Whether it's dealmaking, new markets or a more aggressive pursuit of existing customers' wallets, we believe firms should be actualizing their expansion plans in anticipation of better times ahead.
Key information:
- Go on Offense: With expectations for more interest rate cuts and streamlined regulations -- plus a potentially faster growing economy, expanding profits and generally strong capital levels -- banks are in a position to reassess their growth agenda. However, care will be needed in allocating capital to the capabilities that offer the most attractive risk-adjusted returns.
- Regulatory compliance is necessary, especially for dealmakers: A clean bill of health on regulatory matters likely will be table stakes for government approval of mergers and partnerships. The Federal Reserve's top banking supervisor remains focused on capital, liquidity and governance. Resolving high risk matters in early 2025 will be an important objective for those pursuing aggressive, non-organic growth.
- The AI advantage rests on data, humans and tech. The rapid adoption of AI is reshaping the sector, moving beyond experimentation to embrace agentic workflows. By combining the power of AI with data, top talent and strategic technology modernization, banks can define a new era of competitiveness.
Overall, 2025 presents opportunities for growth amid potential challenges, with a strategic focus on regulatory readiness, technological advancement, and market expansion.