Innovation under pressure: how will the banking sector remain competitive in 2026?

By: Trademagazin Date: 2026. 02. 06. 10:31

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Banking must be stable, regulated and experiential in an environment where neobanks, fintech players and artificial intelligence are creating new expectations. While customers would manage their finances 24/7, on their mobile devices, large language models and AI-based solutions are opening up a new competitive landscape in the field of financial decisions. Today, the stakes are no longer whether artificial intelligence will appear in banking, but whether financial institutions can maintain their central role in the digital financial experience – K&H is at the forefront in this area, with its own AI-based solutions and customer-centric digital developments.

The basic requirements of the banking system are stable and accurate operation, but behind this lies a complex operational and regulatory system. However, the challenges of the digital age, the competition from neobanks and fintech players, create expectations from consumers that they can manage their finances 24/7, digitally, intuitively and in an experiential way, and it doesn’t matter if users feel trendy with all this.

Continuous innovation is therefore essential for the banking sector: they must meet the traditional expectations and regulatory requirements imposed on banks, while at the same time meeting the requirements of the times.

“In the banking sector, the majority of innovation investments are still made up of ensuring stable operations and compliance with regulations, but ideally, a third of the innovation budget should be spent specifically on digital innovation. These developments can contribute to business growth in the short and medium term,” says Gergely Lóska, Head of IT and Innovation at K&H Group.

According to Lóska, changing technological requirements and the rapid transformation of customer needs together determine the direction of banking innovations. Since consumers’ number one digital device is their smartphone, the continuous development, modernization and expansion of mobile applications is essential.

The rise of artificial intelligence is also creating a new competitive situation. While trust in AI solutions is growing rapidly, it is of utmost importance for banks to maintain this trust. In this environment, K&H’s digital assistant, Kate, already represents a competitive advantage: a significant portion of new customers choose the bank specifically for this reason. The goal is to expand it with more new functions this year, while further increasing its level of autonomy and the proportion of active users.

“The large language models that underpin ChatGPT’s operation and the use of artificial intelligence, which is now considered almost traditional, will be crucial. True innovation works well when it naturally blends into the customer experience. And security does not hinder, but supports, fast and easy banking”

– added Gergely Lóska.

However, the banking of the future is not only a question of technology. Ecosystems related to shopping and life situations – from home creation to mobility – are gaining an increasingly important role. “Shopping, financing, insurance, maintenance and service solutions that can be managed in a single application can make everyday life truly convenient.” – added the expert.