Banking sector growth remains strong as amidst IPO pipelines surge

Digital innovation and regulatory alignment drive growth.

The region’s banking sector enters 2026 with a strong financial foundation, driven by highly liquid balance sheets and robust wealth management growth, according to the KPMG Hong Kong Banking Outlook 2026.

Banks are expected to capitalise on the strong wealth management pipeline and a revitalised IPO market.

Key priorities for the year include 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.

“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,” said Paul McSheaffrey, senior banking partner at Hong Kong SAR, KPMG China.. "We expect increased bank investment and hiring to follow."

Hong Kong is also positioning itself as a global leader in digital assets, whilst banks conduct real-world transactions using tokenised deposits through the Hong Kong Monetary Authority’s (HKMA) Project Ensemble, the report said.

KPMG expects traditional banks and the digital-asset ecosystem to move closer together, as they will likely begin offering digital services.

“The pace of change will only accelerate this year," said Simon Shum, head of digital assets at Hong Kong SAR, KPMG China. "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, whilst the digital asset ecosystem continues to evolve rapidly."

The report said that cberthreats remain a major challenge, making cyber resilience a top priority for banks.

HKMA will continue to emphasise 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, a partner for technology risk at KPMG China, said banks in 2026 must prioritise real-time threat detection, govern third-party dependencies, and integrate technology, risk, and business functions.

She added that automation should drive cyber resilience, acting as a catalyst for proactive defense and operational agility—not just efficiency.