KPMG: The outlook for wealth management and IPOs in 2026 is optimistic, expected to support the growth of Hong Kong's banking industry

KPMG's latest report, "2026 Outlook for the Hong Kong Banking Industry," anticipates that the Hong Kong banking sector will seize the strong growth momentum in wealth management and the opportunities presented by the recovery of the IPO market, allocating capital to areas with the most attractive risk-adjusted returns. The report also outlines key development directions for the industry in the coming year, including promoting the development of digital assets, actively applying artificial intelligence (AI) innovative technologies, and fostering closer cooperation between private banks and asset management companies, further consolidating Hong Kong's position as a leading offshore private wealth management center globally.

KPMG's Senior Partner for the Banking Sector in the Hong Kong Special Administrative Region, Ma Shaohui, stated that as we enter 2026, KPMG is increasingly optimistic about the prospects for the Hong Kong banking industry. The strong performance of the Hong Kong stock market in 2025 has significantly boosted market confidence. A recent series of policy measures, including strengthening the development of the local bond market and supporting mainland enterprises to "go global" through Hong Kong, has further enhanced market confidence in the outlook. KPMG expects the banking sector to continue expanding investment scales and increasing talent recruitment.

Song Jianing, KPMG's Partner in charge of Banking and Capital Markets in the Hong Kong Special Administrative Region, indicated that by 2026, AI will evolve from a supportive tool to a core driving force for enhancing the competitiveness of the Hong Kong banking industry. Banks are increasingly focusing on improving productivity and return on investment, as well as fully integrating AI into operational processes to achieve substantial benefits. In the corporate banking sector, this shift may gradually eliminate paper documents, physical signatures, and batch processing workflows.

Looking ahead to 2026, KPMG expects traditional banks and the digital asset ecosystem to further integrate. As the regulatory framework becomes clearer, the Hong Kong banking industry is expected to launch digital asset custody services and more diversified tokenized products.

Shen Yaowen, KPMG's Head of Digital Assets in the Hong Kong Special Administrative Region, believes that the pace of development in the digital asset field will further accelerate this year. The industry should focus on enhancing blockchain expertise, establishing robust governance frameworks and internal control mechanisms, and closely monitoring regulatory trends, particularly in areas such as anti-money laundering (AML), cybersecurity, and risk management, to adapt to the rapidly evolving digital asset ecosystem.

However, KPMG anticipates that criminals will increasingly exploit AI and automation technologies to identify system vulnerabilities more quickly and accurately; at the same time, attacks launched through third parties and a broader digital ecosystem will continue to rise. For banks, enhancing cyber resilience will become an important priority at the board level. The Hong Kong Monetary Authority will continue to strengthen regulatory requirements, covering technology risk management, clear accountability mechanisms for cyber risks, and banks' ability to maintain critical services and quickly restore operations during emergencies.

Lin Haiyan, KPMG's Partner in Cybersecurity and Data Protection Consulting Services in the Hong Kong Special Administrative Region, stated that in 2026, banks must focus on three key areas: real-time detection and response to cybersecurity threats, governance of third-party vendors, and the integration of technology, risk, and business functions