Banks are on their way to becoming the Netflix of financial services

AI, because it interprets an extremely wide range of data, will be disruptive to banking, in the sense that it will turn banks into a veritable “Netflix” of financial services. The metaphor is taken from the CEO of one of the largest Portuguese banks and refers to the increasing personalization of services that this technology allows. AI lets you know what each customer likes and needs. Therefore, financial services will be targeted and personalized.

The past 18 months have been the best period for banking overall since at least 2007, as rising interest rates boosted profits in a more moderate credit environment. Bank profits are rising, thanks to rising interest rates and their impact on financial marginal income, but financial institutions around the world need to reinvent themselves in the face of major structural changes. After mobile sales and digital sales, it is the turn of artificial intelligence (AI) and generative AI to enter the banking sector.

In a recent analysis, McKinsey suggests five priorities for financial institutions looking to reinvent themselves and prepare for the future. These are: exploring cutting-edge technologies (including artificial intelligence), adjusting and perhaps even unbundling the balance sheet, scaling up or exiting transactions, reconciling distribution, and adapting to an ever-changing risk landscape. In its analysis this year, McKinsey focused on the “Great Banking Transformation.”

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