In this episode, Bob and Amy unpack insights from McKinsey’s Global Banking Annual Review 2025, which argues that the future of banking success will hinge on precision rather than size. Although 2024 delivered record profits for the industry, banks now confront a widening valuation gap, shaped by investor scepticism, lower interest rates, intensifying competition, and the transformative impact of Agentic AI.
While AI could streamline operations and reduce costs by up to 20%, it also threatens to weaken customer loyalty in key areas such as deposits and credit cards—potentially eroding global profit pools by as much as $170 billion if banks fail to adapt.
To remain competitive, McKinsey advises banks to adopt a “precision toolbox” built around four pillars: cutting-edge technology (especially AI), hyper-personalised customer engagement, enhanced capital efficiency, and targeted mergers and acquisitions. The message is clear—banks that master precision will lead the next era of profitability, while slower movers risk slipping into decline.
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