As the industry reflects on a year of frantic scaling and looks ahead to the next phase of artificial intelligence, the era of “bigger is better” may be coming to a close. Gaby Diamant, Founder and CEO of Bridgewise, explores why 2026 will be the year of vertical specialization, regulatory trust, and a reality check for AGI.
If 2024 was the year of the AI explosion, 2025 was the year the dust began to settle, revealing a landscape that looks vastly different from the initial hype. For the fintech industry, the past 12 months have served as a crucial reality check, shifting the focus from raw power to refined utility.
As we approach 2026, the conversation is moving away from general-purpose giants and toward specialised, vertical-native solutions that can navigate the complex, high-stakes environments of finance and regulation.
Lessons Learned from 2025
The Ceiling of Scale
Perhaps the most significant lesson of 2025 was a simple but uncomfortable truth: more compute no longer guarantees better outcomes. For years, the prevailing logic was that piling on GPUs would automatically move the needle, delivering sweeping leaps in capability. However, 2025 reminded the industry that we have entered a phase of diminishing returns.
Each new generation of models is now delivering only incremental improvements rather than the exponential jumps of the past. It has become clear that achieving meaningful gains takes far more than sheer scale. As compute becomes more expensive and the payoff from raw size fades, the “brute force” approach is losing its lustre.
Depth Wins Over Breadth
In a saturated AI market, we also saw that real value comes from narrowing focus. The past year demonstrated that relying on a single “super-model” to solve everything is not a winning strategy. Instead, depth is winning over breadth.
Real progress is now driven by using the right AI for the right job, particularly in regulated, high-stakes sectors like finance or healthcare. Companies that chose to go deep into domain knowledge, mastering specific verticals instead of jumping on every new general-purpose use case, are the ones moving ahead.
Regulatory Clarity is a Competitive Asset
Another clear takeaway from 2025 was that regulatory compliance, explainability, and trust are becoming strategic advantages just as critical as raw AI power.
In the early days of the AI boom, compliance was often treated as an afterthought—a hurdle to clear after deployment. However, 2025 showed that teams who integrated compliance and model explainability from the outset moved faster and earned significantly more credibility. In an industry built on trust, the ability to explain why an AI made a decision is just as important as the decision itself.
Key Trends Expected for 2026
AGI Hype Meets Reality
Looking ahead, there is a lot of chatter about where Artificial General Intelligence (AGI) will be in 2026. However, a realistic view suggests we should temper our expectations regarding “over-deliveries.”
Without a fundamental hardware shift, most AGI announcements in the coming year will likely outpace what is technically achievable. While excitement will remain high, it is important for the industry to stay realistic about what AGI’s real-world transformation might look like in the short term. We are likely to see a plateau in “magic” moments and a pivot toward practical integration.
A Tighter Race at the Frontier
Competition among the top model developers, such as OpenAI and Google, is set to warm up significantly. With leading players in a close battle for the top spot, Google’s recent progress with Gemini is translating into impressive gains, challenging the perceived dominance of early movers.
Rather than a single dominant force rising to the surface, 2026 is expected to pave the way for a more balanced landscape across competitors. This equilibrium will likely benefit the enterprise market, offering more choice and preventing vendor lock-in.
The Surge of Vertical-First AI
Perhaps the most important trend for the fintech sector is the divergence of model utility. General-purpose models will increasingly struggle in heavily regulated domains where precision is non-negotiable. This creates fertile ground for specialist, vertical-native companies—from wealthtech to legaltech to healthtech—to capture real enterprise value.
As global scrutiny of AI intensifies, trust and compliance will become absolutely paramount to any emerging model’s success. Oversight in finance, law, and other sensitive sectors is stringent; if an AI model cannot justify its decisions or meet regulatory standards, its hopes for market share will be dashed.
In 2026, the winners will not be the models that know a little bit about everything, but the ones that know everything about the things that matter most.