Guidance on digital assets, changes to bank supervision, new and novel bank charters flooding the market, increased M&A activity, guidance on third-party risk, bank capital, and more! These are just a few of the changes we are expecting in 2026.
This year is shaping up to be a year of material developments in bank regulation, especially as they relate to technological developments and the future of finance. Indeed, we are in the midst of the most significant changes to the financial institution ecosystem and its regulation since the Great Financial Crisis and the Dodd-Frank Wall Street Reform and Consumer Protection Act. In this article, we focus on what we think are the five most important developments to watch in 2026. These developments include changes and potential changes in bank regulation related to digital assets, supervisory expectations, financial institution chartering, mergers and acquisitions, and third-party risk management.
Digital Assets
First, perhaps the most dynamic area for potential changes in bank regulation this year is in digital assets. We have seen and will continue to see an increased focus on digital assets and their interaction with the traditional financial system in the United States and globally. After the passage of the GENIUS Act in 2025 and the statute’s generalized acknowledgement that banks are essentially the favorite children in terms of the ability to issue payment stablecoins, it is reasonable that in 2026 we’ll see more banks and traditional financial institutions interacting with payment stablecoins and digital assets on a much broader scale.
To this point, there are strong use cases that traditional financial institutions are considering. These include not only stablecoins as a payment mechanism, but also tokenized deposits, tokenized real-world assets, custody of digital wallets for safekeeping of customers’ digital assets, and trading in digital assets and crypto markets.
It is absolutely the case that digital assets and blockchain, or distributed ledger technology, are already changing the plumbing of the global financial system so it is critical that banks and other traditional financial services companies not only pay attention to developments in this area, but also learn about the technological changes and craft strategies on how to integrate, build, or partner with them.
Changes To The Supervisory Approach
A second key development for 2026 that we’re watching closely is the potential changes to the federal banking agency’s supervisory approach. One of the critical developments we’ve already seen was the issuance of the Federal Reserve Board’s Statement of Supervisory Operating Principles1 (the “Statement”) in late 2025. The Statement indicated essentially that their supervisory expectations and approach will be more targeted going forward to focus on material financial risks and less so on soft risks such as reputational risks, or on “processes, procedures, and documentation that do not pose a material risk to a firm’s safety and soundness.”
The changes to supervision will, according to the Statement, “make supervision more effective by allowing examiners and other supervisory staff to prioritize their attention on a firm’s material financial risks.” The rubber meets the road when we start hearing and seeing how this is implemented in practice with actual examinations and findings, but the change in approach seems welcomed by the banking industry. This change in approach was also expected when the new administration took over and the President began nominating leadership at the Federal banking agencies. We expect more to come on supervision, especially as it relates to enforcement actions. The focus will certainly be on material financial risks, but query how soon some of the non-financial enforcement actions, matters requiring attention (“MRAs”), and matters requiring immediate attention (“MRIAs”) could be removed. Time will tell, but 2026 will see movement away from the historical enforcement perspectives of the federal banking agencies.
Chartering New Banks
Third, the bank-chartering process has gained much more interest of late especially in light of the Office of the Comptroller of the Currency’s (OCC’s) adoption of an approach that indicates a more flexible and more favorable regulatory approach to the chartering of new banks, trust companies, and other financial institutions, especially those that may be focused on more limited areas of activity, such as digital assets and financial technologies. Interestingly, while it has been years since we’ve seen real movement in de novo banks or new trust company charters approved by the OCC, there have been inconsistent market reactions to some of the approvals that have been granted by the OCC.
Some commentators seemed to have the perspective that the OCC is being too loose with its chartering authority while others are encouraged by the fact that we are seeing so many new charter applications and approvals. Regardless of the market perspectives, it seems that 2026 will be a year in which we finally see a material number of new charters approved. This dynamic leads us into what we view as the fourth key development for 2026.
Mergers, Acquisitions, and Strategic Transactions
At the same time that we see an expansion of the market with new charters, we also expect, and are in fact already seeing, a pickup in mergers, acquisitions, and other kinds of strategic transactions taking place by and among traditional financial institutions. This is something that many industry insiders have expected over the last few years, especially given the significant number of small financial institutions that didn't seem to be making enough money to really compete or take advantage of traditional economies of scale. However, the mergers and acquisitions market does show evidence of thawing after being relatively frozen in the wake of the COVID pandemic and bank failures in 2023.
Larger community banks and regional banks seem to be exploring opportunities to expand through mergers or acquisitions to gain market share, expand deposit bases, expand geographic scope, and ultimately, exploit larger economies of scale. Additionally, it is critical to note the strategic opportunities to acquire companies providing specific technology integral to the provision of financial products and services in both the retail and commercial contexts.
We also see that this market will see more mergers and acquisitions because of the more favorable environment related to the regulatory applications process, which for years has been viewed as a barrier to getting deals done, instead of just part of the process. There is a concerted effort to streamline the timeline and expectations for the review of bank mergers and acquisitions, as well as other regulatory applications. This is clearly a positive development given that some larger bank mergers have taken years to receive approval.
Third-Party Risk Management
The final key development for bank regulation in 2026 is in third-party risk management. This has become increasingly important due to the growth of banking activities and their integration with advanced technologies like artificial intelligence, blockchain, and digital assets. As the federal banking agencies have reminded us in the past, with each of these new and developing technologies come certain specific and enhanced risks related to compliance and operations.
Artificial intelligence, machine learning credit models, and automated compliance tools are now embedded in core banking operations. Federal banking agencies are unlikely to prohibit such technologies, but we should expect that they will use the third-party risk management framework to develop enhanced expectations around governance, monitoring, and liability. We expect further guidance clarifying expectations around oversight of critical service providers, contractual audit rights, and incident response protocols. Importantly, state and federal bank regulatory agencies are increasingly holding banks accountable for partner misconduct, regardless of contractual allocation of responsibility. The common expectation that you can outsource the activity, but you can’t outsource the responsibility, will continue to remain true, especially in the consumer financial products and services market.
Conclusion
These are just five of the material developments that we are expecting to see in bank regulation in 2026. There will certainly be more material developments in bank regulation related to concepts such as preemption, de-banking, and fair access, as well as critical developments in core components of bank regulation, such as bank capital requirements and liquidity expectations.
Reprinted with permission from The Review of Banking & Financial Services. All rights reserved.
