AI, Crypto, and Fraud, Oh My: The 2026 Banking Forecast

Hey everybody. Welcome to the first episode of the What’s Going On in Banking podcast for 2026. I’m Ron Shevlin, chief research officer at Cornerstone Advisors, here as always with Stacey Bryant, our director of client development.

Stacey, happy New Year.

Happy 2026, Ron. How are you doing?

Doing great. I cannot believe we crossed the line into the new year already. Time is moving fast. Q4 was a blur.

It really was. And the holiday season took me out again with some kind of fever, flu, upper-respiratory situation, but your girl is back and ready to rock and roll.

I know we want to talk about a few things as we think about the new year. You gave me an early draft of the 2026 What’s Going On in Banking report, which made me feel like a VIP, and there are a few things I want to dig into.

But before we do that, I want to shout out all the winners from the GonzoBanker Awards we filmed and aired in December.

There were so many fintechs, community banks, and credit unions doing interesting work and genuinely changing the game. Those organizations become examples for other institutions trying to figure out how to do the same.

But the real winner, Ron, was the coquito.

The coquito.

For those who didn’t tune in, and you should, I brought a cold bottle of coquito all the way from New York City to Scottsdale, Arizona.

My parents are from the Dominican Republic, so this is a Caribbean holiday staple. Think of it as eggnog meets Caribbean and Latino flavors.

Everybody had a taste. Well, almost everybody seemed to enjoy it.

What happened to you, Ron?

I told you it was heavy on the rum.

People really need to go back and watch the video because Al Dominick and I both made almost the exact same face after the first sip.

That was completely unplanned.

I had decided I was going to make a dramatic face and joke about it. Then I swallowed wrong, breathed wrong, or did something, and I legitimately could not catch my breath.

People watching probably thought I was acting. I wasn’t. I had to leave the room because I was coughing and convulsing.

Al made the same face but managed to keep himself together.

You definitely left the room.

The chat during the GonzoBanker Awards was full of people asking, “What is coquito?” We ended up calling it Gonzo-quito in honor of the awards.

I shared the recipe on LinkedIn, so hopefully people made it without sending it down the wrong pipe.

How were the holidays for you? How did you kick off the new year?

Great. I got to see the grandkids, including my new granddaughter who was born in November.

Then some friends came up from Connecticut. We went into the North End of Boston for a great Italian dinner, and I managed to stay awake until midnight with my wife.

So I got to see the ball drop one more time.

There we go.

Happy New Year, and I’m looking forward to another year of predictions and industry insights.

No predictions.

Okay, fine. Maybe one prediction.

You had a chance to look at the draft of the report. It should be out toward the end of January, so let’s give people a sneak peek.

I’m putting a stake in the ground around three big themes for 2026.

They are not brand-new trends. They are continuations of things already underway: AI, crypto, and fraud.

The theme came to me through The Wizard of Oz, even though I would never put that movie on a list of my favorites.

For some reason, I keep going back to it for report and presentation ideas.

A couple of years ago, I used the characters as analogies for different people in banking and politics.

This year, I kept thinking about the scene where Dorothy, the Tin Man, and the Scarecrow are walking through the forest chanting, “Lions and tigers and bears, oh my.”

In my version, it is three bankers walking through the scary forest of the banking industry saying, “AI, crypto, and fraud, oh my.”

AI has already been a major trend for several years.

But I think 2025 was the year agentic AI and AI agents overtook generative AI as the most important new AI conversation.

Then the GENIUS Act put stablecoins and tokenization much more firmly on bankers’ radar.

Fraud has always been a problem, but AI, crypto, and tokenization are creating new types of fraud and changing the scale of existing threats.

So those are going to be major themes in the 2026 report.

When I say crypto, I’m focusing much more on stablecoins and tokenization than on Bitcoin speculation.

You read the draft. What surprised you or confirmed what you’ve been hearing?

A little of both.

I’m on the road constantly, whether I’m at bank conferences, credit-union conferences, fintech events, or strategic-planning sessions.

So I spend a lot of time hearing what CEOs and other executives say is keeping them up at night.

And I love the Wizard of Oz analogy. The Yellow Brick Road leads to the Wizard, and the Wizard is powered by a machine. That feels pretty fitting for where the industry is right now.

One thing I wanted to dig into is the top concerns for banks and credit unions.

For people who aren’t familiar with the report, Cornerstone surveys hundreds of executives from banks and credit unions and asks what they’re worried about, where they’re investing, and what they expect in the year ahead.

The first item that stood out to me was cost of funds.

It wasn’t in the top three or even top five concerns for either banks or credit unions this year.

Among bank respondents, 48% had cited cost of funds as a top concern for 2025. Going into 2026, that dropped to about 21%.

Among credit unions, it went from roughly 36% to 29%.

Why do you think concern declined that much?

I think the biggest driver is the interest-rate environment.

When rates are low, cost of funds generally does not rank high as an executive concern.

Going into 2025, people were still operating in an environment shaped by significant rate increases and uncertainty around whether that pressure would continue.

Going into 2026, the outlook is different. The expectation of continued rate increases has diminished.

So it makes sense that fewer executives list cost of funds as a top concern.

But I also think many bankers define cost of funds too narrowly.

One of the most frequently cited concerns in this year’s survey is deposit gathering.

And a lot of bankers will say, “We need deposits, but we’re not going to play the rate game.”

Fine. You can avoid competing purely on rate.

But you still have to spend money to attract deposits.

You may need new products, better marketing, new distribution, incentives, technology, or additional personnel.

Those are all costs of gathering funds, even if they don’t show up as interest expense.

So I’m not surprised that concern about interest-rate-driven cost of funds declined.

But if deposit gathering is one of your biggest priorities, you may be underestimating the operational and product costs required to get those deposits.

That makes sense.

On the other side of the survey, growth remains a major priority. New-customer growth increased as a concern and deposit gathering is still high on the list.

That immediately made me think about fintech competition.

One executive, Greg Burris from First Community Services, said threats from fintechs that displace traditional banking services are reducing optimism for the industry.

Think about PayPal, Chime, Coinbase, and all the partnerships they are building.

Coinbase is particularly interesting.

It is not only a crypto-trading platform anymore. It is adding things such as stock trading, AI-related financial tools, stablecoin payments, and infrastructure that businesses and financial institutions can use.

It has also been working with large banks such as Chase and PNC on pilot programs.

Coinbase increasingly looks like an infrastructure provider, not just a consumer crypto brand.

That is a different competitive threat.

You’re making a good connection.

For the last several years, we’ve asked executives how much of a threat they see from different types of competitors.

We separate large fintechs such as PayPal and Square from neobanks such as Chime. We have also asked about the U.S. government as a threat, particularly during periods when the regulatory environment was more burdensome.

This year, we added crypto providers.

About three in 10 respondents identified crypto providers as a meaningful threat.

I was actually surprised the number wasn’t higher.

The regulatory environment changed dramatically through 2025. The GENIUS Act helped legitimize stablecoins and, more broadly, digital assets.

And bankers may not yet fully appreciate what is happening with consumers.

We recently did a privately commissioned study on household financial behavior.

Among consumers under 50, the percentage putting meaningful amounts of money into crypto has increased sharply over the last 18 to 24 months.

Retail-focused banks and credit unions are beginning to see that money moving outside the traditional institution.

So growth, fintech competition, crypto, and deposit gathering are all tied together.

The broader message is that the structure of the banking industry is changing, and institutions need to decide how they are going to respond.

I spent part of the holiday season doing my own informal research.

I hosted 30 or 40 people at my house, which I loved, but I’m also very happy they have all gone home and I have my space back.

While everybody was there, I started asking people where they keep their money, how many accounts they have, and what they care about.

One family friend is in his early 30s, has a good job as a director at one of New York City’s top hospitals, earns good money, and has no kids.

He banks with Bank of America and SoFi.

I asked why he opened SoFi.

He said the rate initially attracted him, but the experience was so easy that he stayed.

Then I asked what matters most to him in managing his finances.

He said he wants to see everything in one interface: checking, savings, credit cards, debt, crypto, and retirement.

He uses Wealthfront to aggregate that picture.

He also said he wants the ability to move $50,000 or $100,000, even internationally, quickly and securely.

That made me think about what community banks and credit unions are doing to create a similarly unified experience.

Are they making it easy to see the customer’s full financial life? Are they making money movement seamless? Are they combining convenience with security?

Those expectations feed directly into the priorities we’re seeing in the report.

For years we’ve asked institutions which major systems they expect to replace or deploy in the coming year, things such as digital account opening, digital banking, loan origination, and data platforms.

Then we ask which systems they actually deployed during the year that just ended.

I track what I call the deployed-to-planned ratio.

Digital account opening is almost always near the top of the planned-investment list.

But it also consistently has one of the largest gaps between the percentage that says, “We’re going to do this,” and the percentage that actually gets it done.

Something always happens. Money gets reallocated. Another priority appears. The project takes longer than expected.

Going into 2026, about 40% of bank respondents said they plan to select or deploy a new consumer digital-account-opening system.

I will bet my bottom dollar that when we survey again at the end of 2026, nowhere near 40% will actually have completed it.

The interesting change this year is that digital account opening was not the top planned system for credit unions.

The top item was person-to-person payments.

That caught my attention because P2P is not traditionally a direct revenue generator.

I think it reflects concern about engagement.

Credit unions are watching members use Venmo, Apple, and other third-party payment tools and recognizing that every payment interaction happening somewhere else weakens the relationship.

That brings me to a story from almost 25 years ago, when I was at Forrester.

I became interested in customer engagement before the term was well defined.

At the time, the advertising industry defined engagement as something like the amount of time a person spent looking at an ad, which I thought was ridiculous.

I asked one of my colleagues, who had worked at Bank of America and Wells Fargo, to write about customer engagement in banking.

Her immediate reaction was essentially, “Bankers are going to hate this.”

But 25 years later, the industry finally seems to understand that engagement matters throughout the entire customer lifecycle.

That’s why more vendors are now calling their systems “engagement platforms.”

Onboarding is only one part of engagement. The institution has to continue creating useful interactions for years.

And that is true for both consumers and businesses.

That brings me to another part of the report: agentic AI and Model Context Protocol, or MCP.

You describe MCP as a kind of context or middleware layer that lets large language models connect to external systems and data.

One example in the report is a context-aware business alert.

Instead of a simple rule saying, “Your balance is below $10,000,” an MCP-enabled system could say, “Based on upcoming payroll and invoice-collection trends, you are projected to be short by $22,000 in nine days.”

That’s forward-looking and based on multiple data sources.

So when we think about engagement, retention, and growth, how much of a game changer could MCP become for institutions trying to use agentic AI?

How much time do we have?

This is deep, and we may need to continue the conversation in another episode.

I wrestled with how strongly I presented MCP in the report because it is not guaranteed to become the universal standard for everything.

There are weaknesses and alternatives.

But the underlying problem it addresses is real.

And you actually put your finger on it: data silos.

Banks have data in their core, loan systems, digital channels, CRM, payment platforms, and all over the place.

For years, the conversation has been about collecting more data.

“We need more customer data. We need more transaction data. We need better analytics.”

Okay. But what are you doing with it?

The real opportunity is using that data at the moment of interaction, transaction, or decision.

That’s where an interoperability layer such as MCP becomes interesting.

It can help AI systems pull context from multiple sources and actually act on it.

If that ultimately improves retention, lowers attrition, or drives growth, great.

But the foundational value is real-time use of data.

That connects to a prediction I want to retract from the last year or two.

I have told audiences that AI agents would eventually report to us like employees or teammates.

I’m backing away from that.

I think that framing is overblown.

Agents perform tasks. Humans perform jobs, which involve much more than completing a set of discrete tasks.

There may be job loss, but an AI agent is not simply another employee on the org chart.

A lot of today’s useful agents are specialized. One agent does one kind of task. Another handles something else. Then you need coordination layers to orchestrate them and connect them to systems and data.

That orchestration is what is not fully ready for prime time.

There are already agents that do individual tasks extremely well.

That’s different from robotic process automation, which is generally rules-based. If an RPA bot hits an unexpected situation, it may stop. An agent can potentially interpret the situation and decide what to do next.

And, of course, we still have a terminology problem.

I saw someone recently refer to “AI agents” when they really meant conversational agents in a call center.

Those are completely different things.

The vocabulary is getting worse, not better.

That’s a conversation we’ll have to keep having.

We definitely need to continue this because there is so much more in the 2026 report.

My last contribution today is a music reference.

You managed to work several songs into the report, and as a New Yorker I would add Jadakiss. He has a song that says, “We gon’ make it.”

Regardless of what 2026 throws at the industry, I think that’s the right energy.

Good one. I like that.

I’m personally disappointed because I wrote an entire What’s Going On in Banking report without a single Grateful Dead reference.

I can’t believe it.

I did get a Stevie Wonder reference in there, so I modernized a little.

Next episode, I’m going to start pushing you for your predictions for the year, even though I keep saying I don’t do predictions.

Hopefully by then the report will be out and we’ll have feedback from the industry.

Stacey, thanks as always for making this a great conversation.

And thanks to everybody for joining the first What’s Going On in Banking episode of 2026. Please subscribe, and we’ll see you on the next episode.

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