FinTech and finance

Financial services organizations that turn transformation theater into proven value will close the valuation gap, rebuild trust, and defend against disintermediation.

Challenges and opportunities arise at three levels:

Brand: Financial services now compete on proven outcomes and trust, not scale or generic digital claims. Make AI and compliance visible differentiators, rebuild loyalty through ecosystem orchestration, and show measurable progress instead of relying on transformation theater.

Experience: Customers expect seamless, personalized journeys across every channel. Leaders will orchestrate branch, mobile, and AI into unified experiences, replace weak chatbots with automation that actually completes tasks, and build for a world where wallets, agents, and autonomous workflows are already the norm.

Technology: Legacy systems increase costs, frustrate customers, and accelerate disintermediation. Replace them with cloud-native, open-source cores that enable orchestrated journeys, personalization, and strong governance—where AI accelerates modernization, delivers cost savings, and secures end-to-end digital currency flows.

After a decade of digital transformation, financial services are now facing a value paradox:

• Profits have soared to record levels, but valuations lag peer industries significantly. 

• Loyalty has collapsed. The vast majority of customers no longer stay with their existing bank when opening new accounts. 

• AI is everywhere in marketing, but customer satisfaction with AI-powered interfaces is the lowest of all service channels. 

• Capital markets reward focused, proven strategies over broad "digital transformation" narratives.

Most leaders agree: AI and digital capabilities matter now because they're the only realistic levers to close the valuation gap while absorbing structural headwinds like rising compliance costs and new payment rails. But this comes at a risk. Yes, AI can deliver meaningful cost reductions of 15-20%. But if misused, it can erode profit pools by up to 9% and accelerate disintermediation.

Leaders who stand out will use Brand to earn a place in the initial consideration set, Experience to convert and retain across channels, and Technology to safely scale agentic AI, real-time payments, and digital currencies—advancing all three as one system and not separate initiatives.

Digital investment without proof no longer moves markets or customers

Financial services are stuck in a pattern where they market "digital transformation," bolt AI onto fragmented experiences, and run it on legacy-heavy infrastructure. Meanwhile customers and investors have shifted to rewarding precision and outcomes.

• Global banking generated around $1.2 trillion in profits with 10.3% ROE in 2024, yet only about 15% of banks are value creators on price-to-book and price-to-earnings metrics—a 67% valuation gap. 

• Only around 4% of checking applicants opened a new account by simply staying with their existing bank in 2025, down from about 25% in 2018—an 84% collapse in loyalty. 

• 77% of customers prefer mobile banking and at least 73% expect full app functionality, while 72% cite personalized products and services as a key bank selection factor, but only 29% are satisfied with chatbots. 

• 41% of banks already offer cryptocurrency services and 28% offer fiat-backed stablecoins, yet 77% say substantial or major effort is required to enable stablecoins and tokenized deposits. 

• Around $5 trillion of cross-border value and $5 billion of fees could shift to alternative rails by 2028.

Misalignment doesn’t just lead to underperformance, it accelerates disintermediation

Customers already live in mobile apps, wallets, generative AI, and emerging digital assets—but most banks still deliver siloed journeys and weak AI on legacy systems that can’t support instant, cross-border, or multi-rail payments. Misaligned AI and payment innovation shrink industry profit pools, while a small group of leaders compound advantage and widen the valuation gap.

A key issue here is trust. Financial institutions cite a lack of trust as the main barrier to agentic payments, even as customers want AI-enabled banking and factor it into how they choose their banking provider. Poor execution drives churn and leads to regulatory backlash, especially under tightening regimes like the EU AI Act. Meanwhile, private credit, digital-first fintechs, and big platforms capture flows with sharper products and modern infrastructure, pulling fees away from legacy-bound incumbents and undifferentiated fintechs.

The verdict is clear: vague “digital transformation” hasn’t restored customer loyalty or valuation. The next phase demands proven value, trusted AI, and systems that function as one single system.

Read on to explore how financial services organizations can align brand, experience, and technology to close these gaps.

The challenge: Transformation narratives no longer move capital markets or rebuild loyalty

Financial services leaders talk more than ever about AI and platforms—but customers, investors, and regulators now demand proof, not promises. The question is no longer who is “transforming,” but who can show measurable progress in closing valuation gaps and rebuilding loyalty.

Yet many brand narratives remain anchored in scale and generic claims of “digital transformation,”even as decision-makers reward precision: clear outcomes, trusted governance, and defined ecosystem roles. As a result, vague innovation stories no longer differentiate. They are easily discounted by markets, ignored by customers, and increasingly scrutinized by regulators.

This shift has pushed compliance and governance into the spotlight. Under frameworks like DORA, the EU AI Act, PSD3, and CSRD, factors like trust, explainability, and control have become front-stage brand assets. These are seen not as constraints, but as reasons to be chosen.

• Fintech funding has become selective: total funding is down, yet $8.4 billion flows to digital assets and $7.2 billion to AI-focused fintech in 2024-2025, while payments funding falls from $30.8 billion to $4.6 billion. 

• The loyalty loop for checking collapsed from 25% in 2018 to 4% in 2025, and about 77% of checking and 75% of card openings are decided once the initial consideration set is formed. 

• 87% of financial institutions cite customer trust as the top barrier to adopting agentic payment models.

Solutions to explore

Position around value and trust

Explicitly show how your strategy targets the valuation gap, where AI delivers cost reduction, and how you measure results ,not just adoption metrics or feature launches. Make compliance capabilities, explainable AI, and audited fairness the visible reasons for why customers choose you and your investors back you.

Define clear ecosystem roles

Clearly communicate whether you're an interface, infrastructure provider, or orchestrator in the open-finance market. Be explicit about which partner rails you support, which APIs you expose, and how you protect customers in embedded finance contexts. Position your role in connecting commerce, mobility, healthcare, and other verticals, not just as an isolated product vendor.

Build a financial operating system narrative

Position yourself around the capabilities customers expect, from customization to lifetime value. Show how programmable money, tokenization, and digital assets fit your roadmap, even if a few infrastructure gaps remain. Frame this as an evolution toward becoming a platform, not just a product portfolio.

What should leaders do next? 

Update strategy and investor messaging with clear valuation, cost, and funding targets; publish an AI trust charter with explainability and human‑in‑the‑loop standards; and define ecosystem roles, APIs, and payment rails in 2‑3 priority verticals

The challenge: Fragmented channels and weak chatbots are widening the switching gap

Customer and agent experiences are under-leveraging AI, while still remaining fragmented and uneven. Users expect mobile-first, hyper-personalized, wallet-friendly, low-friction journeys, but they encounter only siloed channels, ineffective chatbots, and security that adds friction blindly rather than adapting to risk.

This fragmentation has consequences: chatbots deliver far lower satisfaction than mobile apps or branches. Yet most consumers today already use generative AI. Many even use it for banking tasks, and most want banks to offer AI tools. The gap between AI adoption in daily life and AI effectiveness in financial services is widening and it is creating both a competitive and switching risk.

Physical channels further complicate this. Most checking account openings and new balances still occur in branches—even as mobile adoption has significantly increased and mobile-active clients generate substantially higher revenue than non-mobile clients. This demands true orchestration across channels, not just digital-only or branch-only strategies.

• Mobile adoption jumped from 41% in 2020 to 63% in 2024, with mobile-active clients generating twice the revenue of non-mobile clients.

• Despite this, 72% of checking openings and 90% of new balances still happen in branches, highlighting the need for true cross-channel orchestration.

• Satisfaction varies by channel: 60% very satisfied with mobile apps, 50% with branches, but only 29% with chatbots, showing weak AI touchpoints.

• 51% of consumers use generative AI, yet only 23% use it for banking tasks, indicating a gap in AI adoption.

• Payments are rapidly shifting: 90% of North Americans use digital payments, 56% use wallets, and BNPL is used by 52%; globally, wallets capture ~30% of POS transactions, with P2P wallets reaching ~80% of Gen Z and Millennials.

Solutions to explore

Orchestrate AI-Driven, Multi-Rail Journeys

Unify branch, mobile, web, and contact center interactions with shared context and seamless handoffs. Move beyond FAQ chatbots to conversational, multimodal interfaces that can resolve disputes, process transactions, and trigger workflows. Integrate emerging rails like digital wallets, stablecoins, and tokenized deposits into end-to-end journeys, while simultaneously preserving high-value physical interactions.

Personalize at segment-of-one level

Use unified customer data and AI to move from broad demographic segments to truly individualized experiences. Deliver content, offers, and guidance based on actual customer behavior and context, not generic templates. This creates loyalty and higher conversion across channels.

Prepare for agentic commerce

Design verification, consent, rate-limiting, and fraud controls for non-human users accessing your APIs. Extend these safeguards to crypto-enabled transactions, digital wallets, and tokenized deposits, ensuring security and compliance while ensuring that workflows remain seamless and autonomous.

What should leaders do next?

Rationalize 3‑5 critical journeys such as onboarding, disputes, cross‑border payments, SME lending, across all channels, deploying AI agents that act, not just answer. Personalize 2‑3 experiences tied to acquisition and cross‑sell.

The challenge: Legacy systems cap every AI and payment rail ambition

Most institutions try to deploy AI and new payment rails on legacy, fragmented systems that struggle to support agentic AI, real-time payments, or digital currencies at scale. 

These outdated architectures drive rising costs, create both security and operational risks, and leave little room for any innovation. Bolt-on compliance or incremental upgrades cannot close the gap. Only open, modular, and transparent platforms can provide the foundation for safe, scalable AI and multi-rail payments. 

The AI opportunity is huge but fragile: without stable, governed, and cost-transparent infrastructure, profit pools shrink and disintermediation accelerates. Value creation depends on systems that can scale, not ones that break under pressure.

• Banks underestimate legacy total cost of ownership by up to 80%, with 75% of IT budgets tied to maintenance and average breach costs of $4.45M.

• 90% of leaders have generative AI budgets, 79% are piloting agentic payments, yet most deployments remain experimental; 57% of corporates expect agentic payments to be mainstream within three years.

• AI can reduce costs globally by 15–20%, but without infrastructure changes, profit pools could shrink by ~9%.

• 41% of banks already offer crypto services, yet 77% report substantial effort to enable stablecoins and tokenized deposits.

• $5T in cross-border value and $5B in fees could shift to alternative rails by 2028.

• Linux powers 81% of finance servers, projected to 83% in 2028.

• Open-banking and open-finance models may unlock $330B in incremental revenue by 2032 through API-based and B2B2C revenue-sharing.

Solutions to explore

Modernize around open, cloud-native, AI-ready foundations

Consolidate and modularize systems with cloud-native, open-source platforms. This reduces technical debt, strengthens governance, and provides the foundation for orchestrated journeys, agentic AI, and digital currencies. Observability, orchestration, and compliance-logging ensure that AI can scale safely and deliver measurable value, rather than remaining in isolated pilots.

Prepare for multi-rail payments and digital currencies 

Deploy modular policy engines and settlement services for fiat, stablecoins, and tokenized deposits. This lets institutions manage cross-border flows and fees efficiently, with built-in cost transparency, usage controls, and governance, so that new rails can scale without multiplying complexity.

Use AI to fix legacy

Deploy AI code generation and reverse-engineering tools to translate legacy COBOL into modern languages and accelerate safe modernization—leveraging the fact that significant portions of code for some developers are already AI-written. This creates a flywheel: AI helps modernize the infrastructure that AI itself requires to scale.

What should leaders do next?

Rationalize 2–3 modernization moves that unlock the most value. Wrap legacy cores with APIs or replace a high-risk monolith. Stand up a digital currency readiness program. Launch at least one “agentic domain” (fraud, collections, or customer care) with full-stack AI services, monitoring, and orchestration.

Financial services still hold the most valuable relationships in the economy, but transformation theater is no longer enough to hold them. The institutions that prove value, rebuild loyalty, and embrace the new rails will defend against disintermediation and capture the opening ground.

The institutions that are ahead have stopped treating brand, experience, and technology as separate programs. They run them as one system, because that's what it takes to close the valuation gap, rebuild loyalty, and defend against disintermediation simultaneously.

AREA 17 combines strategic consulting with hands‑on product development, working with financial services organizations to think, design, and build the platforms that can:

Demonstrate proven value and ecosystem positioning, by moving from generic digital transformation claims to clear brand positioning backed by measurable outcomes, compliance as a differentiator, and defined roles in open finance that win customers and investors.

Convert every channel into one loyalty-building journey, by orchestrating mobile, branch, and AI interactions with shared context, replacing weak chatbot experiences with conversational interfaces, and integrating wallets, stablecoins, and new payment rails into end-to-end flows.

Scale AI and new payment rails on modern infrastructure, byreplacing legacy-bound stacks with cloud-native, API-first platforms that support agentic automation, real-time payments, and digital currencies, while simultaneously reducing costs and protecting profit pools.

Contact us to explore how we can help

Sources

Accenture – The Future Is Back: Banking Trends 2025

Accenture – The Future of Money

Deloitte – CFO Signals Survey

Deloitte – Financial Services M&A Trends 2026

Finextra – Bank Profits Face $170bn Hit from AI (McKinsey)

Innowise Group – Fintech Trends 2026

Innovate Finance – The F Word Report

ItsCredit – Shaping the Future of Finance 2025–2026

KPMG – Pulse of Fintech H1 2025

KPMG – Top Fintech Trends H2 2025

Mastercard – Agentic Commerce Framework (2025)

McKinsey – Global Banking Annual Review 2025

McKinsey – Global Payments Report 2025