Forrester has released predictions for 2026 highlighting the central role that artificial intelligence will play across banking, investing, and insurance sectors.
The research firm's annual outlooks outline how generative AI (genAI) is increasingly being used by consumers for financial advice and product discovery. Institutions are expected to respond with further AI adoption aimed at modernising systems, enhancing operational efficiency, and maintaining competitiveness in an evolving market environment.
AI adoption in banking
Forrester predicts that by 2026, the influence of artificial intelligence in financial services will further intensify. More than half of adults under 50 are likely to seek financial advice from genAI tools. The reports indicate that roughly half of online adults in the US and UK are using genAI applications such as ChatGPT, and a significant proportion are seeking recommendations or advice through these platforms. Despite a stated lack of trust in AI-generated results, actual usage continues to rise.
Financial service brands are expected to tread cautiously by adopting AI within rule-based frameworks that aim to manage risks associated with artificial intelligence, rather than deploying genAI without restrictions.
According to Forrester, another developing trend is the resurgence of digital banking entrants. Although established banks had moved away from purely digital brands, a new wave of technology-driven contenders is set to emerge, particularly in Asia-Pacific, Europe, the Middle East and Africa, and Latin America. This momentum is described as being propelled by regulatory support and efforts to foster financial inclusion. However, the report cautions that most new entrants may struggle to differentiate themselves or achieve sustainable growth, as technology alone is not enough to address competitive challenges in the banking landscape.
The rise of AI-powered search and genAI tools is estimated to reduce human web traffic by around 20 percent. In 2025, Forrester recorded that 39 percent of US and 43 percent of UK online adults familiar with genAI had discovered new products or services via these tools. In metropolitan China, one in ten recent loan applicants cited genAI as their primary research resource. By 2026, AI-powered search is expected to become an integral part of consumer decision-making in financial products and services.
Aurelie L'Hostis, principal analyst at Forrester, stated, "In 2026, AI will redefine every facet of financial services, reshaping how consumers seek advice, discover products, and interact with firms. While over half of younger consumers turn to genAI for financial guidance, financial institutions are rapidly deploying AI agents, modernising systems, and preparing for machine-led interactions. Trust remains a challenge, but the pace of change is relentless. To stay ahead, leaders must be ready for both the opportunities and disruptions AI will bring."
Insurance sector shifts
In the insurance sector, Forrester's predictions focus on adapting to declining customer satisfaction, the implications of rapid AI-driven operational changes, the growing cyber insurance market, and evolving underwriting methods for high-risk markets.
The forecast indicates that the global cyber insurance market is expected to expand by 15 percent in response to emerging AI-driven threats and the need for advanced data strategies. Whereas the sector experienced strong growth between 2017 and 2022 before slowing, AI developments are anticipated to rekindle the demand for cyber insurance. Insurers are also expected to move beyond providing financial compensation for cyber risks to offering enhanced cybersecurity services, tools for risk mitigation, and new models for underwriting.
Concurrently, Forrester projects that three property and casualty insurers will double their customer experience (CX) investments. This action follows continued declines in customer experience ratings for auto and home insurance providers in the US and Canada. To address this, insurers are likely to prioritise explaining pricing changes, personalising policies, and improving transparency in self-service channels and claims processes. The report asserts that such initiatives will provide demonstrable value to policyholders and support engagement efforts.
The microinsurance sector is forecast to grow by 5 percent alongside the expanding gig economy and rising demand from freelancers. With the gig economy expected to surpass USD $600 billion by 2025, insurance products have not kept pace with workers' needs. Forrester recommends that insurers focus on educating gig workers about insurance benefits, facilitating easier onboarding, and providing affordable and flexible products via digital platforms tailored for non-traditional employment.
"The insurance industry will face pivotal transformation in 2026 as AI reshapes operations across the value chain and carriers prioritise customer experience amid declining client satisfaction. AI will be a weapon and a threat creating rapid market expansion for cyber coverage. Novel underwriting will unlock high-risk markets, and the booming gig economy will create new microinsurance opportunities. Leaders must embrace AI-driven operational efficiency, invest in CX differentiation, and adapt for emerging market segments to stay ahead of competition." said Rohit Makhijani, principal analyst at Forrester.
Forrester's 2026 predictions reflect expectations that banking, investment, and insurance sectors will contend with significant opportunities and risks associated with artificial intelligence in the near future.
