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 big 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, customers, and greater reach.

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

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

1. Focus 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. Recent Bain analysis finds that 2025 bank acquisitions with substantive scale and scope components worldwide saw roughly 30% better gains in valuation than deals that were primarily only scale or scope.

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. Pick the franchises where 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 attack. In Brazil, a 2025 Bain survey found that consumers score digital banks nearly as high as established banks on 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 with the spread of AI. Many consumers may be comfortable with AI as a recommendation engine, but they are more cautious about paying for transactions through AI because of security and privacy concerns. And in a recent consumer survey by Bain, respondents said they trust 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 get 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 or four months and now uses AI to deliver 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 does operational efficiency. Banks thus will need to change their talent profile, especially where AI, data, and new technologies are concerned. A key decision concerns which activities to address with 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. Now 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, customer identity, risk, and payment. Pursue gain-sharing partnerships and selective M&A. Build formal bank-to-private-credit pipes where 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 from using proprietary data to create experiences and economics that competitors can’t match. In addition, selective data can have great value 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 learning from and collaborating 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 in legacy processes unless they meet certain requirements, collapse governance layers, and realign incentives to 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 with steps such as identifying a handful of franchises to overinvest in, 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?
• Where 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.