Kathryn Dodds, Partner, gunnercooke LLP

Today we're delighted to speak with Kathryn, Partner at gunnercooke LLP, a leading provider of legal, compliance and GTM services to FinTechs with a premier global Web3 team.

As we head into 2026, Kathryn shares her insights on the institutional adoption of DeFi, the infrastructure blind spots threatening the industry, and why banks must modernise their core systems to remain competitive.

Over to you Kathryn - my questions are in bold:

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

The biggest shift in financial services in 2026 will be the transition from experimentation with DeFi to its use as institutional-grade market infrastructure.

Institutional DeFi will move beyond pilots and proofs of concept into live environments where it's used for settlement, collateral management, liquidity, and intraday funding. Tokenised real-world assets, regulated stablecoins, and permissioned liquidity pools, like the direction we are already seeing with protocols such as Aave, will become normal tools rather than edge cases.

A key shift is where trust and control sit. Instead of relying purely on intermediaries and end-of-day reconciliation, trust will increasingly be embedded in the infrastructure itself: atomic settlement, real-time transparency, programmable compliance, and smart contracts operating within recognised legal frameworks.

Crucially, this doesn't replace traditional finance, it re-wires it. Clearing, margining, and reporting become continuous rather than batch-based. Liquidity becomes more dynamic, and jurisdictions like the UK, with deep capital markets, strong legal foundations, and a pragmatic regulatory approach, are well positioned to lead this shift.

By 2026, the institutions with the advantage won't be the ones talking most loudly about DeFi, they will be the ones quietly using it as a new operating layer for financial markets.

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

Not a single flashy technology but the combination of real-time money rails, AI-enabled automation, programmable compliance, and modernised post-trade infrastructure.

Specifically:

• real-time payments and settlement, reducing liquidity drag and settlement risk;
• AI-driven automation of compliance, risk, and reporting, turning manual, reactive processes into continuous, real-time oversight; and
• tokenised representations of traditional assets on regulated rails, enabling faster collateral movement and more efficient balance-sheet usage.

These technologies don't replace banks, they re-wire how banks operate. Together, they dramatically reduce cost, risk, and friction. The banks that combine real-time infrastructure with AI-driven decision-making will be structurally more competitive than those that digitise the front end but leave the core untouched.

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

Customers now expect:

• instant settlement;
• transparent pricing;
• always-on availability; and
• services embedded directly into their workflows, for example, AI-driven features in apps that proactively help with budgeting, cash-flow forecasting, and spending decisions.

The biggest challenge is that customers no longer care who provides the service, only that it works instantly, reliably, and at a low cost.

This puts pressure on banks to compete not just with other banks, but with platforms, fintechs, and non-financial brands.

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

The biggest blind spot is infrastructure.

Many institutions are running modern customer experiences, on top of decades-old core systems. This creates:

• hidden operational risk;
• fragile settlement and liquidity processes; and
• limited ability to respond to market stress.

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

I would advise them to focus on owning and modernising their core financial infrastructure, not just launching new digital products.

That means:

• investing in real-time settlement and liquidity;
• treating compliance and risk as programmable systems;
• partnering or acquiring rather than building everything in-house; and
• designing for interoperability, across fintechs, platforms, and jurisdictions.

The banks that win in 2026 won't be the ones with the best app, they will be the ones whose infrastructure lets them move faster, cheaper, and more safely than everyone else.

Many thanks to Kathryn for sharing her insights with us. You can connect with Kathryn on LinkedIn and learn more about gunnercooke LLP on their website.