Trend Sight 2026

Trend Sight 2026

General Developments Digitalization Sustainability Internationalization Integrity and Criminal Behavior

Trend Sight 2026 addresses important trends and risks in the financial sector, providing background, depth, and coherence regarding relevant supervisory topics. Early detection and understanding of changes in the sector contribute to a risk-oriented, forward-looking, and preventive supervisory approach.

Risks in the Financial Sector Trends

ACCOUNTABILITY FOR TREND SIGHT 13 NOVEMBER 2025

Trend Sight 2026

In Brief: Heightened geopolitical and international tensions form a breeding ground for instability and possibly the precursor to a more fragmented global financial system. For now, markets have remained resilient. Cryptos, stablecoins, and private markets are gaining ground worldwide. The rise of AI in the financial sector offers opportunities but also requires attention to risks and the strengthening of digital resilience and autonomy. AI also leads to a new generation of digital fraud and scams. The increasing economic risks of climate change emphasize the importance of the sustainability transition and reliable sustainability information.

ACCOUNTABILITY FOR TREND SIGHT

Table of Contents Introduction 3 General Developments 3 Digitalization 6 Sustainability 7 Internationalization 7 Integrity and Criminal Behavior 8 Regulation 10 Trend Map 2026: Which Trends Do We See? 11

1. Financial Services 12 General Developments 13 Digitalization 16 Sustainability 17 Internationalization 18 Integrity and Criminal Behavior 19
2. Capital Markets 22 General Developments 23 Digitalization 23 Sustainability 25 Internationalization 26 Integrity and Criminal Behavior 27
3. Asset Management 30 General Developments 31 Digitalization 33 Sustainability 35 Internationalization 36 Integrity and Criminal Behavior 36
4. Accounting and Reporting 39 General Developments 40 Digitalization 42 Sustainability 43 Internationalization 44 Integrity and Criminal Behavior 46

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Introduction In Trend Sight, the AFM provides an overview of the important trends and risks in the financial sector. Early detection and understanding of changes in the sector contribute to a risk-oriented, forward-looking, and preventive supervisory approach. In this way, we fulfill our mission to strive for fair and transparent financial markets and contribute to sustainable financial well-being. Chapters 1 to 4 outline the most important trends and risks for our four supervisory areas – Financial Services, Capital Markets, Asset Management, and Accounting and Reporting. Two in-depth analyses accompany this publication: one on hyper-personalization in the online choice environment and the other on chain dependencies in capital markets. These are published separately.

General Developments This time is characterized by heightened geopolitical and international (trade) tensions. The international climate has become noticeably more unstable, as evidenced by ongoing conflicts, wars, and hotspots in various parts of the world and increasingly sophisticated and coordinated cyberattacks on digital systems and critical processes. The awareness that this can also lead to societal disruption in the Netherlands is growing. Consequently, the urgency to increase our societal resilience is also increasing. This is reflected not only in sharply rising defense investments and attention to strategic autonomy but also in initiatives towards businesses and citizens to prepare for possible disruptions to vital (economic) processes. In terms of trade, the announcement of import tariffs by the US government on April 2, 2025 ('Liberation Day') sent shockwaves through the global trading system. Subsequently, many tariffs were temporarily frozen, and agreements were concluded with various countries, using tariffs as a strategic pressure tool.

The heightened tensions and erratic trade policy create significant uncertainty, putting pressure on economic growth and financial stability worldwide. Various indices show that uncertainty in the past year has been much higher than the long-term average (Figure on the next page). This increased uncertainty can pose a risk to economic activity, as businesses and consumers become more reluctant to invest and spend. Financial markets, energy prices, and exchange rates can also react strongly to increased uncertainty.

Despite ongoing uncertainty regarding trade policy, financial markets have remained quite resilient. After the sharp market correction following Liberation Day, equity markets recovered to high valuation levels. Corporate credit spreads have also fallen, and market volatility has decreased. A notable development in financial markets is the depreciation of the dollar. In the first half of 2025, it fell by 11%, the largest drop in more than 50 years. The effects of the geopolitical situation on the real economy – also for the Netherlands – are so far manageable, but uncertainty remains high.

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Figure: Uncertainty indices have been well above the long-term average in the past year. Long-term average GPR January 1, 2005 2020 August 1, 2025 Geopolitical Risk Index (GPR) Index Heightened tensions and erratic trade policy create more uncertainty. In the past year, these two uncertainty indicators were significantly above the long-term average. January-August 2025 0 200 400 600 Explanation: GPR is the Geopolitical Risk Index; data downloaded from www.matteoiacoviello.com on September 29, 2025; EPUI is the Economic Policy Uncertainty Index; data downloaded from www.policyuncertainty.com on September 29, 2025.

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Trade barriers and increasing rivalry between economic blocks may be the precursor to a more fragmented global financial system. The growing emphasis on national self-reliance and strategic autonomy contributes to decreasing cross-border capital flows. And, in case of further escalation, possibly to the introduction of capital restrictions, limited access to international payment and settlement systems, or the Federal Reserve limiting its swap lines with the Eurosystem in potential stress situations. Furthermore, the declining dominance of the dollar as the world's reserve currency – partly due to concerns about the sustainability of US debt – and the rise of digital currencies point to a shift towards a multipolar monetary system. Fragmentation makes the global financial landscape less stable and predictable, hinders efficient capital allocation, increases risk premiums, and could lead to significant welfare losses in the long term.

Markets for crypto and stablecoins are gaining influence, and the importance of private markets is increasing. In the United States (US), crypto markets are given considerable space to develop further under the Trump administration, and the use of stablecoins is also being facilitated. This is expected to increase the interconnection between crypto markets and the traditional financial sector and broaden the possibilities for decentralized finance (DeFi). The likelihood that risks from the crypto world could spill over into the traditional financial world is therefore increasing. Additionally, it may lead to a growing perception among consumers that investments in crypto and stablecoins are 'safe', while the risks are actually considerable. Another development is the global growth of markets for private equity and private credit. Retail investors are also gaining increasing access to these markets, while the risk profile of such investments may not be suitable for them.

1 'https://www.imf.org/en/Publications/FM/Issues/2025/04/23/fiscal-monitor-April-2025', IMF, April 2025.

Rising government debts in many countries pose a growing challenge to sustainable economic growth and the stability of capital markets. The average government debt of the ten largest economies rose from 63% of GDP in 2000 to 114% in 2023.1 Higher debt levels typically lead to rising bond yields, as investors demand higher risk premiums. This is also visible in the eurozone, where yields on government bonds have recently risen, including for France. Structurally high debt positions limit the policy space of authorities and increase financial vulnerabilities, especially during rate hikes or external shocks. Ongoing investor doubt about the debt sustainability of European countries could eventually lead to a weakening of confidence in the eurozone and thus in the euro.

Demographic developments are influencing the financial sector. Aging contributes to increasingly tight labor markets and thus to a slowdown in economic growth and possibly lower equity valuations. Older investors prefer less risky assets, which may reduce demand for equities and increase inflows into bonds and similar products. It is also becoming increasingly expensive to provide good pensions, and aging exacerbates concerns about public finances. Another demographic development is the entry of new generations into financial markets with different investment behavior. Generations such as Gen Z (born between 1997-2010) value convenience and speed highly, use traditional advisors less, and rely more on social media and networks when making investment decisions. This makes them more vulnerable to misinformation and impulsive financial behavior.

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Trust in public institutions is declining in many countries and is accompanied by a hardening of social relations. This undermines the effectiveness and legitimacy of policy, which is essential precisely in times of crisis. Increasing polarization makes political consensus on necessary but unpopular measures, such as reducing government deficits and implementing climate policy, more difficult. The reduced continuity and predictability of policy also create uncertainty for investors and businesses, leading to postponed investments and higher risk premiums. Due to declining trust in institutions, markets also become more sensitive to external shocks and volatility.

Digitalization The application of artificial intelligence (AI) in the financial sector seems to be accelerating.2 AI investments in the financial sector are expected to rise from $35 billion in 2023 to $97 billion in 2027.3 Although surrounded by uncertainty, studies predict that the application of generative AI (GenAI), such as large language models, could lead to productivity gains of 30% in the financial sector.4 Within GenAI, the development of 'agentic AI' appears to be entering a new phase. It is conceivable that such AI agents – systems capable of autonomous action and decision-making – will be increasingly deployed in the financial sector, for example in securities trading, portfolio management, investment research, and claims handling by insurers.5 Responsible use of AI is an important focus area for the AFM.

2 'https://www.allaboutai.com/resources/ai-statistics/finance/', M. Tilawat, July 2025. 3 'https://reports.weforum.org/docs/WEF_Artificial_Intelligence_in_Financial_Services_2025.pdf', WEF, January 2025. 4 'https://www.bankofengland.co.uk/financial-stability-in-focus/2025/april-2025', Bank of England, April 2025. 5 'https://medium.com/digital-banking-2030/agentic-ai-in-stock-markets-6a4c010da16b', A. Kumar, April 2025. 6 'https://www.spinquanta.com/news-detail/how-many-quantum-computers-are-there', SPINQ, March 2025. 7 'https://www.bis.org/publ/bppdf/bispap149.htm', BIS, October 2024. 8 'https://fd.nl/politiek/1557708/kabinet-wil-cloudbeleid-voor-hele-overheid?itm_campaign=pw_trial&itm_medium=paywall&itm_source=articles', FD, June 2025.

The development of quantum computing promises unprecedented computing power in the long term but simultaneously creates new challenges regarding cybersecurity. Worldwide, only a few quantum computers are currently in use – computers that use quantum mechanics to solve problems that are not computable for ordinary computers – and these still have relatively limited computing power. It is expected that this number and their computing capacity will (significantly) increase in the coming years.6 Although quantum computing offers important advantages (for example, in running stress tests or pricing assets), it can also lead to increased risks regarding cybersecurity. In principle, quantum computers could eventually be able to break (non-quantum proof) encryption algorithms used by financial institutions to ensure data confidentiality.7 Addressing these risks will require significant effort and investment.

Due to geopolitical tensions, discomfort regarding the large digital dependence on non-European service providers is increasing. In Europe, there is a significant dependence on American cloud service providers for data storage, both among (financial and non-financial) companies, citizens, and governments. Cybersecurity solutions are often integrated into these services. Additionally, payment traffic is strongly dependent on American market participants, such as Visa and Mastercard. If access to these essential services is restricted, this could lead to operational system risks for the financial system and cause trust in the market to vanish. The development of alternatives to these American services and the further deepening of the European capital market can increase Europe's strategic autonomy in this regard.8

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Increasing digitalization requires ongoing attention to cybersecurity, also in light of the current geopolitical situation. The heavy dependence on IT systems and the use of AI, which utilizes large amounts of data, makes the financial sector vulnerable to cyberattacks (whether by state actors or not). These can affect essential parts of the financial system, such as the payment system or trading infrastructure. With the introduction of the European Digital Operational Resilience Act (DORA), an instrument is available to strengthen the digital resilience of the financial sector – including the entire chain of ICT service providers.

Sustainability The economic risks of climate change are increasing and emphasize the importance of the sustainability transition. Extreme temperatures, heavy rainfall, and prolonged droughts are increasing in severity and frequency. These events are often accompanied by significant economic damage.9 These risks affect the financial sector, for example through insurance payouts, asset write-downs, and credit losses for banks. To address climate risks and adapt our society to the consequences of climate change, a transition is needed that requires large investments. The financial sector plays an important role in financing this. Although the market for sustainable finance has grown in recent years, it is still limited in size compared to the total market.10

The impact of geopolitical developments on the sustainability transition is not yet unambiguous. On the one hand, increasing geopolitical uncertainties contribute to a growing focus by governments on energy security and affordability. This could hinder the sustainability transition and the phase-out of fossil energy sources. On the other hand, due to geopolitical unrest, the pursuit of greater energy independence by countries and the intended further development of European energy infrastructure could actually provide further impetus to the sustainability transition.

It is clear, however, that sentiment regarding the pursuit of sustainability goals by (financial) enterprises has become more negative. This is manifested, among other things, in enterprises and financial institutions relaxing or scaling back climate goals and ambitions. This is most prominent in the US. We also see financial institutions withdrawing from voluntary sustainability partnerships. This movement in the sector cannot be seen separately from the political climate, which increasingly (and again particularly in the US) allows for less priority to be given to ESG policy. These developments potentially increase climate risks and could (in the long term) have a further escalating effect on risks for the financial sector.

Additionally, the risks of legal liability for companies due to failing to meet previously promised sustainability efforts may be increasing.11

Internationalization Hardened international political relations hinder the creation of global agreements and rules. As a result of geopolitical dynamics, changing power relations, and the explicit focus on national interests in some countries, international political relations have hardened in recent times. This makes it more difficult to reach agreement within multilateral bodies such as the IMF and IOSCO, which can affect their effectiveness and impact. This can hinder a rapid response to shocks and make it harder to align standards globally. At the same time, rules in some areas are diverging more and more. This applies, for example, to sustainability, where Europe has introduced relatively strict reporting requirements, while the US largely uses voluntary standards. Also in the field of international trade, countries are increasingly concluding bilateral or regional trade agreements instead of global rules via the WTO. This results in differences in norms, standards, and obligations.

Within Europe, work is underway to simplify and modernize (financial) regulation. In February 2025, the European Commission proposed measures to reduce the regulatory burden on businesses and strengthen the competitiveness of the European economy. For example, in the so-called Omnibus package, it is proposed to simplify and streamline sustainability regulation for (financial) enterprises. For the recently entered into force Corporate Sustainability Reporting Directive (CSRD), the proposals include, among other things, a reduction in the number of enterprises subject to this regulation.

In March 2025, the Savings and Investments Union (SIU) was launched. This is a renewed vision of the long-running initiative for a European capital markets union. The SIU aims to give a boost to the European financing and investment market, thereby strengthening Europe's competitiveness. The key point is mobilizing savings towards productive investments; this is done by giving European citizens broader access to capital markets. It is expected that the European Commission will present further elaborated initiatives in the fourth quarter of 2025.

With the establishment of the Anti-Money Laundering Authority (AMLA), European cooperation has intensified in combating money laundering and terrorist financing and in complying with sanctions regulations. Preventing and combating money laundering and terrorist financing and complying with sanctions regulations requires continuous attention. An important step is the establishment of the European authority AMLA, which has been operational since mid-2025 and will assume direct supervisory responsibilities from 2028. Existing directives are also being tightened, with uniform rules for customer due diligence, transaction monitoring, and reporting of suspicious activities, and cooperation and coordination between national Financial Intelligence Units (FIUs) are being promoted.12

Integrity and Criminal Behavior AI and crime-as-a-service are catalysts for digitized criminality. The rapid development of artificial intelligence, particularly generative AI, combined with the rise of crime-as-a-service – which makes it possible to outsource parts of the criminal business process, such as recruiting victims or laundering criminal proceeds – leads to a new generation of digital fraud. AI makes it possible to carry out fraud and scams on an industrial scale, with minimal technical knowledge and low costs. This makes large-scale and sophisticated crime more accessible than ever. Criminals use AI to generate deepfakes, voice cloning, synthetic identities, and advanced phishing campaigns, allowing traditional detection mechanisms to be bypassed. The spread of these forms of fraud then occurs at lightning speed via social media. Platforms such as Instagram, TikTok, and Telegram are actively used to recruit new victims, often under the guise of investment advice or success stories. Here, the boundary between marketing and manipulation or fraud blurs. These developments undermine consumer trust and make the fight against online fraud increasingly an international matter. Criminal networks operate across borders and use digital infrastructures that transcend national supervisory boundaries. This requires a coordinated, international response where supervision, technology, and cooperation come together. Organizations such as IOSCO and FATF play a central role in this.

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Crypto service providers (CASP's) are exposed to high risks of money laundering, terrorist financing, and circumventing sanctions. CASP's must possess a Markets in Crypto-Assets Regulation (MiCAR) license or notification and fall under anti-money laundering regulations and sanctions regulations. As gatekeepers...