Nearly two-thirds (65%) of financial services leaders expect the sector to invest more into UK defence in 2026, with more than a quarter (27%) anticipating investment will rise “much more” over the next 12 months, according to KPMG’s UK Financial Services Sentiment survey.
The quarterly poll, which tracks sentiment among more than 150 leaders in the sector, also found that most firms (59%) say they will prioritise growth and resilience equally in 2026. 78% of insurers are balancing growth and resilience, followed by 64% of banks and 41% of asset and wealth managers.
The findings reflect a structural change in how the sector is defining risk and opportunity, as global instability, cyber threats and geopolitical fragmentation increasingly shape commercial decision-making.
KPMG asked leaders what they consider to be most crucial to safeguarding financial stability in 2026, the most prevalent response was ‘greater financial sector investment in national security’ (38%). Followed by:
- Preserving central bank independence in tackling inflation (36%)
- Stronger regulatory cooperation between the UK and US (35%)
- Improving bond market structure (29%)
- Regulation and oversight of private credit (29%)
- Curbing government deficits (25%)
- Advancing internationally agreed prudential standards such as Basel 3 (23%)
- Greater scrutiny of non-bank financial institutions (22%)
- Regulation of stablecoins and digital assets (21%)
“These findings point to a growing recognition that national security, geopolitical alignment and market integrity are now inseparable from the stability of the finance sector,” said Karim Haji, Global and UK Head of Financial Services at KPMG.
“What also stands out is the growing focus on private credit and non-bank finance as potential fault lines in a crisis. These markets have expanded rapidly and now sit at the centre of corporate funding, yet they are still less transparent and less tested in extreme stress than the traditional finance system.”
The research also found that firms now see a broad range of structural risks as threats to business next year. The top threats cited for 2026 are weak economic growth (23%), AI-enabled fraud (16%) and cyber resilience gaps (15%).
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