Six Provocations to Future-Proof Your Bank

By Seow-Chien Chew, Senior Partner and Head of APAC Banking Practice, Bain & Company

Today’s banks play crucial roles in the economy but encounter numerous challenges. Banking leaders who proactively address these issues will ensure their institutions are better equipped to thrive in the future, rather than just endure. In this article, we explore six specific steps banks should take to get ahead of the threats they face.

At a glance

• Artificial intelligence (AI), stablecoins, private credit and platforms are redrawing the banking battlefield. If you’re not a clear leader in select products or geographies, you’re exposed everywhere.
• Trust is leaking with every delay, surprise fee or fraud event. Treat trust like capital, with hard metrics and CEO-level ownership.
• If you’re not disrupting yourself, you’re decaying. Innovations must ship in a few weeks, not many months.
• Complexity is a silent competitor, so orchestrate the ecosystem on your terms and cut the bureaucracy that kills execution.

Traditional banks face a conundrum: Many are posting record profits at the moment, but the competitive playing field continues to undergo big shifts and pose bigger threats. While the sector remains vital for financing growth, supporting an energy transition and investing in AI, banks face attacks on several fronts: Agentic AI, stablecoins and alternative payments, real-time money movement and disintermediation via platforms and private credit have changed what it takes for banks to thrive. They’re not just competing with other banks but also with technology companies that have more data, more customers and greater reach.

The traditional full-service, balance-sheet-heavy model is under pressure on all fronts: wealth, payments, credit and capital markets. Partly as a result, traditional banks have slipped from capturing 95 percent of the addressable revenue pool in the early 2000s to about 80 percent today. By 2030, we estimate they could hold only 65 percent (see Figure 1).

We suggest concentrating on six areas that will contribute to future growth and success.

Getting ahead of these threats requires chief executive officers (CEOs) to step back from the daily skirmishes to prepare for the handful of issues that will most affect their competitive positions over the next decade or so. We suggest concentrating on six areas that will contribute to future growth and success.

1. Focus on where you can be indispensable. Balance-sheet size still matters, but disadvantaged scale is worse than no scale at all. Leading bank acquirers are exploring a new frontier in which scale and scope strategies intertwine to form a double helix of efficiency and innovation. Winning combinations blend scale economics with innovation in products, business processes and customer experience, creating institutions that are both cheaper to run and set up for growth. A recent Bain analysis found that 2025 bank acquisitions with substantive scale and scope components worldwide saw roughly 30 percent higher valuation gains than deals that were primarily scale or scope only.

Similarly, durable profit pools accrue to clear leaders—by product, segment or geography—not to sprawling financial supermarkets. Among US retail banks, for instance, there’s a strong correlation between a bank’s metro-area market share and its return on assets (ROA). Pick the franchises you can lead and walk away from the rest.

2. Treat customer trust and loyalty like capital. In an age of choice, every digital delay, opaque fee or broken promise erodes equity among customers faster than any fintech (financial technology) attack. In Brazil, a 2025 Bain survey found that consumers score digital banks nearly as high as established banks for trustworthiness. So it’s vital to measure, protect and repeatedly earn trust. Set up a “trust profit and loss” with transparent pricing, fairness by design, stronger fraud protection and radical simplicity in moments that create anxiety. Earn primacy through advice, anticipation and personalization.

The question of trust will only become more salient as AI spreads. Many consumers may be comfortable with AI as a recommendation engine, but they are more cautious about paying for transactions via AI due to security and privacy concerns. And in a recent consumer survey by Bain, respondents stated they trusted familiar names in payments and retail—think Apple Pay, PayPal and Amazon—far more than banks for agentic commerce.

3. Disrupt yourself before others do. Incumbents aren’t falling behind on innovation because they can’t innovate, but rather because they’ve forgotten how. Great ideas need to move from lab to market in months, not years. Nubank has become the largest neobank in Latin America, serving 131 million customers, in part due to its agility. It has long been able to deliver new features in three to four months and now uses AI to do so in a week or less. Banks should return to a builder’s culture that makes experimentation expected, not exceptional. Ship meaningful customer improvements to a 90-day drumbeat. Celebrate product craft and frontline choreography, with branches and staff that deepen relationships with customers.

Willing disruption requires different skills than those needed for operational efficiency. Banks must thus change their talent profiles, especially in AI, data and new technologies. A key decision concerns which activities to address through hiring, outsourcing or partnering.

4. Orchestrate the ecosystem. Every friendly partner is a future competitor. The firms nibbling at your value chain often run atop the infrastructure you built. The time has come to orchestrate the ecosystem, not serve it. Decide where you’ll collaborate, compete and dominate. Price your pipes to address issues around the application programming interface (API), customer identity, risk and payment. Pursue gain-sharing partnerships and selective mergers and acquisitions (M&A). Build formal bank-to-private-credit pipes through which you can create and capture value.

5. Modernize the business model, not just the stack. Technology modernization may be necessary, but business-model modernization is existential. Reinvention should be business-led, centered on unlocking the value of data. You gain an edge by using proprietary data to create experiences and economics that competitors can’t match. In addition, selective data can be highly valuable to partners. Move beyond incremental upgrades to win on speed and certainty of execution.

Here, agentic AI can accelerate technological change and help banks rethink how they operate. Delivering customer experiences will increasingly rely on a mix of humans, digital systems and AI agents that learn from and collaborate with one another.

6. Simplify the machine to win on speed. Your operating model might be a stealth saboteur. Complexity, slow governance and obsolete incentives kill speed and certainty of execution. Simplification here can propel a transformation. Treat operating-model simplification as a CEO-sponsored initiative with targets for speed, simplicity and execution certainty, not a cost-cutting hygiene project. Stop progress on legacy processes unless they meet certain requirements, collapse governance layers and realign incentives with throughput and quality.

Reinvigorating the enterprise

Responding effectively to these challenges involves a set of moves that will take varying lengths of time to play out. In the short term, banks can make progress by taking steps such as identifying a handful of franchises in which to overinvest, launching a trust dashboard, running a lab-to-market sprint for a couple of customer journeys and rewriting the partner thesis.

In parallel, banks should build initiatives for the longer term. These include shaping the portfolio for leadership; baking transparency, fairness and reliability into products; monetizing owned rails; and reinventing around data and execution speed.

To inform the next steps, pose the following high-gain questions at the next executive team meeting:

• Are we scaling with purpose or just getting bigger?
• Where exactly is our trust leaking, and how will we stop it?
• When was the last time we surprised the market? What ships in the next 90 days?
• How will we orchestrate the ecosystem rather than serve it? What terms will change?
• How is our own bureaucracy killing speed, and what will we remove this quarter?

Banking remains both vital and under attack. Banks that recognize the urgency of dealing with the issues articulated here stand a better chance of thriving, not just surviving, in the years ahead.

Endnote

This article was developed with contributions from Samit Soni, Partner and Head of the Americas Banking Practice; Christy de Gooyer, Practice Vice President, Global Banking; and Roberto Frazzitta, Partner and Global Banking Sector Leader at Bain & Company.

ABOUT THE AUTHOR

Seow-Chien Chew is a Senior Partner and Head of Bain’s Banking practice in Asia-Pacific, serving on the firm’s global Board of Directors. She advises leading banks and non-bank financial institutions on building new business models, leveraging digital, data, and AI strategies to enhance customer outcomes and productivity. Beyond client work, she founded Bain’s SEA Social Impact practice, leads Women@Bain, and is a World Economic Forum Young Global Leader.