The structural forces reshaping financial services might sound familiar. The strategy shifts they demand are not. Explore 3 things smart FIs must consider to be at the forefront of financial services innovation.
Rapid technology advances, budget pressure, industry consolidation, and evolving consumer expectations for digital-first experiences aren’t new trends. But they’re converging faster than most FIs are moving, and that gap is a real risk to short-term growth and long-term health.
In SRM’s 2026 Financial Services Outlook Report, we examine how these interconnected forces (and others we’ll explore in detail in future articles) are shaping strategy, scale, and competitive positioning to enable financial institutions to approach familiar themes with a new sense of urgency and intention.
This blog explores three keys to help FIs make the most of this moment:
1. Focus M&A on value creation, not just scale
Economic pressures notwithstanding, the M&A environment has become much more than a survival tactic. Instead, it’s about building the capacity to invest in new capabilities.
In the U.S., over 180 bank and 90 credit union M&A deals were announced last year, and 8 credit union-bank acquisition deals.
Conversations that once centered on whether to pursue M&A are now focused on how and how quickly to move forward, a sentiment that credit union leaders echoed at the recent CUES Symposium. A combination of upcoming CEO retirements, increasing operational complexity, and pressure to scale is compressing decision time.
But as the 2026 Outlook report reveals, consolidation isn’t a strategy by itself. For example, it’s not enough to simply ask, “Should we acquire or be acquired?” Instead, financial institutions need to look at mergers and acquisitions through a value-creation lens. After all, combining with another organization is a gargantuan drain on valuable time and resources that FIs can’t afford to waste.
The most successful combinations require a shared vision and improved value proposition, using increased scale to:
- Modernize technology platforms
- Improve customer/member service
- Build a foundation for a data-driven, AI-enabled future
The current regulatory environment is also prompting more M&A activity. With accelerating timelines for transaction approval and greater openness to non-FIs, more buyers are entering the market.
While such regulatory easing makes it a good time to evaluate prospective M&A deals, it also lowers the barriers to entry for fintechs and other non-FIs. These organizations already are reshaping consumer expectations with unbundled banking experiences: lending at the point of sale, financial planning inside apps, payments embedded in marketplaces and financial planning tools.
Rather than fearing competition, however, financial institutions must seize the opportunity to redefine what creating value for customers and members truly means.
Central to that effort: Making financial services more personalized.
2. Deliver more personalized experiences to match (and adapt) to evolving consumer expectations
Digital transformation has been at the forefront of most FI strategies since mobile phones became ubiquitous. In practice, though, many institutions still invest more in propping up aging technology rather than creating something genuinely new.
Meanwhile, demand for digital-first financial experiences continues to grow.
Adaptive, agile fintechs have shown that consumer loyalty can be won and retained through digital-first, instant onboarding, seamless self-service, and speedy iterative feature rollouts based on user data.
Crucially, digital transformation is much more than a convenience play. The vast majority (74%) of users logging into their FI’s mobile app or online banking portal want more personalized banking experiences, according to a Harris Poll highlighted in the report.
“Institutions who truly understand their consumers and can translate data into ‘known-and-supported’ experiences will retain primacy and deepen loyalty,” predicted Mark Sievewright, Chief Strategy Officer at SRM, and a co-author of the report. “Done well, this turns service from ‘reactive’ to ‘proactive.’”
That means going beyond periodic statements and general promotions and offering contextual, timely insights that help consumers make more confident financial decisions. It’s not about promoting savings across your base, for example. It’s about tailoring your advice to a specific user’s spending patterns and cash flow.
Deploying that level of personalization will require FIs to overcome one of their most persistent challenges — using data more effectively.
3. Do more with data so technology advances don’t leave you behind
Just as consumer demands for personalization are pushing FIs to use their data more effectively, technology advances also require more robust data management capabilities. Generative artificial intelligence and large language models can’t deliver on the promises of productivity, fraud prevention and risk management, more efficient customer/member service, or more personalized experiences if they can’t pull in the right data.
Fifty-six percent of FIs must rely on their core provider to access data while 41% still use spreadsheets to manage data used by business lines, according to Bank Director data cited in the report. In a real-time world that increasingly runs on and adapts to data, financial institutions that can’t make the most of their data will fall behind.
One approach SRM’s Cynthia Schroeder recommends is combining an integrated data warehouse, which provides the structure for data analysis, with a modern middleware solution to serve as the critical connector that enables diverse systems to seamlessly communicate and feed data into it. The combined power transforms static data into dynamic intelligence that FIs need to adapt and thrive amid ongoing change.
The Bottom Line
We are living through one of the most profound periods of change the financial services industry has ever experienced. The institutions that will lead aren’t just moving faster — they’re asking better questions, making smarter combinations, and building the data foundation to turn customer insight into personalized experiences.
Learn more about reframing your strategy with the key insights from our recent SRM 2026 Financial Services Outlook Report.
Posted by: Mark Sievewright, Casey Merolla, Prakash Natarajan, Steve Shaw
