AI-first rivals set to reshape financial services landscape

Artificial intelligence is increasingly being viewed as a transformative force across financial services, but industry experts have argued that the greatest competitive advantage may come not from the technology itself, but from how organisations restructure around it.

A growing number of AI-first businesses have emerged with operating models designed around automation, data-driven decision-making and streamlined processes. Rather than using AI solely to improve existing workflows, these organisations have eliminated layers of work and organisational complexity, potentially allowing them to operate faster and at lower cost than traditional competitors.

The shift has significant implications for banks, insurers and FinTech firms, many of which have invested heavily in AI tools to enhance productivity, improve customer experiences and automate routine tasks. However, experts have suggested that many institutions have embedded AI within existing structures, preserving legacy processes and management layers that can limit the technology’s full potential.

As a result, the next phase of competition may be defined not by who adopts AI first, but by who redesigns their business most effectively around it. Organisations that continue to optimise existing work could find themselves competing against AI-first rivals that have removed entire processes and decision-making bottlenecks.

Johan Treutiger, Partner at Arthur D. Little, said, “Your nightmare competitor is not bigger or better funded. It’s AI-first, radically simpler, and has eliminated work you still manage.”

The findings come as financial institutions continue to expand AI deployments across customer service, fraud detection, compliance monitoring, risk management and operational efficiency. While these initiatives have delivered measurable improvements, experts believe the largest gains may come from broader organisational transformation rather than incremental automation.

AI-first organisations are expected to benefit from flatter structures, faster decision-making and greater agility. Such advantages could enable them to launch products more quickly, respond faster to customer needs and operate with significantly lower structural costs.

Petter Kilefors, Partner at Arthur D. Little, said, “The real AI divide is not between adopters and non-adopters, but between those who optimise work and those who eliminate it.”

The discussion reflected a wider debate across the financial services sector about the future role of AI. As institutions continue to invest in advanced technologies, attention is increasingly shifting towards operating models, governance frameworks and organisational design.

For banks and FinTechs alike, the challenge may no longer be whether to adopt AI, but how deeply they are willing to transform their businesses around it. Those that embrace structural change could be better positioned to compete in a market increasingly shaped by AI-first competitors.