New Strategies for New Times: How Banks Can Stay Ahead
According to McKinsey & Company’s Global Banking Annual Review 2025, the banking sector stands at an inflection point. Despite improving valuations and achieving record global profits —$1.2 trillion in 2024— banks’ market valuations, measured by the price-to-book ratio, remain on 67% below the average of all other industries. This gap, the report notes, reflects investors’ doubts about the sustainability of current profits amid margin normalization (as rate hikes no longer provide support), accelerated digital transformation (new competitors and the rise of AI), and shifting consumer behavior. In this new environment, McKinsey concludes that the future of banking will not be defined by scale, but by strategic precision —the ability to combine technology, capital discipline, and deep customer insight.
- From Scale to Precision: Broad-based strategies are no longer sufficient. McKinsey calls for “strategic surgery” across four fronts:
- Technology: adoption of agentic and generative AI;
- Customer: hyperpersonalized and digitally integrated experiences;
- Capital: micro-level balance sheet discipline —product by product, client by client;
- M&A: targeted acquisitions focused on capabilities rather than size.
- The rise of agent-based artificial intelligence: If margins decline and risk costs rise in the coming years, as the report suggests, banks will need to make an extra effort to control expenses. AI will be key, as it will redefine the banking operating model. On average, cost base savings of up to 20% could be achieved, but McKinsey warns that competition will eventually pass much of those benefits on to customers. Early adopters could increase their ROTE by up to four percentage points, while laggards may fall below their cost of capital.
- A More Digital, Less Loyal Consumer: Only 4% of new U.S. credit card applicants choose their current bank without comparing alternatives (down from 10% in 2018). Customer loyalty is giving way to AI-driven, mobile-first hyperpersonalization. “Financial agents” —AI systems optimizing deposits or consolidating debt— could erode up to 9% of global banking profits unless institutions adapt their business models.
- Efficient, Not Excess Capital: Leading banks will distinguish themselves through capital precision —freeing trapped resources and reallocating them to high-return, growth-oriented areas. On M&A, successful deals will prioritize capabilities over scale.
Filter results
According to Ramón Casilda, “it is no longer just a matter of Spanish capital investing in Latin America, but also of Latin American capital using Spain as a European base,” reinforcing a more balanced transatlantic economic space.
According to José Carlos Díez, Professor of Economics at the University of Alcalá, Spanish households have access to some of the cheapest mortgages in Europe, with interest rates below both Euribor and long-term government bond yields.
According to the IEE, Spain's business tax burden exceeds the European Union average, both as a share of total tax revenues and as a percentage of GDP.
AEB, CECA and UNACC propose measures to increase banks' lending capacity by more than €2 trillion in the euro area, including over €250 billion in Spain, providing additional resources to strengthen banks and finance new investment.
According to Boston Consulting Group, regulation brought in after the GFC strengthened the financial sector’s resilience but institutionalized bias towards removing all risk over economic growth.
According to Ramón Casilda, the EU–Mercosur agreement will generate annual tariff savings of around €4 billion, which is significantly higher than the savings expected under the agreements with Canada and Japan.
Economist José Carlos Díez notes that Spain’s banking sector has an excess of deposits and sufficient liquidity to meet the credit demand of companies and households, and does so at the lowest interest rates in Europe, according to the ECB.
According to CEPS, regulatory and supervisory complexity acts as a structural constraint on integration, investment and market depth, with costs that weigh most heavily on smaller institutions, new entrants and cross-border business models.
According to the ECB, an efficient, secure and integrated payment system would strengthen the international role of the euro and deliver benefits such as lower financing costs, reduced exposure to exchange rate fluctuations and greater protection against sanctions.
According to the IEA one key debate in the EU on financial regulation simplification is whether to explicitly include competitiveness, efficiency or contribution to growth as objectives of the regulatory agencies, following the UK example.
According to IE University’s Center for the Governance of Change, deeper and more integrated financial markets would strengthen the euro’s global role. This requires, among other elements, resilient and interoperable payment systems and completing the banking union.
Partnerships between banks and private credit: The winners will be those that combine bank underwriting discipline, distribution, and customer access with private capital’s appetite for long-dated, illiquid risk, according to Oliver Wyman.