As 2026 gets underway, we take a look at recent trends in the financial services industry. This month, we highlight initial public offering activity, cyber insurance growth and updates on the “buy now, pay later” space.
Initial public offering market picks up
Global IPO markets picked up momentum in 2025, shifting a once muted environment into a regionally uneven recovery story and renewing confidence. Activity has been strongest in the United States and Asia while Europe continues to lag, with investors globally remaining highly selective, leaning toward companies with sustainable, long-term profit and growth potential.
Global IPO proceeds grew by roughly 40% in 2025 from 2024, according to PitchBook data, although the IPO count remained relatively flat. Industrials and technology were the leading sectors for global IPO proceeds last year, with a particular premium placed on companies aligned with artificial intelligence and digital infrastructure.
While 2025 brought greater stability for the IPO market, volatility will likely remain a factor, driven by high valuation concerns, changing fiscal policy and geopolitical conflicts.
Cyber insurance adoption grows
Cyber insurance is experiencing a period of growth as boards and executive teams confront the reality that cyber threats now pose one of the most material risks to business continuity.
Modern cyber threats are particularly dangerous because they exploit shared technologies and interconnected supply chains, meaning cyber incidents commonly trigger simultaneous impacts across multiple organizations.
According to findings in the RSM US Middle Market Business Index Special Report: Cybersecurity 2025, nearly one in five (18%) middle market companies experienced a data breach in 2024, falling from a record-high 28% the year prior. The decline in reported breaches is certainly positive, but the 2025 figures are consistent with data from previous years outside of the spike in 2024. In addition, with methods becoming more sophisticated, some attacks may go undetected, highlighting the importance of continuously strengthening controls.
The use of cyber insurance is also trending up in the middle market, according to that RSM report. In fact, 82% of survey respondents in 2025 indicated that they carry a cyber insurance policy, up from 76% in 2024 and marking the highest percentage in the history of the report.
Despite rising awareness about cybersecurity risks, the cyber insurance market remains small and often difficult to access. Many organizations are still unsure what coverage they need, worry about exclusions, or assume that internal IT controls provide sufficient protection. This contributes to underinsurance and incomplete risk strategies.
Future cyber insurance expansion will depend on accessing underserved sectors and geographies and offering more tailored, accessible solutions.
The industry faces a challenge in extending protection beyond large enterprises. Historically, cyber insurance penetration has been patchy, even among large corporations with the resources to access expertise and navigate complex insurance solutions. Small and medium enterprises struggle to engage with the market effectively, leaving a protection gap precisely where education and support are most likely needed.
Brokers are increasingly central to translating technical cyber risk into accessible solutions for clients. The expansion of managing general agents and digital distribution tools is enabling faster underwriting, richer data capture and more tailored solutions, strengthening the role of intermediaries in shaping market growth.
BNPL: Growth and regulation
“Buy now, pay later” (BNPL) financing plans have rapidly evolved from a niche payment option to a mainstream financial tool reshaping consumer behavior and retail strategy. BNPL is increasingly part of the broader trend of embedded finance, with partnerships between fintechs, retailers and platforms driving innovation.
According to the Worldpay Global Payments Report 2025, BNPL has become a major global payment method, growing from just over $2 billion in 2014 to $342 billion in 2024—a 65% compound annual growth rate that now represents 5% of global e‑commerce—as consumers increasingly seek predictable, lower‑cost installment options.
This growth is driven by a combination of consumer demand, technological integration and shifting economic conditions. Its convenience and typically interest-free structure resonate strongly with digital-first shoppers, particularly Millennials and Gen Z, who are emerging as the most enthusiastic adopters.
While BNPL offers convenience and flexibility, it also carries risks for the consumer. Late payment fees, misunderstanding of terms and over-reliance on borrowing for essentials can lead to financial strain.
In the U.S., the Consumer Financial Protection Bureau (CFPB) has continued to emphasize structural risks previously identified in its 2022 BNPL work, such as inconsistent disclosures, dispute resolution gaps, data harvesting concerns, and the potential for “phantom” debt that is not fully visible in credit reporting.
Simultaneously, the CFPB’s public posture is currently more about monitoring and reporting on BNPL trends than about aggressively extending credit card rules to BNPL, a shift welcomed by industry players but criticized by consumer advocates who argue that rapid BNPL expansion without stronger protections could overextend vulnerable borrowers.
BNPL has developed differently across regions and regulatory frameworks, creating challenges for cross-border comparisons and oversight. In the UK, regulatory scrutiny is intensifying as the government brings BNPL agreements under the Financial Services and Markets Act 2000, requiring providers to be authorized by the Financial Conduct Authority. New rules mandate affordability checks, clearer terms, and adherence to FCA Consumer Duty standards.
Consumers will benefit from stronger protections, including rights under Section 75 of the Consumer Credit Act and access to the Financial Ombudsman Service. These changes aim to ensure that BNPL lending is used responsibly and that consumers understand the risks and obligations involved. Following a consultation paper setting out these proposed approaches to the regulation of the sector, a policy statement and final rules are expected in the first quarter of 2026.
