Strong wealth management and IPO pipelines to underpin Hong Kong bank growth in 2026, says KPMG
- Written by Media Outreach
KPMG's latest report, the Hong Kong Banking Outlook 2026, expects Hong Kong banks to capitalise on the strong wealth management pipeline and a revitalised IPO market, deploying capital where risk-adjusted returns appear most attractive. The report also spotlights the key priorities for the year ahead: advancing digital assets, embracing AI innovation, and fostering closer collaboration between private banks and asset managers to strengthen Hong Kong's position as a world-leading centre for offshore private wealth management.
Paul McSheaffrey, Senior Banking Partner, Hong Kong SAR, KPMG China, says: "As we enter 2026, KPMG is more optimistic about Hong Kong's banking sector. The strong performance of Hong Kong's equity market in 2025 has significantly lifted sentiment. Recent policy initiatives, including efforts to strengthen the city's fixed-income market and to support Chinese Mainland enterprises in 'going global' through Hong Kong, provide further confidence in the future. We expect increased bank investment and hiring to follow."
Jianing Song, Head of Banking and Capital Markets, Hong Kong SAR, KPMG China, says: "In 2026, AI will evolve from a support tool to a core driver of competitiveness for Hong Kong banks. Banks are increasingly focused on productivity gains, on measuring ROI, and on embedding AI across operations in a way that delivers tangible benefit. In corporate banking, this shift may finally see paper, physical signatures, and batch processing phase out."
Tokenisation moves beyond proof of concept Hong Kong is positioning itself as a global leader in digital assets, with banks conducting real-world transactions using tokenised deposits through the Hong Kong Monetary Authority's Project Ensemble1. A wave of stablecoin licence applications is also underway, and tokenised gold is being issued. Looking ahead to 2026, KPMG expects traditional banks and the digital-asset ecosystem to move closer together. Banks will likely begin offering services such as digital-asset custody and a broader range of tokenised products as the regulatory framework becomes clearer.
Simon Shum, Head of Digital Assets, Hong Kong SAR, KPMG China, says: "The pace of change will only accelerate this year. Banks should focus on building their blockchain expertise, ensuring governance and controls are robust, and staying close to regulatory developments, particularly around AML, cybersecurity and risk management, as the digital asset ecosystem continues to evolve rapidly."
Rising threats push banks toward automation-led cyber defence As Hong Kong banks accelerate toward a digital-first future, the cyber threat landscape will remain a critical challenge in 2026. KPMG expects threat actors to increasingly leverage AI and automation to identify vulnerabilities with greater speed and precision, while attacks through third parties and the broader digital ecosystem continue to rise. For banks, this means cyber resilience will become an even more pressing board level priority. The HKMA will continue expectations around technology risk management, clear accountability for cyber risk, and the ability of banks to maintain critical services and recover swiftly when incidents occur.
Lanis Lam, Partner, Technology Risk, KPMG China, says: "As rising cyber risks, evolving technology, and shifting regulatory expectations redefine the landscape, banks in 2026 must strategically prioritise three areas: real-time threat detection, governance of third-party dependencies, and seamless integration between technology, risk, and business functions to drive cohesive and effective responses. Ultimately, automation should be a core enabler of cyber resilience, not just a tool for efficiency but a catalyst for proactive defence and operational agility."
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