- Not Just Cost Efficiencies; AI Will Transform the Retail Banking Model
- AI Agents Emerge as Key Driver of Value
- BCG Outlines What it Takes to Go AI-First
BOSTON—Retail banks could unlock more than $370 billion annually in additional profits by 2030 through large-scale deployment of artificial intelligence, according to a new report from Boston Consulting Group (BCG). The findings highlight how AI can help banks offset tightening margins and rising costs, as well as the competitive risk of delaying transformation.
These insights are drawn from BCG’s latest publication, From Branches to Bots: Will AI Agents Transform Retail Banking? , released today. The report outlines the defining features of an AI-first retail bank and underscores the importance of agentic AI as a critical enabler. It also provides a roadmap for retail bank leaders navigating the transition from pilot deployments to end-to-end reinvention.
“AI isn’t just an efficiency play; it’s a catalyst for business model transformation,” said Holger Sachse , BCG managing director and senior partner and coauthor of the report. “Banks that move quickly to scale agentic AI and redesign their workflows will not only survive, they will lead.”
Agentic AI Is Redefining Operational Efficiency
The report shows that AI agents are already delivering tangible results. These autonomous systems combine generative and predictive AI to run workflows across compliance, customer service, and risk with near-zero marginal cost. They have improved collections performance while reducing costs by 30% to 40% and are reshaping the economics of retail banking.
Though rarely mentioned just a year ago, AI agents now represent 17% of AI-derived value across industries. BCG expects this to reach 29% by 2028, positioning agents as the largest accelerator of business impact from AI in banking and beyond.
The AI-First Bank: What It Looks Like
AI-first banks will redefine what market-leading banks can do. The BCG report highlights six characteristics that will define an AI-first bank:
- Hyper-personalized customer engagement. The branch manager of the future is an AI agent in the customer’s pocket that continuously monitors and engages with the individual’s financial life, anticipating needs before the customer articulates them, and making suggestions (or, if authorized, even taking steps) to implement improvements in real time.
- Individual comprehensive financial Solutions. Traditional products, such as loans, deposits, and credit and debit cards, will be replaced by adaptive financial solutions that flex in real time according to customer behavior and immediate needs.
- Invisible, embedded interfaces. Payments, credit, and savings are embedded seamlessly into apps and ecosystems where customers already live and do business (e-commerce, mobile, social).
- Autonomous operations. Agentic AI supervises and executes end-to-end workflows across service, compliance, risk, and exceptions, driving near-zero marginal cost at scale within clear policy, assurance, and human-oversight guardrails.
- Real-time risk and capital allocation. AI agents dynamically steer balance sheets, shifting liquidity, funding, and risk-weighted assets across clients, portfolios, and even geographies in near real time.
- Lean human core. Organizations shrink in headcount (and cost) but expand in reach and effectiveness as humans focus on strategy, governance, creativity, and relationships.
The result is not just cost efficiency, but a complete redefinition of the banking model.
Transitioning to AI-First Is a Strategic Imperative
Banks that delay risk being overtaken by faster movers. As AI-first institutions set a new pace of innovation, others may become structurally irrelevant. According to the report, AI adoption is not just about efficiency; it is about future viability.
BCG identifies three stages of AI maturity: deploy, reshape, and invent. The biggest gains occur only when banks scale AI to transform end-to-end workflows and introduce new business models. Sticking to basic automation will not be sufficient to stay competitive.
The Path Forward: Structured and Aggressive Scaling
“Too many banks are stuck in ‘deploy’ mode, automating tasks without rethinking their business,” said Bharat Poddar , BCG managing director and senior partner and coauthor of the report. “Those that fail to scale and invent will fall behind. AI-first banking requires more than tools; it demands a reinvention of the operating model.”
To lead in the AI era, banks must build robust data foundations, scale capabilities, and embed strong governance. Drawing on cross-industry lessons, the report outlines a clear playbook for capturing value quickly while laying the groundwork for lasting transformation.
Download the full report here.
Media Contact:
Eric Gregoire
+1 617 850 3783
gregoire.eric@bcg.com