Introduction

Banking has always been a trust business. Customers deposit their money with the belief it will be secure, regulators oversee institutions to ensure stability, and banks themselves must balance profitability with risk. Yet in 2025, the sector faces pressures that are reshaping its very foundation. The rise of digital-first challengers, relentless regulatory demands, and customers who expect seamless digital services are forcing incumbents to reinvent themselves.

Artificial intelligence (AI), automation, and modern workflows are no longer optional—they are becoming the backbone of compliance and customer growth.

The State of Banking in 2025

Pressure from Digital Competitors

Neobanks and fintechs are capturing significant market share by offering frictionless experiences. According to Accenture’s Top 10 Banking Trends for 2025, over 50% of new retail banking customers globally are opening accounts with digital-first providers (Accenture).

Regulatory Complexity

Deloitte’s 2025 Banking & Capital Markets Regulatory Outlook warns that regulatory change has reached its fastest pace in over a decade, particularly around ESG disclosures, AI ethics, cybersecurity, and customer protection (Deloitte).

Customer Expectations

McKinsey’s Global Banking Annual Review 2024 reports that 70% of banking customers now expect personalized, digital-first services, with dissatisfaction quickly leading to churn (McKinsey).

Pain Points for Banks

1. Compliance Overload – Financial institutions spend over $270 billion annually on compliance globally (Accenture).
2. Slow Onboarding – Manual KYC/AML checks delay account openings, frustrating customers.
3. Fraud & Risk – Sophisticated financial crimes exploit manual monitoring gaps.
4. Siloed Customer Journeys – Fragmented systems cause poor customer experiences.
5. Legacy Infrastructure – Core banking systems often date back decades, limiting agility.

Future Trends

• Responsible AI Adoption: Deloitte predicts AI will play a critical role in regulatory compliance, but banks must ensure transparency, bias testing, and model explainability.
• Embedded Finance & Open Banking: Accenture highlights that banks embracing APIs and partnerships will capture $230 billion in new revenue streams by 2030.
• Hyper-personalization: McKinsey found that banks using data-driven personalization saw 10–15% increases in revenue and significant retention improvements.
• RegTech Growth: Regulatory technology solutions are projected to grow at 20% CAGR through 2030 as compliance complexity rises.

Novitates’ Solutions

1. Digital KYC & AML Automation
   • AI-driven onboarding reduces verification times from days to minutes.
   • Real-time sanctions checks and anomaly detection.
2. Transaction Monitoring & Fraud Prevention
   • AI models detect unusual patterns, reducing false positives by up to 50% (Deloitte).
   • Integrated workflows escalate only high-risk cases.
3. Regulatory Reporting & Governance
   • Automated reporting aligned with global regulations (ESG, Basel IV, GDPR).
   • Pega-powered workflows provide audit trails and transparency.
4. Customer Journey Transformation
   • Omnichannel servicing with AI copilots for agents and self-service portals for customers.
   • Personalized recommendations based on behavior and lifecycle stage.
5. Legacy Modernization
   • APIs that connect old systems with modern platforms.
   • Gradual migration strategies to reduce risk.

Case Example

A Tier-1 bank partnered with Novitates to automate KYC. By integrating AI verification and case management, onboarding time dropped by 60%, while compliance accuracy improved. Customers were delighted, and the bank cut costs by millions annually.

Banking is being reinvented at the intersection of compliance and customer growth. Those who embed AI responsibly, automate compliance, and reimagine journeys will lead the next decade.

Novitates combines banking domain expertise with advanced Pega frameworks and AI models. We help banks cut compliance costs, protect trust, and win customers in the digital era.

Learn how Novitates can transform compliance into competitive advantage. Visit novitatestech.com today.