Global banks delivered another record year in 2025: net profit rose to $1.3 trillion, a 7 percent increase year‑on‑year. Total revenues reached $6.4 trillion, and managed assets (deposits, loans and assets under management) expanded by 6.5 percent to $406 trillion. Despite these headline figures, McKinsey’s updated preview of its 2025 banking report warns the industry faces a structural inflection point.
What marks the turning point?
McKinsey highlights three converging forces that could fundamentally reshape bank business models and customer relationships: the rapid rise of fintechs and neobanks, the spread of agent‑based and generative artificial intelligence, and the emergence of stablecoins.
Examples and quantitative signals:
- Strength of fintechs and neobanks: the world’s 1,000 largest fintech companies generated $625 billion of revenue in 2025, and their share of combined revenues with the largest 1,000 banks rose from 10 percent in 2021 to 17 percent in 2025. The top 1,000 fintechs recorded average annual growth of 22 percent, compared with 5 percent for banks in the same period.
- Neobank profitability: Revolut serves 69 million customers and achieves around a 35 percent ROE; Nubank serves 131 million customers with roughly 30 percent ROE; WeBank has 420 million customers. McKinsey also lists Wise among players achieving about a 35 percent ROE.
- Weakening banking metrics: intangible‑adjusted return on tangible equity (ROTE) fell from 12.4 percent to 11.8 percent. The sector’s P/B and P/E ratios remain among the lowest across industries.
Shifts in revenue mix
Global wealth overseen by financial intermediaries swelled to $468 trillion, but the share of those assets held on bank balance sheets fell from 44 percent in 2022 to 40 percent. At the same time, transactional banking and distribution/sales have grown in importance: today they account for 47 percent of revenues and 57 percent of profits. Those activities are precisely the most exposed to platform economics, new entrants’ scale advantages and price competition.
McKinsey also finds the era of global universal banks is shrinking: in 2005 ten of the world’s 20 largest banks were global universal banks; by 2025 that number had fallen to four. They are being replaced by domestic‑focused, continental or transnational players that build regional networks via digital platforms. The report cites DBS’s pan‑Asian expansion, OTP Bank’s growth across Central and Eastern Europe and Central Asia, and BBVA’s multi‑country operating model as examples.
Technology drivers: agent AI, generative AI and stablecoins
Two technological developments are reshaping competition rapidly:
- Agent‑based AI can monitor account balances in real time, compare available yields, optimize deposit rates, reallocate credit card balances, and steer savings toward higher‑yield instruments. In practice, this can channel some of the interest income banks historically captured directly to customers, weakening banks’ retention power.
- Generative AI has spread extremely quickly: roughly half of the U.S. working‑age population began actively using these tools within about two years. The generational technology gap is unusually narrow, meaning banks cannot rely on an older, slower‑adopting customer base to buy them time for transition.
The stablecoin market is still modest — about $300 billion in volume — but it is becoming a viable alternative for cross‑border payments and trade finance, and could materially alter the composition of bank deposit bases over the medium term.
Customer trust and regulation
McKinsey’s surveys indicate customers, especially younger cohorts, are not only more satisfied with many new market players but in many cases trust them more than traditional banks. Regulatory and market signals reflect this shift: in the United States 21 bank charter applications were filed by fintech firms in 2025, up from just one in the previous year.
McKinsey’s response: a multi‑speed operating model
The firm recommends a “speed with precision” approach — building a three‑speed operating model:
- Base speed: rapid, agile iterations of proven solutions — modernizing core systems, optimizing customer journeys and rolling out AI‑enabled operations. These initiatives typically show high success rates above 90 percent.
- Middle speed: internal incubators and accelerators operating in venture‑style environments to develop embedded finance, marketplace platforms and digital‑asset solutions, with medium success rates.
- Fast/lab speed: laboratory experiments and small‑scale investments testing breakthrough innovations (from autonomous finance to quantum computing). Success rates here are lower, around 20 percent, but a single breakthrough can transform a bank.
Implementing this model requires organizational and cultural change — greater risk appetite, faster failure management and new incentive structures.
Conclusion
McKinsey’s view is that the record 2025 profits ($1.3 trillion net income and $6.4 trillion revenues) do not eliminate deeper structural risks. The ascent of fintechs, neobanks, AI‑driven capabilities and stablecoins represents both a threat and an opportunity: banks that master multi‑speed operating models and move proactively into fintech ecosystems can not only defend existing positions but also open new revenue streams.
