Retail banking CEOs are facing a moment like never before—one of profound disruption. That was the overarching message that emerged from Curinos CEO Sid Singh’s conversation on May 12 with Lindsey Johnson, President and CEO of the Consumer Bankers Association, at Curinos’ Insight to Impact Growth Summit in Nashville. Traditional banks are confronting a new competitive reality in which growth is harder to achieve, customer loyalty is increasingly fragile and the economics of retail banking are under mounting pressure. All this amid the promise and peril of AI’s acceleration. Here are some of the highlights from the conversation about what may be keeping banking’s CEOs up at night.
1. Structural advantages are eroding.
For decades, banks benefited from structural advantages: trusted brands, physical branch networks, customer inertia and regulatory barriers that limited competition. But today fintechs and nonbank competitors are gaining banking charters, allowing them to compete directly for deposits and payments while offering an accessible, friction-reduced customer experience. Digital-first providers have made it much easier for rate-sensitive customers to move money with a few clicks or taps. And consumers could soon delegate savings optimization and account switching to AI-powered assistants that continuously search for better offers.
2. Demographics and market economics are constraining growth and profitability.
At the same time that competition is intensifying from nontraditional providers, profitable growth in retail banking is being constricted by broader demographic trends and economic realities. Population growth is slowing, making it harder to expand the customer base organically, and profitability is under pressure from rising acquisition costs and continued margin compression. Banks are spending more than ever to win customers who are increasingly willing to leave for a better rate, faster onboarding and a more intuitive digital experience.
3. Banks need to play to their strengths, and add to them.
Today’s environment is forcing executives to rethink growth, and, increasingly, the solution isn’t scale alone, but customer quality and relationship depth. Fortunately that can play to a bank’s strengths because most profitable customers are those that are acquired and nurtured through trusted advisory relationships, particularly in branches. These branch-originated relationships tend to produce larger balances, longer tenure and broader product adoption than those acquired solely through digital means. But that’s not to say that a “branch and a smile” is sufficient. While customers still trust their banks, their expectations have changed dramatically. Along with the confidence and security they may feel toward you, they want the convenience and personalization they’ve become accustomed to from the tech companies they deal with in a variety of industries.
4. Success will hinge on understanding the bank’s customers faster.
Leading institutions are recognizing that their future lies in combining human relationships with AI-powered decision intelligence. The branch advisor of tomorrow will not rely simply on intuition or periodic account reviews. Instead, frontline employees will be armed with AI-assisted insights that identify customer needs in near-real time, enabling more relevant conversations and more effective recommendations. This will be complemented by digital engagement tools that keep customers connected between physical visits. Successful FIs will be those that create ecosystems in which personalized advice, proactive actions and digital convenience will reinforce one another seamlessly.
5. Deposit retention has become a critical battleground.
Recovering lost deposits can be 3x more expensive than keeping existing balances on the books. In an era in which customers can move funds instantly to higher-yield alternatives, that means retention strategies are becoming foundational to relationship profitability. Because of this, some banks are already demonstrating what effective relationship deepening can look like. Programs such as Bank of America Preferred Rewards incentivizes customers to consolidate deposits and investments by offering escalating benefits tied to relationship balances. These strategies are designed to make switching less appealing and strengthen loyalty over time.
6. Adding to profitability erosion: the shift in payments.
Fintech platforms and technology companies are steadily capturing transaction volume that once flowed almost exclusively through banks as digital wallets and embedded payment ecosystems change consumer behavior. Cash App is seeing double-digit growth per year, Apple Pay volume is doubling every two years, and platforms such as Amazon and Uber are expanding their financial capabilities. Many banking leaders believe nontraditional players could eventually absorb 20% to 30% of payments revenue currently generated by traditional financial institutions. Banks are countering the encroachment by modernizing legacy tech, leveraging real-time payment rails, and offering standalone banking apps to capture non-customers.
7. Existential question of the day: how best to harness and deploy AI.
Nearly every bank claims AI is a strategic priority, especially as consumers increasingly use AI-powered tools for financial guidance and decision-making, but fewer than a third of them are realizing meaningful outcomes despite widespread investment. The problem is not simply technology adoption. Many banks still struggle with fragmented data environments and the absence of an effective decisioning layer that converts raw information into actionable customer engagement. Without high-quality data and intelligent orchestration, AI becomes little more than a faster path to average.
Conclusion
For retail banking executives, the message is clear: The future will belong not to institutions with the most branches or the largest marketing budgets. It will belong to those that combine trusted human relationships with intelligent, data-driven engagement. The winners will use AI not merely to automate processes, but to deepen customer understanding, strengthen loyalty and deliver timely, relevant financial guidance at scale.
