Classic banking models no longer profitable

The landscape around the financial sector has changed drastically recently, and the relatively straightforward indicators traditionally used to assess its growth and profitability are simply no longer applicable, at least in giving us the full picture. For example, GDP growth is no longer connected to lending as it used to be as there are more outlets for obtaining funding than there were in the past. This has led to a situation where classical banking is being threatened. In fact, it has ceased to be profitable enough to generate returns to shareholders that exceed the return on investments in other sectors and compensate for regulatory pressure on them. Because of this, financial institutions still operating under traditional (i.e. old and outdated) ways of thinking need to quickly catch up to the realities of 2020 to remain competitive and relevant. This means embracing new technologies, especially artificial intelligence, and transitioning away from ready-made financial products to a model that meets individual consumer needs and fits easily (almost seamlessly) into their day-to-day lives. This is not only the future of the financial sector; it is the now of it as well.