FINANCIALINSTITUTIONSTHEFUTUREOFFINANCEFit for Growth.Built for PurposeTo Remain a Force for Good. Banks Must BoldlyIntegrate Al and Earn a Broader MandateMay 2025B sSauath ripathi, odieas ifit, paitSuthakar KinBerz,MateoCopola,Rign Cure, Sreysha eorg, Depak Goyal, ederioM.ut, Siene Remer,BOG
ContentsExecutive SummaryZIntroductionToo GoodtoBe True: Was2024 aTrue Recovery6 Financial Services RevenuesAre Growing. but for WhomiGrowth ofNonbank FinancialInstiutionsIs SettoAccelerateSome Digital Attackers Are at Scale-Are They the FuturelDigitalAssets:RecognitionOverdue?13 TheAfterglow:BankingHasNotYetFullyAdiusted tothePost-GFOSocialContractSecular Decline in Noninterest Income GenerationCost Efficiency Gains Are Slowing. Is Digitization Hitting a Plateau?Spotlight#1: Do Banks Shy Awayfrom PricingforValue?The Big UnlocksArein the BalanceSheet.Notlustinthe PRl Persistent Low Valuations in Maijor Pockets Signal Deep InvestorSkepticism20 Learning from Pockets of OutperformanceWidening Valuation Gaps:Do Winners Tlake ItAllScale Is Winning; But Scale Is About More Than SizeInvestors Love Efficiency, but They Love Fee Income More24 Four Winning Stances, with a Golden Thread of True Digital ExcellenceFront-to-BackDigitization:TheKey to OperatingLeverageSpotlight#2:Offshore Capabity and Innovation HubsCustomerCentricity: From Service to Multiproduct Digital SalesFocused Business Models:Hard Decisions Lead to OutperformanceM&A at Speed: Digitization Makes the Difference33 Al a Game Changer If Implemented Boldly with Focus. May Not Be EnoughThe Promise of Agentic Al and Machine Voice to TransformBankingSetting Up for SuccessfulAgentic Al-Powered Transformation,WillAlBeEnough?40 Renegotiating the Social Contract Between Banks and SocietyEncourageBoldness andExperimentationLevel the Plaving Field for Financial Product DistributionEndorse Banks'Role as Facilitators of Connected CommercEnableSyntheticScaleIntegrate Digital Assets with Traditional Finance Recalibrate the Balance Between Customer Duty and Customer FinancialLiteracy44 Questions for Bank Leadership45 FurtherReading47About the Authors
Executive Summary2024 was a solid year for the global banking industryifviewed in isolation. Nevertheless, that growth can't maskthe deeper structural challenges that the industry facesincluding margin pressures. shitting investor preterencesand Intensitving competitionAs alwavs. performancevaried by region, and some secto>There are four winning stances. Today'sleadersrpically pursue four strategic approaches.digtzation, customer centricity; focuseds, and M&A champions. Bankscan takebut all of themIcanabilities. Athough the strategies,inew, most banks struggle to-but>ifimplemented boldly withough.If Alhas not yet deliverede more to challenges in ; adoption by employees andigital assets appear tobe onpwith the technology.As agenticven greaterproductivitybutfocused approach.Alalonemaynot be suficient.cular decline infee incomehe potential valuve could be capturedthat are curre...
