Banking's enduring challenge

Banking’s enduring challenge – and why, if left untouched, AI will fail at your bank

AI investment across the financial services sector is accelerating at pace. Sector-wide spending is forecast to reach $97 billion by 2027¹. JPMorgan alone has committed $2 billion to AI in 2026, with CEO Jamie Dimon describing the early savings as “the tip of the iceberg.” The opportunity is great and the competitive pressure to move beyond broad experimentation to realised ROI is on. We are, without doubt, in a pivotal moment.

But it is not the first time banks have faced a moment demanding reinvention. The Global Financial Crisis forced a reckoning with legitimacy. The regulatory wave that followed rebuilt governance and operating architecture. The rise of fintech and digital challengers demanded a reinvention of delivery. COVID transformed operations almost overnight. Banks adapted in each case yet the capability layer - how broadly leaders understand the institution; how well they can operate across functions - remained largely untouched.

AI is different. It forces the question no prior wave of disruption did: do your leaders understand how this bank creates value, well enough to reimagine it? That's what makes it a reinvention of people rather than a reinvention of process, product, or structure.

Yet our research from working with banking clients for over two decades suggests the answer to this question is typically ‘no’. An analysis of our banking engagements over the years highlights the same challenges across institutions and time: strategy that is clear at the top but fails to reach the front line; silos that reward the part at the expense of the whole; and a ‘culture’ that inhibits execution. In our view, it is a lack of enterprise mindset that is at the core of these challenges, and underlying this, a lack of understanding of how the bank creates value.

This, we contend, is banking's enduring challenge and why, if left untouched, AI will fail in your bank - not because the technology let you down, but because the leadership capability to unlock it was never built.

‍