Interview

As financial intermediaries, banks are indispensable to the functioning of the economy and society. They promote growth, innovation, and stability while managing risk and assuming social responsibility. Their role goes beyond mere capital intermediation to include supporting social and environmental goals. It is essential for banks to address megatrends in order to meet the technological, regulatory, and social challenges of the future.

Technological innovations in particular are a key driver of banks' competitiveness. They enable efficiency gains, improve the customer experience, promote innovation, and help meet regulatory requirements. At the same time, they challenge banks to address the long-term consequences of change and continuously adapt their business models. Banks that recognize and implement technological trends early on can secure valuable unique selling points in the long term.

How are technological megatrends such as AI, blockchain, digital ecosystems, platforms, and much more affecting the industry, and how can market participants successfully adapt and adjust? We shed light on these questions in an interview with Frank Schwab.

Nehir: Megatrends are the driving forces that trigger long-term and profound developments and have a lasting impact on society, the economy, technology, politics, and the environment. Why is it particularly important for banks to recognize these changes early on? What direct influence do megatrends have on the business model of banks?

Frank: Megatrends are changes that have a lasting impact on industries, societies, and technologies over decades. They are particularly relevant for banks because they act as an early warning system they show where customer behavior, regulatory frameworks, and technological possibilities are heading. Those who recognize these developments early on can strategically direct capital, talent, and technology to where new profit pools are emerging.

The impact on the business model is immediate. Banks are changing their earnings logic: Margins from interest and fees are increasingly being supplemented or replaced by data-driven, API-based, and platform-supported business models. Products are no longer developed and sold on a one-off basis, but are configured in a modular fashion, automated, and adapted in real time. At the same time, the operating logic is changing: automation, parameterization, and artificial intelligence are transforming traditional functional silos into flexible, capability-based organizations.

In short, those who understand megatrends not only recognize risks, but above all opportunities – and can actively shape the future instead of being surprised by it.

Intense competition, new regulations, volatility, and increasing complexity are posing challenges for banks. Decisions are being made amid uncertainty and have a direct impact on how banks will position themselves in the future. How can they strengthen their resilience by better understanding megatrends?

Frank: Resilience arises when banks do not fear uncertainty, but manage it systematically. Megatrends provide a structured basis for dealing with uncertainty productively. By developing various future scenarios—for example, for interest rate developments, geopolitical shifts, or technological disruptions—banks can identify early on which strategic options make sense in all conceivable worlds. These so-called “no-regret moves” form the backbone of a resilient organization.

Resilient banks think in terms of options rather than forecasts. They combine a stable core business with experimental growth areas. These are quickly scaled up if successful and rapidly discontinued if unsuccessful. This “options thinking” creates strategic agility. Equally important is the resilience of the technological infrastructure: multi-cloud strategies, data portability, and clear exit plans prevent banks from falling into dangerous dependencies.

Those who take megatrends seriously build resilience not as a reaction to crises, but as a forward-looking capability. It's about making change a routine – and transforming uncertainty, as a constant companion, into a source of strategic strength.

Geopolitical tensions are presenting Europe with new challenges. Digital sovereignty is seen as a key success factor in global competition. Why is it important for banks to maintain control over their digital technologies, data, and decisions?

Frank: In an increasingly geopolitically fragmented world, digital sovereignty is becoming a decisive competitive factor. For banks, this means nothing less than maintaining control over their own technologies, data, and decision-making processes. This control is not only a question of efficiency, but also of security and regulatory credibility.

Many banks today are deeply dependent on global cloud and platform providers whose infrastructure, pricing, and compliance frameworks they have little influence over. This dependence can become a strategic risk, especially when political tensions or new data protection rules jeopardize access to systems and data. Digital sovereignty therefore means positioning oneself technologically in such a way that core processes, data flows, and decision-making logic can be traced, verified, and, if necessary, operated independently.

Banks that secure their data sovereignty not only create regulatory trust, but also freedom to innovate. They can train their own AI models, monetize proprietary data sets, and use technologies in ways that secure competitive advantages. Digital sovereignty is therefore not an end in itself, but a prerequisite for remaining capable of acting in the long term.

Hardly any bank can ignore the topic of AI. There are now numerous use cases for AI in banking, covering various business areas. How is AI redefining value creation in banking, and how do you think this megatrend will affect banking in the long term?

Frank: Artificial intelligence is changing the entire value chain of banking – from customer engagement to risk monitoring. In sales, AI enables unprecedented personalization: banks can anticipate needs, increase conversions, and provide individualized support to customers. In the lending business, alternative data sources open up new access to previously underserved customer groups. AI-supported models allow for continuous assessment of risks and opportunities in real time.

AI is also leading to profound change in the back office. Routine tasks are being automated, processes accelerated, and error rates reduced. Employees are becoming “AI-assisted operators” who monitor, interpret, and further develop systems. At the same time, AI is changing governance: new risks – such as bias, model failure, or manipulation – require professional model risk management and clear accountability.

In the long term, banks will become “AI-first companies.” Competitive advantage will no longer come primarily from capital or branch networks, but from the quality of data, models, and the speed with which new insights are translated into products. AI is therefore not a tool, but a new industrial revolution in finance – and it will further blur the lines between technology companies and banks.

The emergence of new business models in banking is another feature associated with technological megatrends. Open finance or open banking, blockchain, and the emergence of platform-based ecosystems are defined as promising business models in this context. How can banks tap into new sources of growth and revenue based on these technological innovations? What needs to be done today?

Frank: The next phase of growth in banking will not come from new products, but from new business models. Open finance, blockchain, and platform ecosystems are opening up opportunities for banks to offer financial services in completely new contexts – embedded in digital customer experiences, trading platforms, or business processes.

Open interfaces, also known as APIs, transform banking services into scalable modules that can be integrated by partners and monetized through fee or transaction models. This transforms banks from pure providers to orchestrators: they connect their own products with those of external providers, creating network effects that promote growth and customer loyalty.

Blockchain technologies also enable the tokenization of assets, deposits, or trade finance. Transactions can be processed in near real time – with less counterparty risk and greater transparency. This opens up new fee models and more efficient use of capital.

It is crucial that banks lay the groundwork today: modern core systems, data quality, API architectures, AI expertise, and regulatory clarity. Only those who start early can translate these innovations into viable revenue models. Banks that not only observe megatrends but also implement them in concrete transformation steps will be the winners of the coming decade.