2026 FinTech Predictions: Insights from Nick Merritt of Designit

We spoke with Nick Merritt, Executive Director at Designit, Wipro's experience innovation company, to hear his perspective on the shifts coming to financial services in 2026. With clients including BMW, Nokia, and Microsoft, Nick offers a unique lens on how banks and FinTechs must adapt to stay relevant in an increasingly complex landscape.

Over to you Nick - my questions are in bold.

What's the biggest shift you expect across financial services in 2026?

The biggest shift in 2026 will be the move from technology-led differentiation to relationship-led relevance across retail, commercial, and institutional banking.

For years, banks have competed on capability: apps, platforms, cloud migration, fraud controls, and analytics. But now? Those capabilities come as a given. Knowing your customer, or having strong fraud detection, for example, is no longer a competitive advantage but rather the minimum cost of entry.

What is changing is the nature of customer relationships. Retail banking customers no longer have a single bank for life. Commercial clients spread exposure across multiple providers. Institutional clients rebalance silently and rationally. Loyalty was once a given, but now, with multiple options easily accessible, banks cannot rely on that.

Banks will therefore need to rethink who they are optimising for. More products and more channels aren't the answer - it's about relevance over time. The institutions that succeed in 2026 will be those that simplify how they work, reduce friction for customers and employees, and give people a reason to stay even when leaving is easy.

Which emerging technology will have the most practical impact on banks and the FinTechs that support them?

The most impactful technology will be the one that removes the most friction, not the one that attracts the most attention.

AI, automation, and cloud infrastructure will continue to underpin banking, but their value will come from simplifying operations and decision making. In retail, that means fewer steps and clearer journeys. In commercial and institutional banking, it means faster credit decisions, clearer accountability, and less repetition across onboarding, risk, and servicing.

From a service design perspective, technology should reduce the burden placed on both customers and employees. Too often, it has done the opposite, reinforcing broken processes at scale. The FinTechs that succeed in 2026 will be those that help banks integrate and simplify technology rather than add another layer. When technology is doing its job properly, customers do not notice it. They simply experience a bank that is easier to deal with.

What customer behaviours or expectations will most challenge banks and financial service providers?

The most challenging behaviour will be customers' willingness to disengage quietly. Retail customers now multibank as a default. They separate spending, saving, investing, and borrowing across platforms that suit specific needs. Commercial and institutional clients do the same, distributing their wallet share based on speed, reliability, and ease of doing business rather than brand loyalty.

This creates a subtle but dangerous dynamic - it becomes easy for banks to confuse usage of their services with a strong relationship.

Across all segments, customers expect banks to provide clarity, not judgement. Support, not suspicion. As affordability tightens and macro-economic volatility increases, customers will gravitate towards institutions that help them navigate complexity rather than add to it.

What risks or blind spots do you think the industry is underestimating as we move into 2026?

One major blind spot is the belief that complexity is inevitable. Regulation is essential, and compliance will become a competitive advantage in 2026, but much of the friction customers and employees experience is self-inflicted by the banks themselves. Layers of process, duplicated controls, and fragmented systems have built up over time, justified by history rather than necessity. This slows decision making, erodes accountability, and damages trust.

Another underestimated risk is employee experience. As banks reduce headcount and increase outsourcing, remaining teams are left managing greater complexity with less autonomy. In commercial and institutional banking, this directly affects client confidence. When employees cannot act decisively, clients feel it immediately.

If you were advising a bank's leadership team today, what strategic priority should they focus on to stay competitive in 2026 and beyond?

The strategic priority should be purposeful simplification in service of long-term relationships.

Too often, financial institutions are distracted by outward-facing virtue signalling when it comes to their technological capabilities that they've actually forgotten the real question, which is that people should bank with them.

Leadership teams also need to challenge the assumption that legacy ways of working are fixed. Processes, products, and structures should exist to serve customer and employee outcomes, not organisational convenience. For retail banking, this means clearer journeys and fewer touchpoints. For commercial and institutional banking, it means faster decisions, clearer ownership, and continuity of relationships despite internal change.

From a service design perspective, this is about reallocating value away from internal noise and towards meaning, such as reducing fragmentation and designing for trust over time. But it is important to note that while technology will enable this, it will not lead it. When technology becomes a commodity, relationships become the real infrastructure of banking.

Thank you to Nick Merritt for sharing these insights. You can connect with Nick on LinkedIn and learn more about Designit.