“The talk still outpaces the walk, but there are strong reasons to believe that leading retail banks will move toward an AI-first technology foundation and operating model. In addition to the profit potential and margin squeeze cited above is the simple, yet substantial, risk of inaction. Even if only some retail banks successfully embed AI across their operations, these institutions will alter the competitive dynamics of the industry and render non- or slow-movers increasingly irrelevant over time.
More aggressive banks can get a head start from AI agents, which combine predictive and generative AI (GenAI) capabilities to observe, plan, and act autonomously. Unlocking this value, though, requires having the right prerequisites in place, including strong data foundations, scaled AI capabilities, and clear governance.
Hardly mentioned at all in 2024, agents already account for 17% of total AI value in 2025 across all industries, and BCG research shows them reaching 29% by 2028. Agents promise to be the biggest accelerator of value from AI and the basis for the AI-first retail bank. (See Exhibit 2.) Banks that ignore potential advances could be threatened with disintermediation.”