European fintech in 2026: Opportunities and risks

As geopolitical tensions and trade disputes intensify across Europe, uncertainty is becoming a defining feature of the global economy. Coupled with increasing inflation and political instability, these factors can create a perfect storm for tough economic conditions.

For fintech, an industry built on agility and reliant on significant funding for product innovation, this environment poses a critical test. Investors, facing tighter margins and heightened risk, are likely to demand clearer paths to profitability. As a result, 2026 could mark a turning point, where the pressure is on to deliver results.

AI is rapidly gaining traction in the fintech sector, and its adoption is set to expand significantly over the next 12 months. While AI promises major efficiencies for users, concerns are emerging within the insurance industry about potential litigation tied to its growing use.

Adding to the debate, Jamie Dimon, Chief Executive at JPMorgan Chase, has raised concerns over an “AI bubble”, underscoring the need for careful risk management as the technology evolves.

As the world becomes more connected amid the current uncertainty, the demand for fast, cost-effective payment solutions is stronger than ever.

Stablecoins are reshaping the payments landscape, blurring the lines between digital assets and traditional fiat currencies. This signals a shift in how transactions are getting made, with nine major European banks announcing they’ve joined forces to launch an MiCA-compliant euro-denominated stablecoin. This is where the future of European payments is heading.

Regulatory oversight isn’t new for the fintech sector, but its spotlight is growing stronger. The European Union is introducing new and enhanced regulations, requiring business leaders to adapt quickly to meet changing compliance standards.

For today’s fintechs, staying ahead of these developments will be critical for maintaining trust and strengthening operational resilience.

Ransomware and other forms of cybercrime continue to cause widespread disruption across Europe, with incidents occurring on a daily basis – even among SMEs.

The need for robust cyber resilience and risk management controls has never been greater. As threat actors continue to evolve their techniques, these measures are essential for minimizing the impact of potential breaches and protecting business continuity.