Why Banking's Next Competitive Advantage Is Human

By Eric Feldstein, Head of Retail & Business Banking, M&T Bank

One of the biggest myths in banking today is that younger consumers are abandoning traditional banks in favor of fintechs. But the data tells a different story.

Consumers aren't replacing banks. They're building financial ecosystems. 

Today's customers often maintain relationships across multiple providers for payments, lending, investing, saving and budgeting. As their financial lives become more fragmented, with nearly three-quarters engaging with multiple banks beyond their primary institution, the challenge is no longer becoming a customer's only provider, it's becoming the institution they trust most when important financial decisions arise.

The banks that thrive in the next decade won't be defined solely by digital banking solutions or branch networks. They will position themselves as trusted financial partners that combine capabilities with guidance, helping customers improve their financial wellness and feel more confident, informed and in control of their financial future.

Over the last decade, banks have invested heavily in digital financial services transformation, making it easier for customers to open accounts, move money and manage their finances from anywhere using online banking or mobile banking apps.

Those investments have fundamentally changed customer expectations.

Today, consumers expect onboarding to be fast. They expect payments to happen in real time. They expect to manage their accounts through intuitive mobile experiences and move effortlessly across omnichannel banking experiences that connect digital and physical channels.

In short, they expect banking to work.

Delivering that experience requires strong execution across several core areas:

• Onboarding: Consumers generate 24.7K+ digital application starts per month, while 72–74% of businesses want a single destination to open and manage accounts.^*

• Mobile: 57% of active consumer users are mobile-only, and business mobile adoption has reached 56% among small businesses.^*

• Insights: Businesses increasingly expect intelligence built into banking, with 64% valuing alerts and up to 73% comfortable with AI-driven insights.^*

• Security: 76% of consumers actively bank digitally while 69% of businesses prioritize MFA, underscoring the need for seamless security across channels.^*

These capabilities remain essential, but they are no longer what sets institutions apart.

Convenience has become the price of admission.

As digital banking solutions continue to mature across the industry, customers are increasingly evaluating their financial institutions on a different question: Does my bank help me make better financial and money management decisions?

The next competitive advantage will belong to institutions that go beyond making banking easier and help customers through personalized financial education, financial wellness tools, and guidance that gives them greater confidence.

^*Source: M&T Bank Research Reports

The future of banking will not be defined by who has the fastest app or the best digital customer experience.

It will be defined by who helps customers make better decisions.

Financial lives have become more complex. Customers are navigating rising costs, competing financial priorities, market uncertainty and an overwhelming amount of information.

The opportunity for banks is not simply to provide more information. It is to provide clarity through financial education, personalized insights, and guidance that supports financial wellness and better financial decision-making.

• Can I afford this home?
• Am I saving enough?
• How should I prioritize paying down debt?
• Is there a better way to manage my cash flow?

These are the questions that shape financial confidence.

Technology, data, analytics and artificial intelligence can help customers improve their financial wellness and answer important financial questions. But the greatest opportunity is not automation for its own sake—it's using these capabilities to extend the value of relationship banking to more customers, more consistently and at greater scale.

The institutions that succeed will be those that transform data into guidance and, importantly, guidance into action. That's how banks move from being service providers to trusted advisors.

One prediction has consistently missed the mark over the past decade: the idea that digital banking would eliminate the need for human relationships.

If anything, the opposite is happening.

As financial decisions grow more complex, the value of trusted expertise has become even more important.

Customers overwhelmingly prefer digital banking solutions for everyday banking. But when the stakes are high—buying a home, expanding a business, planning for retirement, managing wealth or navigating a financial setback—they still seek guidance from people they trust.

The future of banking is not digital-first or branch-first. It is relationship-first, combining seamless digital banking experiences with trusted human guidance.

The institutions that win will create experiences that allow customers to move seamlessly between digital tools and human expertise without losing context. Customers should feel that they have one relationship with their bank, regardless of how they choose to interact. 

This is where many community and regional banks possess a distinct advantage.

Trust remains one of the most valuable assets in financial services. Strong relationships, local expertise, and a deep understanding of customers' needs continue to matter. The challenge is translating those strengths into experiences that feel just as relevant in a mobile app as they do in a conversation with a banker.

Digital convenience is now table stakes. Customers expect banking to be fast, simple and available wherever they are.

The next challenge is helping people navigate increasingly complex money management needs with financial empowerment and greater confidence.

That requires more than technology. It requires turning information into insight, insight into action and transactions into trusted relationships.

The banks that win won't simply make banking easier. They'll help customers make better decisions.

And that's why I believe banking's next competitive advantage is human.

Connect with an M&T representative to discuss your needs and learn how we can support your financial journey.