Banks face $170bn profit hit without AI shift

By Danielle Reed 18/06/2026 2 min read 3 views

The global banking industry faces potential profit losses of up to $170 billion by 2030 unless it integrates artificial intelligence and updates outdated operating models. A new study by the Dubai International Financial Centre (DIFC) indicates that resilience, rather than size or history, will decide which banks remain competitive over the next decade.

The change is driven by AI, digital-first rivals, and evolving customer demands. These factors compel traditional institutions to rethink their operations.

The second edition of DIFC’s 2026 Future of Finance series, titled The Changing Face of Banking: Building Resilience Through Change, explores how banks can adapt to disruption and strengthen their market position. It examines necessary adjustments to business models in response to rapid technological advancements.

Challenger banks, built on AI-driven and cloud-first frameworks, set new benchmarks for speed, personalization, and efficiency. Their expansion reveals weaknesses in conventional banking structures, increasing pressure on established firms. The study cautions that without swift action, industry profit pools could fall by $170 billion by 2030, leaving many institutions earning below their cost of capital.

AI has moved beyond a supplementary tool to become central to banking infrastructure. The report identified artificial intelligence as the sector’s clearest opportunity to address mounting competitive and profitability challenges.

Banks that act quickly will be better equipped to safeguard earnings while exploring new markets and customer segments. Financial institutions increasingly seek regulatory environments that allow testing of new services before broader implementation.

The study also points to underserved groups—entrepreneurs, women, and family offices—as untapped opportunities. Traditional banking models often overlook these clients, but AI-driven insights and tailored advisory services could help banks address their needs, creating new revenue and stronger relationships.

The center’s ecosystem now includes 290 banks and capital markets firms, including 17 of the world’s 19 globally significant banks. Its regulatory and legal structures support the creation of next-generation banking services and AI-enhanced client engagement.

This infrastructure strengthens Dubai’s role as a leading financial hub and a platform for shaping the industry’s future. The challenge for traditional banks lies in moving quickly enough to close the profit gap or risk falling behind.