Bain & Company: Six threats demand a new playbook for banks

February 13, 2026

Risk Management Banks

Banks no longer compete only with each other; they are increasingly competing with tech-native platforms, public and private asset managers going direct to consumers, and decentralized finance firms. The traditional full-service, balance-sheet-heavy model is under pressure across all fronts: wealth, payments, credit, and capital markets.

Partly as a result, traditional banks have slipped from capturing 95% of the addressable revenue pool in the early 2000s to about 80% today. By 2030, Bain & Company estimates they could hold only 65%, further ceding ground to fast-moving challengers emphasizing asset outperformance.

In a recent article, Bain & Company identified six trends challenging the traditional banking model:

Performance, not products, wins clients. Fee compression is real - but so is the upside for the companies that manage to generate alpha on clients’ investments. Beta pricing is collapsing, with margins on passive investments expected to shrink by 15 basis points, on average, by 2030 - a 6% compound annual rate. In light of the trend in beta investments, banks must pivot from product distribution to delivering differentiated alpha.
Advice goes algorithmic. Business models enabled by full-stack digital technologies and AI allow firms to scale up profitably by reducing operating costs and delivering an experience that appeals especially to younger investors. In a digital world, clients can switch advisers more easily based on performance. So as banks scale up by investing in AI and other technologies, they must do so in ways that maintain credibility and trust among customers.
Manufacturers move direct to consumer. As asset managers claim more direct relationships with investors, they will earn more trust, share of wallet, and data. Banks will need to counter with stronger owned distribution channels and improved technology platforms.
Banking becomes plug and play. As interfaces become modular, the winners will be companies that control access. Open finance and real-time payment rails are enabling API-native players to plug into core banking functions and siphon off value. Banks will have to fight to remain gatekeepers, building or partnering into ecosystems that embed services into the overall client experience.
New forms of assets create new consumer value - and competition. Stablecoins, tokenized assets, and private credit are creating new off-balance-sheet arenas, and interest is growing in tokenized assets and private credit. Real-time rails plus the growing use of blockchain shift value away from legacy intermediaries. And nonbank firms are expanding their loan origination. Losing revenues from deposits would be a major threat for many banks, so pressure intensifies for them to clarify their role in the new capital stack. Whether that’s as ecosystem integrators, originators, or infrastructure participants, staying passive is not an option.
Borders are back, with local plays winning in certain dimensions. Trade issues are reshaping global banking economics. Local agility and regulatory fluency become more important than global reach in some cases, challenging global incumbents.

Bain & Company concludes that banks aiming to address the challenges head-on can consider three paths: Becoming a) a digital gatekeeper, b) a alpha powerhouse or c) an asset-light orchestrator. Each of these three paths includes options to build, buy, or partner to gain the necessary capabilities and technologies.

In a recent article, Bain & Company identified six trends challenging the traditional banking model:

Performance, not products, wins clients. Fee compression is real - but so is the upside for the companies that manage to generate alpha on clients’ investments. Beta pricing is collapsing, with margins on passive investments expected to shrink by 15 basis points, on average, by 2030 - a 6% compound annual rate. In light of the trend in beta investments, banks must pivot from product distribution to delivering differentiated alpha.
Advice goes algorithmic. Business models enabled by full-stack digital technologies and AI allow firms to scale up profitably by reducing operating costs and delivering an experience that appeals especially to younger investors. In a digital world, clients can switch advisers more easily based on performance. So as banks scale up by investing in AI and other technologies, they must do so in ways that maintain credibility and trust among customers.
Manufacturers move direct to consumer. As asset managers claim more direct relationships with investors, they will earn more trust, share of wallet, and data. Banks will need to counter with stronger owned distribution channels and improved technology platforms.
Banking becomes plug and play. As interfaces become modular, the winners will be companies that control access. Open finance and real-time payment rails are enabling API-native players to plug into core banking functions and siphon off value. Banks will have to fight to remain gatekeepers, building or partnering into ecosystems that embed services into the overall client experience.
New forms of assets create new consumer value - and competition. Stablecoins, tokenized assets, and private credit are creating new off-balance-sheet arenas, and interest is growing in tokenized assets and private credit. Real-time rails plus the growing use of blockchain shift value away from legacy intermediaries. And nonbank firms are expanding their loan origination. Losing revenues from deposits would be a major threat for many banks, so pressure intensifies for them to clarify their role in the new capital stack. Whether that’s as ecosystem integrators, originators, or infrastructure participants, staying passive is not an option.
Borders are back, with local plays winning in certain dimensions. Trade issues are reshaping global banking economics. Local agility and regulatory fluency become more important than global reach in some cases, challenging global incumbents.