For decades, commercial banking operated within a stable and predictable model. Change happened gradually. Transformation was discussed, planned, and often deferred. That rhythm no longer holds.
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Commercial banking is now under pressure from all sides. Client expectations have shifted. New competitors are embedding financial services directly into business workflows. Costs are rising while margins are tightening. The industry has reached a point where standing still is no longer neutral , it is a strategic risk.
According to KPMG’s 2025 Banking Survey, over half of banks cite emerging fintech competition as a key driver behind accelerating digital transformation, particularly in commercial and corporate banking. The message is clear: the pace of change has fundamentally increased.
Commercial banks sit at the centre of complex client relationships. They manage liquidity, credit, payments, and risk for businesses that rely on speed and certainty. Historically, that role created stability and long-term loyalty.
Today, those same clients expect commercial banking to feel as seamless as the digital platforms they use daily. CFOs and treasurers compare their banking experience not just with other banks, but with enterprise software, payments platforms, and digital-native services.
BCG highlights this shift clearly in its report “The AI Reckoning Is Here”, noting that banks are now competing on experience and intelligence, not just balance sheet strength.
The transformation underway is best described as the consumerization of commercial banking. Business clients no longer tolerate fragmented portals, manual onboarding, or delayed visibility into cash positions. Speed, personalisation, and transparency are no longer differentiators, they are expectations.
KPMG reports that slow onboarding remains one of the most significant pain points in commercial banking, with many institutions still taking weeks or months to fully onboard a new client. In a real-time economy, this delay directly impacts revenue and relationship strength.
Commercial banks are no longer competing only with each other.
API-first fintechs, ERP providers, payments platforms, and embedded finance players are inserting financial services directly into business workflows. Accounting platforms now offer payments. Procurement tools offer credit. Treasury dashboards offer insights that once belonged exclusively to banks.
McKinsey’s research on embedded finance estimates that embedded financial services could generate hundreds of billions in value globally over the next decade, fundamentally reshaping how businesses access banking capabilities.
This is no longer competition at the product level. It is competition for workflow ownership and ultimately, for the primary client relationship.
Inaction is expensive. Delayed onboarding leads to unrealised revenue. Manual processes increase operating costs. Fragmented data limits insight and responsiveness. At the same time, labour shortages, regulatory pressure, and interest rate volatility are compressing margins.
KPMG notes that while 86% of U.S. banking leaders believe AI will provide a competitive advantage, many institutions still lack the governance frameworks and measurement tools needed to track ROI. Without execution discipline, AI investments remain theoretical. In this environment, doing nothing actively erodes profitability and relevance.
The future of commercial banking does not lie in better portals alone. It lies in embedding banking services directly into the client’s operating environment.
Businesses do not want to manage banking as a separate activity. They want liquidity insights inside their ERP. Credit at the point of purchase. Payments that move instantly and invisibly.
Artificial intelligence is the catalyst enabling this shift. Treasury functions are moving from retrospective reporting to predictive liquidity planning. Lending decisions are becoming context-aware and instant. Payments are evolving into always-on, intelligent flows.
BCG compares this moment to earlier generational shifts in banking infrastructure, not a feature upgrade, but a survival-level transformation.
One concern often raised around AI-driven transformation is the future of the Relationship Manager (RM).
In reality, AI elevates the RM role rather than replacing it. AI copilots reduce administrative burden, surface insights, flag risks, and suggest next-best actions. This allows RMs to focus on advisory work, complex problem-solving, and relationship orchestration.
KPMG emphasises that this evolution requires more than technology. It demands role redesign, governance, and clear success metrics. Without these, even the most advanced tools fail to deliver meaningful change.
Commercial banks still hold a critical advantage: trust built through long-standing client relationships. But trust is not static. It must be reinforced through relevance, speed, and performance.
The institutions that will thrive are those that:
This is no longer a question of growth opportunity. It is a question of strategic necessity.
At FT, we help commercial banks modernise without destabilising what already works.
Our approach is consulting-led and vendor-agnostic. We start by identifying where embedded banking and intelligence create real business value. From there, we design composable architectures that integrate with existing cores, ERPs, and payment systems, avoiding disruptive rip-and-replace programs.
We help banks operationalise AI across onboarding, treasury, lending, payments, and relationship management, with a clear focus on governance, execution, and ROI.
Reinvention is no longer optional. The banks that act decisively will lead the next era of commercial banking.
Book a strategy call to explore how your institution can move toward embedded, intelligent commercial banking.
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