Banks risk losing $170b if AI adoption lags

But longer term, AI may erode bank profitability as customers turn to AI agents.

Banks’ profit pool may lose out $170b if they do not reposition business models to compete with third-party agents in the field of AI, particularly agentic AI, said McKinsey & Company.

Although banks have enjoyed a record revenue of $5.5t in 2024— pushing the sector’s net income to $1.2t, or the highest total ever for any industry— the favorable conditions buoying these results are fading.

“Banks’ recent performance has been buoyed by favorable conditions—a peak in the global wealth cycle, unusually strong revenue margins boosted by higher interest rates, and low risk costs—but these tailwinds are dissipating,” McKinsey & Company wrote in its Global Banking Review 2025, noting that ROE is barely clearing the cost of capital.

Banks’ tech strategies have not succeeded according to McKinsey. Banks spend about $600b a year on technology but productivity remains low.

The necessity of AI
In an era of falling revenues, banks sorely need productivity gains and could potentially get them from AI, McKinsey said.

But it warned that AI is a double-edged sword that could bring cost savings as well as disruption.

Agentic AI in particular could create unprecedented efficiencies and new customer value. McKinsey estimates that agentic AI could disrupt deposits and credit card lending, cutting through “inertia”.

“Today, $23t of the global total of $70t in consumer deposits sits in checking accounts with near-zero rates, whilst the remainder is parked in accounts that often pay relatively low savings rates,” McKinsey said, citing data from McKinsey Panorama.

Longer term, however, AI is likely to erode bank profitability as consumers start routinely using AI agents to optimize their finances, for example, automatically moving deposits into higher-yield accounts.

The threat from third-party agents could be material, it added.

“If banks don’t reposition their business models to adapt, over the next decade or so, bank profit pools globally could decline by $170b, or 9%. That’s enough to bring average returns below the cost of capital,” McKinsey warned.