85% of Banks’ Corporate Clients Plan to Engage with a Non-Bank Financial Institution Within the Next Year as Competition with Private Capital Intensifies

Why It Matters

The shift signals a looming revenue squeeze for traditional CIBs and forces banks to accelerate digital transformation or risk losing market share to agile fintech rivals.

Key Takeaways

• 85% corporate clients will use non-bank providers within year
• Only 23% say banks meet real‑time, personalized needs
• 82% of CIB innovation projects fail revenue targets
• 29% of IT spend allocated to transformative technology
• 51% of executives explore tokenized products for new fees

Pulse Analysis

The corporate banking landscape is undergoing a rapid inflection point as large enterprises gravitate toward non‑bank financial institutions. Fintech firms and specialized lenders can deliver near‑instant credit decisions, integrated ERP‑treasury workflows, and transparent pricing, attributes that traditional CIBs struggle to match. This migration is amplified by heightened client expectations for real‑time data, personalized engagement, and innovative solutions—factors that now differentiate market leaders from legacy players.

For incumbent banks, the report highlights systemic impediments that hinder swift adaptation. A disproportionate share of IT spend remains tied to maintaining legacy platforms, with only 29% directed at transformative technologies such as cloud, AI, and advanced analytics. Governance gaps further stall AI adoption; just 26% of banks have centralized oversight, prompting cautious pilots rather than full‑scale automation. Cultural inertia compounds these issues, as 39% of respondents cite a conservative mindset that slows experimentation, while talent shortages push 40% of banks to recruit external AI expertise instead of upskilling existing staff.

Strategically, banks must re‑engineer their operating models to recapture client trust and revenue. Prioritising real‑time treasury capabilities, expanding tokenized product suites, and building enterprise‑grade AI platforms can unlock new fee streams and improve cost efficiency. Equally critical is forging ecosystems with fintech partners to accelerate innovation without overhauling core infrastructure. Institutions that successfully blend technology, governance, and a forward‑looking culture are poised to deepen client relationships, boost fee income, and sustain growth amid intensifying competition.