Advances in AI, the rise of digital assets, and shifting industry dynamics are rapidly redefining how financial services are delivered. With new entrants gaining bank charters, the long-standing role of traditional banks as the gatekeepers of finance is being challenged, facilitating a unique opportunity to reimagine the customer experience.
The next era of banking will be defined not just by innovation, but also by adaptation, as forward-looking institutions look to balance much-needed transformation with personalisation, trust and security. Making the most of this environment will require banks, fintechs, and regulators alike to work together for lasting progress and a stronger, more inclusive era of banking.
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From AI ambition to bank-ready execution
NVIDIA reports that 65% of financial services organisations are actively using AI, up from 45% last year. The promises of AI are quickly shifting from aspiration to real-life application in banking, as nearly 90% say that AI has helped increase annual revenue.
Notably, AI’s primary role in banking is moving from improving back-office operations to the front lines. Some of the most popular use cases are emerging in customer experience and engagement, alongside trading and portfolio management.
Large banks have already started rolling out major AI initiatives to improve the customer experience. Recently, Citi launched AI-driven platforms to provide its wealth advisors the ability to review market research and portfolio data more quickly, freeing up time to provide clients with faster responses. Similarly, Wells Fargo teamed up with Google to deploy AI agents that assist employees in common back-office tasks, so they can spend more time on high-value client interactions.
But winning with AI is not as straightforward as deploying new technology. For AI systems to be effective, they depend on access to high-quality data pipelines. With multiple legacy systems in place, data housed across business units, and adherence to strict data privacy requirements, data is highly fragmented in the banking industry.
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By GlobalDataCompounding this, many incumbent banks remain constrained by legacy core systems that rely on batch processing and limit real-time data access – this outdated data architecture makes it difficult to fully unlock the value of AI and modern APIs.
Encouragingly, fintech partnerships are increasingly acting as catalysts for change, helping banks modernise core systems and rearchitect data layers so that AI can be applied effectively. And while most banks are partnering to accelerate AI adoption, long-term success will favour institutions that also invest internally, building robust analytics teams, data science capabilities, and governance structures that support AI at scale.
As stablecoins go mainstream, trust becomes the differentiator
Stablecoins are steadily moving toward normalisation, and international regulators are expected to bring clearer guidance around AML, KYC, accounting, and tax treatment throughout the year. As more clarity emerges, legacy infrastructure providers must prepare to support stablecoin transactions.
For banks, stablecoins represent both an opportunity and a significant new responsibility. As the primary customer-facing institutions for money movement, banks are uniquely positioned to build trust in the usage of stablecoins. Much like the early days of web and mobile banking, some institutions will move quickly and lead, while others risk falling behind by adopting only partial capabilities.
A similar dynamic is already visible in real-time payments, where many banks can receive instant payments but have yet to fully enable outbound functionality. Stablecoins may follow a comparable path, reinforcing the need for thoughtful, end-to-end adoption strategies.
Preparing for crypto’s mainstream moves
With providers like Circle, Ripple, and Paxos pursuing U.S. bank charters, a deeper convergence is emerging between traditional banking and digital assets, putting pressure on banks to evolve while maintaining security and compliance. Large institutions are already moving in this direction. For example, JPMorgan Chase is exploring enabling crypto trading for institutional clients in addition to its existing blockchain initiatives.
Most banks, however, are expected to start with low-risk, back-office use cases for crypto such as settlement, reconciliation, and treasury operations before expanding to customer-facing offerings.
At the same time, financial crime risks are growing more complex, as organised fraud rings turn to digital assets to move illicit funds. Addressing these threats will require closer collaboration between banks and fintechs, combining advanced technology with shared intelligence.
Winning in an era of heightened competition
As US household debt hit $18.8 trillion in the fourth quarter of 2025, cash-strapped consumers are becoming increasingly savvy about where they put their money. Rising costs, greater transparency, and AI-powered tools are making it easier than ever to compare rates, products, and providers, acting as personal finance recommendation engines. As new players enter the market, competition for deposits will intensify, making differentiation essential for banks to win.
Banks will need to stand out through innovative and unique product offerings, smarter pricing, and more personalised experiences, like spending insights, savings tools, customised rates, or rewards aligned with individual spending habits.
Fintech servicing models are also on the rise, as banks expand their role as infrastructure and service providers to fintechs supporting payments, operations, and compliance. This evolution not only creates new revenue streams for banks but raises the competitive bar across the industry – pushing institutions to modernise capabilities while opening new paths to growth.
Collectively, these internal and external forces are propelling banks to move more decisively than ever on innovation, from AI adoption to stablecoin strategy and new product development. The next few years will usher in a wave of experimentation, launches, and partnerships as institutions reposition themselves for what’s ahead. Those who succeed will be those willing to adapt, collaborate, and invest with intention.
Sanjib Kalita, Founder and CEO, Guppy & Chairman, Fintech Meetup
