Early this year, two seemingly unrelated headlines crossed my screen, namely that, AI-driven, European banks are preparing to cut up to 200k jobs, and that Lloyds Bank proved that real bank money can move, settle, and return via tokenised rails on the other. Together, they form a stark reminder about where banking and finance are heading. What will happen to revenue mix, job, and regulatory capital? Will new entrants take over the incumbents?
If tokenised deposits and assets become mainstream, commodified fee pools such as payments, custody, and securities processing, compress as processes become cheaper and more competitive. Yet, new revenue lines emerge around token issuance, on-chain custody, programmable cash, digital collateral, and new distribution models, with AI embedded in pricing, risk optimisation, and client servicing.
Employment shall rotate (painfully). Roles most likely to shrink include payments processing, reconciliations, confirmations, settlement operations, large parts of back-office trade support, and some layers of correspondent banking and intermediation, precisely the areas now targeted by large-scale AI-driven headcount reductions. Roles that grow include DLT engineering, platform architecture, cybersecurity, and data/analytics; compliance, legal, and risk specialists fluent in tokenised instruments and smart contracts; and product, structuring, and advisory roles focused on programmable finance.
Today, banks hold large capital and liquidity buffers not only against credit risk, but against opacity, latency, and operational fragility in the financial plumbing itself. In a pervasive tokenised environment, atomic settlement, real-time collateral management, and end-to-end traceability reduce counterparty exposure, intraday credit risk, while AI-driven monitoring, controls, and anomaly detection reduce operational loss events. Over time, this should allow regulators to rely on more risk-sensitive, data-driven capital treatment. The result would not necessarily be less capital in absolute terms, but less capital per unit of economic activity, due to higher balance-sheet velocity, lower capital drag, and structurally improved ROE without increasing leverage.
The future bank will look less like a transaction factory and more like a regulated technology platform; while transition costs will rise as legacy systems are retired and parallel infrastructures run, structural operating costs fall once modern rails dominate. The open question is whether incumbents can refactor fast enough to retain their advantage in clients and trust, or whether structurally cleaner new entrants will capture disproportionate value as the rails reset. One thing seems sure though, the question is no longer whether this future arrives, but who moves early enough to compound the advantages.
Let’s stay tuned.
