Banks around the world are staring down a potential seismic shift in their profitability, courtesy of advancing artificial intelligence technologies that could empower consumers like never before. A new report from consulting giant McKinsey warns that if financial institutions fail to adapt, they could see up to $170 billion wiped from their collective bottom lines over the next few years. This stark prediction hinges on the rise of “agentic AI”—autonomous systems that act on behalf of users to optimize finances, potentially disrupting traditional revenue streams in retail banking.

The consultancy’s analysis, detailed in a piece from StartupNews.fyi, paints a picture of customers increasingly turning to AI agents to manage everything from savings accounts to investment decisions. These tools could break through long-standing consumer inertia, where people stick with low-yield accounts or suboptimal loans due to hassle or lack of awareness. McKinsey estimates that without strategic pivots, banks might lose out on fees, interest income, and cross-selling opportunities as AI streamlines personal finance.

The Rise of Autonomous Financial Agents and Their Disruptive Potential

This isn’t just theoretical; the report highlights how AI could automate negotiations for better rates or automatically switch providers for optimal deals, eroding the “stickiness” that banks rely on. For instance, in deposit accounts, where low-interest offerings often persist because customers don’t shop around, AI agents could dynamically move funds to higher-yield options, slashing banks’ net interest margins. According to insights shared in American Banker, this could overcome the behavioral barriers that have long protected bank profits.

Yet, McKinsey isn’t all doom and gloom—it positions AI as a double-edged sword. Banks that harness these technologies internally could cut operating costs significantly, potentially offsetting losses through efficiency gains in areas like fraud detection and customer service. The report, echoed in a Finextra article, suggests proactive adaptation, such as developing their own AI-driven services or partnering with tech firms to retain customer loyalty.

Strategic Imperatives for Banks in an AI-Driven Era

Industry insiders are already buzzing about the implications. For mid-tier banks, the pressure is acute, as they may lack the resources of giants like JPMorgan Chase or Bank of America to invest heavily in AI infrastructure. McKinsey’s projections, as reported in TechRepublic, indicate that the $170 billion hit could materialize by 2027 if adoption of agentic AI accelerates among consumers, particularly in wealth management and lending sectors.

To counter this, executives are urged to rethink business models. This might involve creating AI ecosystems that integrate with customer agents, offering personalized incentives or seamless data sharing to keep users within their fold. A related analysis in UA.NEWS underscores the global scope, noting that European and Asian banks could face similar erosions, amplified by varying regulatory environments.

Broader Economic Ripples and the Path Forward

The potential profit squeeze extends beyond banks, rippling into investor confidence and economic stability. If AI agents democratize financial optimization, it could lead to more efficient capital allocation across economies, but at the cost of traditional banking revenues. McKinsey’s findings align with broader trends, such as those in a WebProNews overview of AI’s role in finance for 2025, emphasizing ethics and automation as key battlegrounds.

Ultimately, the report serves as a wake-up call for bank leaders to innovate or risk obsolescence. As one McKinsey partner noted in the coverage, the institutions that view AI as an ally rather than a threat will likely emerge stronger, reshaping how financial services are delivered in the digital age. With consumer adoption of these tools expected to surge, the window for adaptation is narrowing, demanding swift, strategic action from boardrooms worldwide.