knowledge 30 March 2026 |

CBI unveils its Regulatory and Supervisory Outlook for 2026

The Report follows the letter sent by Gabriel Makhlouf, the Governor of the CBI, to the Tánaiste and Minister for Finance, Simon Harris, on 29 January 2026, on the economic outlook and the CBI’s regulatory priorities for 2026. Whilst noting the strength of Ireland’s economy and financial sector, Governor Makhlouf emphasised the importance of focusing on reinforcing economic resilience in light of geopolitical and geoeconomic uncertainty and the rapidly evolving international environment.

The CBI’s Risk Assessment and Key Risk Driver Themes

The Report sets out the CBI’s perspective on the primary drivers of risk to the resilience of the financial sector in view of geopolitical shifts, changing financial and macroeconomic conditions, technological advancements and innovation, climate and environmental-related risks, social and demographic trends and fragmentation in the global legal and regulatory environment. The CBI’s risk assessment and outlook are based on three broad risk driver themes, as follows:

• Risk Theme A: macroeconomic and geopolitical environment
  
  The CBI’s assessment finds that operational risk, which remains elevated, cyber risks, asset valuation and market risks, which have increased, liquidity and leverage risks and credit and counterparty risks are primarily driven by macroeconomic and geopolitical uncertainties.
   
• Risk Theme B: how regulated entities are responding to today’s changing world
  
  The CBI finds that data, artificial intelligence (“AI”) and modelling risks, which are also deemed to have increased, consumer and investor detriment risks, financial crime risks, and risk management practices and risk transfer are primary driven by the way regulated entities navigate the evolving marketplace and rapidly changing world.
   
• Risk Theme C: longer-term structural forces at play
  
  The Report sets out that environmental-related risks and business model and strategic risks are driven by long-horizon structural transitions in the evolving demographic, social and economic environment which require regulated firms’ action now to avoid long-term consequences.

The Report emphasises that a core focus of the CBI’s supervisory approach is on assessing firms’ management of mitigants and amplifiers of risk. The CBI’s risk assessment further notes that inflation and interest rate risks have subsided.

The CBI’s Key Supervisory Priorities for 2026

The CBI’s overarching supervisory priorities for 2026 are based on the CBI’s consumer-centric expectations for firms’ governance frameworks, risk management practices and operational resilience. In view of recent changes to the legal and regulatory landscape, the CBI’s key supervisory priorities are as follows:

• Priority 1: maintaining and building resilience to geopolitical risks and macro-financial uncertainties
  
  The CBI’s supervisory work will focus on the assessment of firms’ operational and cyber resilience, including regulated entities’ implementation of requirements under the Digital Operational Resilience Act (“DORA”), financial resilience and firms’ responses to risks arising from climate change.
   
• Priority 2: securing consumer and investor interests in a rapidly changing world
  
  The CBI aims to focus on regulated firms’ implementation of the revised Consumer Protection Code (“CPC”)¹, how entities support customers in the increasingly digital financial services sector, and firms’ approaches to tackling financial crime, particularly evolving money laundering (“ML”) and terrorist financing (“TF”) risks.
   
• Priority 3: responding to technology-driven transformations
  
  The Report outlines the CBI’s intention to focus its planned activities on the use of AI in the financial services sector, digital money, tokenisation and the authorisation, and ongoing supervision, of crypto asset service providers (“CASPs”) under the Markets in Crypto-Assets Regulation (MiCAR).
   
• Priority 4: helping to address the environmental and societal transitions underway
  
  The CBI intends to continue its engagement with stakeholders and experts to address matters including flood risk, insurance protection gaps, low retail investment participation, sustainable finance policy and the evolving payments landscape over 2026 and 2027.
   
• Priority 5: enhancing regulation and supervision
  
  In view of the CBI’s recent publication of its roadmap for effective and efficient regulation and supervision², the CBI will continue its focus on simplifying and streamlining governance. The CBI intends to update its approach to supervision in 2026 and will continue its supervision of firms’ implementation of the Individual Accountability Framework (“IAF”), including the Senior Executive Accountability Regime (“SEAR”).

CBI’s Sectoral-Specific Supervisory Approach

The Report sets out the CBI’s approach to assessing sector-specific risks and vulnerabilities and details the CBI’s ongoing work plans in relation to supervisory activities pertaining to each sector. The CBI’s regulatory and supervisory priorities for the year ahead seek to achieve the four safeguarding outcomes of ensuring the protection of consumers and investors, the safety and soundness of regulated entities, the integrity of the financial system and financial stability.

Banking and Payments

Banking Sector

Whilst the CBI notes the resilience of the banking sector, many strategic challenges flow from the increasingly innovative, competitive and digital environment, involving the use of new types of money and evolving consumer expectations. The CBI’s sectoral assessment emphasises the importance of credit institutions’ effective board oversight, change management, data, modelling and scenario analysis and business model and strategy. The CBI’s planned activities include an assessment of the implications of the forthcoming introduction of the third-country branch requirement under article 21c of the Capital Requirements Directive VI (“CRD VI”) on banks’ balance sheets.

Payment and E-Money Sector

The Report notes that the payment and e-money sector is rapidly evolving and that the CBI plans to focus on how firms address identified gaps in safeguarding processes and procedures and implementation of the new PCF role of Head of Safeguarding³, firms’ business models, culture, governance and financial resilience. The Report also notes the growing number of firms seeking additional licences, which largely relate to crypto-asset service provision and the issuance of electronic money tokens (EMTs). The CBI will also focus on the risks of financial crime associated with the payment and e-money sector, including ML/TF risks and risks arising from the use of AI.

Retail Credit Sector

The CBI’s supervisory efforts in relation to the retail credit sector will focus on firms’ treatment of customers and firms’ lending practices, in particular the risk of consumer over-indebtedness associated with short-term credit arrangements. The CBI intends to examine firms’ consideration of the impact of the evolving market and risk landscape on their business models, internal control frameworks and their strategic approach to ensuring financial and operational resilience.

Credit Union Sector

In light of the changes to the legal and regulatory framework in the last number of years, and the corresponding development of the credit union sector, the CBI’s supervisory action will address credit unions’ financial structural vulnerabilities and organisational deficiencies. The CBI will focus on how credit unions leverage opportunities and appropriately manage risks relating to increased long-term lending. The CBI notes it plans to engage with the credit union sector regarding preparation for DORA, applying to the sector from 2028.

Insurance & Reinsurance

Insurance and Reinsurance Sectors

Whilst the CBI notes the robust solvency of the insurance and reinsurance sector, planned supervisory activities relate to the preservation of consumers’ trust in insurance products, fair pricing, effective model risk management and operational resilience. The CBI’s sectoral supervision will concentrate on firms’ implementation of forthcoming legislative changes including the revised CPC, changes to the Solvency II regime and the Insurance Recovery and Resolution Directive.

The CBI’s supervisory focus will also pertain to digitalisation of the insurance and reinsurance sector, firms’ use of and strategy for AI and the greater inclusion of climate-related risk in firms’ business model, strategy and underwriting practices.

Markets & Funds

Funds Sector

The CBI’s ongoing monitoring and oversight of the funds sector will focus on safeguarding customers’ assets, protecting investors and ensuring financial stability. The CBI’s sectoral reviews will examine the governance and resilience of firms, the impact of CRD VI, the combatting of financial crime particularly arising from ML/TF risks, asset valuation governance, firms’ liquidity risk management frameworks, progress on alternative investment fund managers’ leverage reduction, transparency relating to product costs and disclosures, the use of AI across the funds sector and firms’ compliance with environmental, social and governance (ESG) standards.

Markets Sector

The Report notes the uncertainty and geopolitical risk facing the securities markets and discusses the encompassing of CASPs within the CBI’s regulatory perimeter. Primary issuance in crypto securities is noted to be increasing. The CBI will focus on matters including consumer protection, custody of crypto-assets, operational resilience, governance in relation to conflicts of interest and AI.

MiFID Investment Firm Sector

The Report notes that operational resilience is a key consideration for supervisors in respect of this sector. The CBI intends to focus on governance and risk management processes, assessment of ML/TF risks, treatment of investors, management of conflicts of interest and AI deployment.

Retail Intermediaries Sector

The CBI’s key regulatory and supervisory priorities in relation to the retail intermediaries sector include ensuring firms’ cultures, strategies and business models are consumer-focused, assessing firms’ preparedness for material operational disruptions, reviewing the provision of unregulated services and products by retail intermediaries, commission arrangements and the impacts of merger and acquisition activity on the market and consumers. 

The CBI’s Three Spotlight Articles and Key Regulatory Initiatives

The Report also includes three spotlight articles emphasising the CBI’s focus on: (i) approaching AI from a supervisory perspective; (ii) supporting resilient service provision; and (iii) supporting better outcomes for consumers and investors. The appendices to the Report include an overview of the key regulatory initiatives which shape the CBI’s 2026 priorities. These include the CBI’s ongoing consultations on the implementation of the Finance (Provision of Access to Cash Infrastructure) Act 2025, the implementation of the Anti-Money Laundering/Countering the Financing of Terrorism legislative package, the measures proposed to simplify the EU AI Act, the forthcoming review of the Corporate Governance Codes in 2026, the planned review of the IAF and the SEAR Regime in 2027 and the progress of the digital euro legislative process.

How McCann FitzGerald LLP Can Help:

McCann FitzGerald LLP is a premier law firm in Ireland with deep expertise in relation to financial services regulation. If you would like to discuss further or require any specific financial services regulatory advice, please contact us.