In the past 20 years, many analysts and banking leaders predicted banks would lose their hold on customers. Some foresaw this after the 2008 financial crisis, others during the 2010s explosive growth of technology platform companies and the first wave of fintech startups.

Despite all these predictions, the tipping point where banks truly lost customer grip didn’t actually happen until 2025. This turning point was propelled by transformative changes across four key dimensions: the maturation of fintech firms, evolving customer behaviors, breakthroughs in neobanking, and the accelerated adoption of artificial intelligence (AI) and stablecoins, according to McKinsey’s 2026 Global Banking Annual Review.

Fintech firms evolve and mature

The report, released in May 2026, analyzes the global banking sector’s 2025 performance, profitability trends, and strategic direction for financial institutions. This edition highlights a tipping point in customer relationship, catalyzed in part by the evolution of the fintech ecosystem.

In 2025, fintech revenues reached US$650 billion. While this remains a small portion of the banking industry’s US$7.3 trillion, the sector has matured significantly, with established firms reaching scale, and using their capital to attack some of banking’s most valuable profit pools, particularly in payments, wealth management, capital markets, and lending.

A comparison of the world’s top 1,000 banks versus the top 1,000 fintech firms further highlights this trend. The “millenniad” of the top banks generated US$3.8 trillion in revenues, while their fintech counterparts generated US$625 billion. These figures represent a 22% increase between 2021 and 2025 for fintech firms, compared to just 5% for banks.

Looking ahead, fintech firms are set for further expansion as several reversed their strategy and are now actively pursuing banking licenses. In 2025, 21 banking license applications were filed in the US, marking a sharp increase from one in 2024 and five in 2023. About 38% of these applications were accepted.

Neobanking booms

Similarly, leading neobanks continued to grow in 2025, achieving scale at unprecedented speeds across major markets. As of December 2025, UK-based Revolut was the 11th-most-valuable bank in Europe, and now boasts 75 million retail customers. Nubank claims 135 million customers, and is the most valuable bank in Latin America. For China’s WeBank, the figures are 430 million customers and 11th place in market value among the nation’s banks.

Financially, these institutions outperform incumbents on several key metrics. While the return on equity (ROE) for the US and European banking industries sits at about 12%, Nubank’s is at about 30%, Robinhood’s exceeds 20%, and Revolut and Wise both clock in at about 35%.

Higher ROE for neobanks means they are generating more profit from every dollar of shareholder investment compared to traditional banks. This advantage largely comes from their lean business models, which avoids expensive physical branches and outdated technology systems.

As established neobanks grow, these players continue to expand their suite of banking products and services. Nubank launched in 2014 its first product, a no-fee credit card, and now offers current and savings accounts, debit cards, money transfer, and services for businesses.

Revolut, which launched in 2015 with prepaid cards, foreign exchange, and spending analytics, today offers about 50 products, including capital markets, commodities, and crypto trading; personal loans; a range of credit cards; and a suite of services for small and medium-size enterprises (SMEs).

Agentic AI and stablecoins are dissolving customer stickiness

AI agents and stablecoins represent two emerging technologies that threaten to erode the relationship between traditional banks and their customers.

AI agents can perform task and solve issues largely on its own. In deposits, they can monitor balances in real time, compare returns across institutions, sweep idle cash into higher-yield accounts, and then sweep cash back to a checking account in time for bills. This not only reduces customers’ reliance on traditional banks, but also allows more of the spreads captured by banks to go to account holders, effectively cutting off some of the revenue banks earn from passive accounts.

Beyond deposits, AI agents can help consumers shift credit card balances, exploit sign-up offers, and cash in loyalty points. They can also make tax planning simple for consumers and might provide an entry point into wealth management and advisory. Consumer lending and other banking businesses could also lose customers to agent-powered fintech solutions.

Stablecoins is another technology that poses a similar threat to the customer relationship. Stablecoins can make it cheaper and faster to send money across borders, which is particularly valuable for uses such as trade finance or remittances involving jurisdictions with less developed payments systems. As adoption of stablecoins grows, fiat deposits may shift toward stablecoin reserves, and businesses may reduce cash buffers required for international operations.

The stablecoins market has grown from less than US$10 billion six years ago to more than US$300 billion today. Citi estimates this figure could reach up to US$4 trillion by 2030.

Shifting customer behaviors

Finally, the fourth and last driver highlighted by McKinsey is the fundamental shift in customer behavior. Traditional banks have historically relied on older customers for an outsize share of revenues and profits. That’s becoming a problem as younger customers are revealing quite different preferences for how they want to bank. These customers are more highly engaged, expect services that put the customer at the center, value innovation, and prize responsiveness.

Incumbents oftentimes struggle to deliver these qualities, prompting younger customers to consider switching to nonbank providers. According to a 2025 Deloitte survey, younger consumers are significantly more willing to switch banks. Specifically, 26.6% of Gen Z and 22.5% of Millennial respondents, born between 1981 and 2012, indicated they are likely to switch within the next two years. This rate is two to five times higher than that of their Gen X or Baby Boomer counterparts, born between 1946 and 1980.

In terms of digital platform usage, Millennials lead across most categories, though Gen Z track closely behind, except for payments, where Gen X, millennial, and Gen Z respondents exhibit a similar level of preference.

Featured image: Edited by Fintech News Switzerland, based on image by thanyakij-12 via Magnific