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FinTech and finance
Report

Fintech & Finance — Building the Next Generation of Financial Services

Contents

The State of the market

Record profits, eroding trust

The financial sector is generating record profits: $1.2 trillion in 2024, with a return on equity of 10.3%. One might see this as a sector at the top of its game. Yet only 15% of banks are valued by markets as companies capable of creating sustainable value, compared to 67% in other sectors. This fragility also shows up in customer relationships. In the United States, loyalty tied to checking accounts has collapsed — a signal that extends well beyond the American market.

A transformation claimed, but not deep enough

For ten years, financial institutions have been investing heavily in their digital transformation. AI strategies and chatbots are multiplying, but investors expect a precise strategy backed by measurable results.

Customers want seamless journeys across channels, fast responses, and services that can genuinely solve their problems. When these expectations are not met, they turn to fintechs, wallets, and alternative payment networks.

Artificial intelligence amplifies the consequences of these choices. Well deployed, it can reduce costs by 15 to 20%. Integrated into fragmented infrastructure, it can instead erode profit sources by up to 9%.

The threat is concrete: $5 billion in international payment fees could be captured by alternative payment networks by 2028. 

Fintechs and services like Apple Pay and Google Pay are progressively taking share of these flows through more targeted offerings and infrastructures that are both more modern and more flexible.

Three structural barriers still limit the transformation of financial players: multiplying transformation promises without demonstrating their impact; relying on fragmented experiences that make poor use of AI, increase churn risk, and favor disintermediation; and sticking to rigid, complex, and poorly documented technology architectures that compromise the large-scale deployment of new payment methods and agentic AI.

At AREA 17, we approach these challenges as a unified system across three levels: the brand and its positioning in the industry, the user experience across channels, and the technological and organizational foundations that make it possible.

Moving from transformation promises to proof of impact

The financial sector's discourse favors big promises — "digital-first," "AI-powered," "the platform of tomorrow" — at the expense of real impact, clarity, and concrete usefulness. Yet the relationship with the primary bank remains a decisive advantage: it is three to four times more likely to be chosen when a customer is looking for an additional product. But in the United States, loyalty tied to checking accounts has dropped from 25% to 4% in seven years. 

Promises are therefore no longer enough to retain customers, who are migrating toward players whose services genuinely live up to their messaging.

Markets and regulators are converging on the same requirement. Markets reward precision: clear valuation targets, measurable cost savings, and a defined role in financial ecosystems. Frameworks such as DORA, the EU AI Act, and PSD3, for their part, make governance, transparency, and control explicit criteria for trust — no longer merely regulatory obligations.

Trust is not built on promises, but on evidence: demonstrated performance, clear and demonstrable governance, and AI whose decisions are understood and controlled. It is no longer an abstract benefit, but a direct condition of the commercial relationship.

Key takeaway

The most advanced financial institutions are replacing generic narratives about their digital transformation with measurable results: cost reduction, improved customer loyalty, and a clear positioning in the Open Finance ecosystem. They are also making compliance, transparency, and AI control factors of differentiation, not simply regulatory obligations.

Connecting the branch, apps, and AI

Adoption of mobile banking services jumped from 41% in 2020 to 63% in 2024, and 72% of customers want access to all banking services from their mobile device. Yet 72% of checking account openings still take place in a branch. 

Customers are not choosing between physical and digital: they expect continuous journeys in which information and context follow them from one channel to the next. A continuity that most banks are not yet able to offer.

The current integration of AI also explains its low adoption in banking services. While 51% of consumers already use GenAI in their daily lives, only 23% use it for their banking operations. Most implementations remain limited to chatbots that function as enhanced FAQs, rather than tools capable of solving a problem end to end. As a result, only 29% of users report being satisfied. 

The gap between AI capabilities and the services on offer feeds frustration and leads customers to turn to other players, at the precise moment when the market is undergoing a major transformation.

Currently, 56% of Americans already use wallets, and 57% of companies in the sector expect that payments initiated or executed by AI agents will become common within the next three years. 

This shift does not only change how a payment is made: it introduces a new form of delegation. 

Users will need to be able to define what an agent is authorized to do, track its actions, and interrupt them. The adoption of these services will therefore depend on their simplicity, but also on clear rules, full traceability, and rigorous fraud risk control.

Key takeaway

Redesigning the most critical journeys — such as account opening, dispute management, or international payments — requires deploying AI agents capable of executing actions, not just answering questions. It also means designing these journeys now for an environment where wallets, autonomous agents, and automated workflows are becoming the norm.

Modernizing foundations to deploy innovation at scale

75% of banking IT budgets are absorbed by maintaining existing systems. This dependence on legacy does not only weigh on operational efficiency: it directly limits the large-scale deployment of new services. 

Digital currencies, instant transactions, and agentic AI require infrastructures capable of processing data continuously, orchestrating modular services, and integrating new partners quickly. Yet many banks do not yet have these foundations.

While 79% of banks are experimenting with payments made by AI agents and 41% offer services related to crypto assets, most of these initiatives remain confined to pilots or peripheral offerings. 

The challenge is therefore no longer to multiply experiments, but to be able to industrialize them and integrate them at the core of operations.

At the same time, potential revenues are accumulating and slipping away from players that are slow to modernize. Open banking could generate $330 billion in additional revenues by 2032. 

To capture a share of this, institutions must equip themselves with systems capable of making certain data and services accessible to external partners via secure and standardized interfaces, while controlling access and usage.

AI can also accelerate the modernization of legacy systems — including COBOL applications — by mapping dependencies, documenting processes, and identifying at-risk components. It helps prioritize work, prepare migrations, and automate part of the testing, without replacing human expertise for architecture decisions and validation.

Key takeaway

Institutions building lasting advantage are progressively evolving their architecture around modular, interoperable, cloud-ready platforms. They use AI to accelerate this transition and deploy end-to-end use cases, with supervision and governance mechanisms built in from the start.

Conclusion

Transformation promises are no longer enough. The institutions that will define the next cycle will be those that can demonstrate their impact, offer experiences that live up to their messaging, and modernize their foundations to deploy innovation at scale. The others risk seeing their customers, their flows, and their margins captured by players that are more precise in their positioning, more consistent in their experiences, and faster in their execution.

At AREA 17, we combine strategy, design, and technology to help financial institutions and fintechs create lasting value by acting on these three levers:

Moving from transformation promises to proof of impact — by replacing generic narratives with measurable results, making compliance, transparency, and AI control factors of differentiation, and defining a clear role in the open finance ecosystem.

Connecting the branch, apps, and AI — by ensuring journey continuity across channels, replacing ineffective chatbots with agents that act, and designing for a world where wallets and agentic payments are already the norm.

Modernizing foundations to deploy innovation at scale — by evolving architectures toward modular and interoperable platforms, using AI to accelerate this transformation, and integrating supervision and governance of new services from the outset.

Facing these challenges? We would love to talk.

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