Managing more complex, multi-asset portfolios will further test operational capabilities and resource allocation.
Client demand drivers
Clients will require comprehensive support for digital asset custody, seamless reporting, and efficient fund operations. The proliferation of new investment vehicles, especially those focused on defence, infrastructure, and private markets, will increase the need for expert administration and oversight. Service providers that can deliver timely, accurate data will be well-positioned to attract and retain clients.
AI and technology advances
Artificial intelligence and technological innovation will play a central role in reshaping the industry. Enhanced automation will streamline day-to-day fund operations and regulatory reporting. Limited partners are expected to leverage AI tools and digital platforms to assess manager performance, increasing the pressure for clear and accurate data. Technological improvements will accelerate pricing, settlement, and trading in private markets, creating a more dynamic investment environment.
Balancing opportunities and challenges
The most significant positive impacts in 2026 are expected to arise from the broader adoption of digital assets, heightened investment in defence and infrastructure, and increased activity on private market trading platforms. These factors will open up new servicing opportunities and expand the breadth of the UK financial ecosystem. However, it will be important to address the ongoing concentration of capital among large managers, the need to manage increasingly complex portfolios spanning diverse asset classes, and the navigation of varying regulatory requirements and geopolitical risks. Staying abreast of rapid technological change will also be essential to maintaining competitiveness.
