CIB units confront new rivals as specialised firms gain scale

Independent investment banks and private credit firms are moving into their space.

Corporate and investment banking (CIB) units will contend with increased competition from “specialized attacker firms”, alongside geopolitical and technological risks, according to McKinsey & Co.

“Specialized attacker firms” in particular are increasing in scale, challenging traditional CIBs with their more universal-models, McKinsey said in a December 2025 report.

Four types of attacker firms are a threat to CIB. The first are independent investment banks that focus primarily on M&A, equity capital markets, debt capital markets advisory, private capital advisory, amongst others. Once boutiques, the largest of these firms now command market capitalisations exceeding $10b, McKinsey said.

Non-bank market makers offer a viable alternative to traditional sell-side investment banks in several products including cash equities, foreign exchange (FX), futures, exchange-traded funds (ETFs), amongst     others. The largest of these firms can generate revenues of about $10b to $20b annually, McKinsey research said.

Private credit firms are next, with private credit having grown into a $2t global asset class in 2023. Private credit currently finances 80% of middle market sponsored deals, substantially disintermediating banks, McKinsey said.

Finally, there are the FX and payment specialists. They compete with CIB units on competitive pricing, convenience and ease of use, and speed.

To compete, CIB units should look into achieving the lowest possible cost-to-income ratio, which would give them a financial cushion to weather substantial revenue declines.

Firms can adopt a radical simplification strategy, as McKinsey calls it, inspired by a private equity-style management transformation. This can drive savings of 20% or more in the near-term.

“This includes, first, a governance structure with strong top-down sponsorship, dedicated leaders, and ambitious targets; second, an initial diligence and bottom-up planning phase that quickly creates a bankable plan of initiatives that are calibrated, sequenced, and consistent; third, a weekly delivery cadence supported by a single source of truth for tracking and finance processes that easily reconcile the impact of the program into overall financials; fourth, investment in a winning culture to drive and sustain change; and fifth, a one-bank approach that cuts across businesses and silos,” McKinsey wrote in its report.

CIBs should also focus on the “one-bank opportunity.”

“The biggest wins lie at the intersection of business lines, namely between transaction banking and lending, enterprise-wide FX, and synergies between commercial and wealth,” McKinsey wrote.

Capturing the bankwide FX opportunity is another high-leverage play. This centers on ensuring that FX trading capabilities are embedded wherever a bank client makes a cross-border payment.

To make the one-bank strategy real, CIB organizations need dedicated cross-unit teams or initiatives, integrated client journeys, and incentive plans that reward collaboration, McKinsey said.