According to McKinsey’s Global Banking Annual Review 2026, AI is emerging as the most disruptive force the industry has faced in generations, threatening traditional customer relationships, accelerating competition and forcing banks to rethink how they operate.
Unlike previous technological shifts such as online banking or mobile apps, AI adoption in the industry has become the fastest in history, with young and old people piling in at nearly the same rate. Therefore, the challenge is no longer whether banks should embrace AI – it is whether they can move fast enough to remain relevant.
Banks are losing the luxury of gradual transformation
Historically, banks have been slow adopters of transformative technologies. While industries such as retail and telecommunications rapidly reinvented themselves during the internet and smartphone revolutions, banks largely added digital channels alongside existing operations.
That strategy worked because their most valuable customers tended to be older and slower to adopt new technologies. Therefore, banking institutions were able to modernize gradually without risking their core revenue base.
But AI is different. McKinsey notes that generative AI has become one of the fastest-adopted technologies in history. Nearly half of the U.S. working-age population adopted generative AI within just two years, compared with roughly 15 years for digital banking to reach similar penetration levels.
“The technology is maturing and evolving rapidly. Every three to six months, a new version comes out, and it’s smarter and more intelligent than the one before it,” said Ido Segev, McKinsey Senior Partner.
More importantly, adoption is occurring across age groups, eliminating the demographic buffer that banks relied on during previous technology shifts.
As customers increasingly trust AI tools to handle financial decisions, banks are losing the luxury of gradual transformation.
Agentic AI and stablecoins in focus
The next phase of disruption in the banking sector is being driven by agentic AI – systems capable of taking actions on behalf of users rather than simply providing information.
Instead of manually comparing savings accounts, credit cards, mortgages, or investment products, consumers can increasingly rely on AI agents to perform those tasks automatically. These systems can monitor balances, identify better rates, move funds between accounts, optimize loyalty rewards, refinance debt and recommend financial products in real time.
This represents a fundamental shift in power. For years, banks benefited from customer inertia. Most consumers maintained deposits, loans and investments with a single institution because switching required effort. Agentic AI removes that friction.
“Customers are increasingly getting comfortable with agents acting on their behalf. But it doesn’t fully replace all other channels. From a bank adoption standpoint, we reached a point where people believe there will be 20 to 30 agents per bank employee,” added Segev.
Another technology, stablecoins, poses a similar threat to customer relationship. Stablecoins are solidly in the hype cycle, with forecasts of $4 trillion in adoption by 2030 and high-profile unicorn valuations for independent issuers.
Global stablecoin circulation remains modest at roughly $300 billion. In 2025, this base supported only about $400 billion of real payment activity. While this represents meaningful progress, it is negligible relative to the volumes that define global money movement.
Nevertheless, momentum is shifting to stablecoins. They can make it cheaper and faster to send money across borders, which is particularly valuable for uses such as trade finance or remittances involving jurisdictions with less developed payments systems. As more bank customers adopt stablecoins for these kinds of payments, banks’ deposits will start to change, including the mix of deposit types and depositors. Fiat deposits could also shift into stablecoin reserves. As the use of stablecoins grows, businesses may not need to hold cash buffers for cross-border payments or operations.
Fintechs and neobanks are rewriting the rules
AI is also accelerating a shift that was already underway: the rise of fintechs and digital-native banks as serious competitors to traditional financial institutions.
For years, incumbent banks and fintechs coexisted in an uneasy balance. Many fintech startups failed, while others were acquired by established institutions. Banks also invested heavily in digital capabilities, incorporating many of the innovations pioneered by fintech challengers. The long-predicted takeover of banking by fintechs never materialized. Even in 2025, fintech revenues stood at approximately $650 billion, only a fraction of the banking industry’s $7.3 trillion revenue pool.
Yet beneath those headline figures, the competitive landscape is changing rapidly. The fintech sector is maturing, attracting fresh investment and producing a growing number of profitable businesses operating at scale.
The numbers illustrate the shift. Between 2021 and 2025, revenues among the world’s largest fintechs grew by 22 percent, compared with just 5 percent for traditional banks. Fintechs now account for 17 percent of the combined revenues generated by the world’s largest banks and fintech firms, up from 10 percent four years earlier. Investors have also taken notice, valuing the top fintechs at roughly 37 percent of the market capitalization of the leading banking institutions despite their much smaller revenue base.
Many fintechs are also becoming more bank-like. Rather than avoiding regulation, a growing number are pursuing banking licenses to broaden their product offerings, lower funding costs and strengthen resilience. This marks a significant evolution from the industry’s early years, when disruption often meant operating outside traditional banking structures.
At the same time, a new generation of neobanks is proving that digital-first institutions can achieve both scale and profitability.
Nubank, now Latin America’s most valuable bank, serves more than 130 million customers and generates returns on equity of around 30 percent. Revolut has also expanded to roughly 69 million retail and business customers and delivers returns exceeding many incumbent banks.
Egypt-based Fawry provides e-payments and digital finance solutions to over 53.1 million customers. Meanwhile, China’s WeBank serves hundreds of millions of users, while other digital challengers continue to expand across key markets.
What distinguishes these firms is not only technology but operating efficiency. Built on modern digital infrastructure, they can acquire and serve customers at significantly lower cost than traditional banks burdened by legacy systems and large physical networks. They are also evolving beyond niche offerings. Nubank, which began as a credit-card provider, now offers a broad range of banking services, while Revolut has expanded from foreign-exchange and payments products into lending, investing, wealth management and business banking.
“To accelerate adoption, the question is, what can the bank do to provide more value than the customers would get otherwise? Trust is going to be driven first by attackers, like challengers or fintechs, who will provide those solutions and add value at the same time with banks, and maybe even before,” said Segev.
Hyper personalization is becoming the new competitive advantage
As AI empowers consumers, it also offers banks an opportunity to strengthen relationships through hyper personalization. Traditional customer segmentation grouped individuals into broad categories based on age, income, or geography. AI enables something far more sophisticated: real-time understanding of customer behavior and preferences.
Banks can now analyze transaction patterns, spending habits, investment goals and life events to deliver tailored recommendations at scale. Rather than marketing products through periodic campaigns, institutions can engage customers with personalized offers precisely when they are most relevant.
McKinsey notes that leading banks are already using AI-driven customer value management systems to increase engagement significantly while boosting customer value by double-digit percentages.
The future bank may not simply respond to customer needs but anticipate them before customers recognize them themselves.
From products to platforms
AI is also accelerating a broader transformation in banking strategy. Historically, banks generated value by owning customer accounts, distributing financial products and managing balance sheets. In the future, success may depend on becoming intelligent financial platforms.
The battle for primacy and acceleration from AI won’t allow banks to go slow. The solution for banks is to find the future business model that ensures truly differentiated customer ownership, including hyper personalized distribution and a distinctive beyond-banking value proposition, and maintain operating leverage with close to zero additional cost of acquisition and serving. To get there, banks will need to transform into a network of platforms to achieve resilience, precision and speed.
This shift could fundamentally alter how banks generate revenue. As competition compresses margins and customer switching becomes easier, institutions will need to create value through advisory capabilities, ecosystem participation and personalized experiences rather than relying solely on traditional lending and deposit spreads.
The future belongs to fast movers
The global banking industry remains highly profitable. McKinsey estimates that net income reached $1.3 trillion in 2025, marking another record year. Yet beneath these strong financial results lies a growing sense of urgency.
AI is not simply another technological upgrade. It is changing how customers interact with financial institutions, how products are distributed and how value is created across the industry.
For decades, banks could afford to be followers rather than pioneers, and the AI era may eliminate that option.
The institutions that thrive will be those capable of combining trust, regulatory discipline and risk management with the speed, experimentation and customer-centricity that AI demands. Those that fail to adapt risk becoming utilities operating behind the scenes while AI-powered platforms and fintechs own the customer relationship.
“The winners are the ones that will adopt this technology faster, overcome the scale issues, start seeing impact on their bottom line and use that impact and extra profitability to reinvest in growth, ultimately capturing share from the laggards,” Segev concluded.
Banking’s future will not be defined by who has the largest branch network or balance sheet. Increasingly, it will be defined by who can harness artificial intelligence to deliver faster, smarter and more personalized financial experiences.
Done well, banks will be able to layer agility onto their traditional stability and achieve the required pace to stay relevant amid technology shifts and the war for customer primacy.
