A savings account will always be a savings account. A credit card will always be a credit card. These traditional banking products, once the cornerstone of achieving a competitive advantage, have become commoditized utilities in a digital-first world. The real innovation, and real value, lies not in these standardized offerings, but in the vast ocean of data that flows through financial institutions every second.

While executives once focused on interest rates, fee structures, and product features, today’s banking leaders are asking a radically different question: What if data itself is the bank’s most valuable product?

The great commoditization of banking products

The evidence of banking’s commoditization crisis is stark. McKinsey’s Global Banking Annual Review reveals that banking trades at a price-to-book ratio of just 0.9, the lowest of all industries. Revenue margins are projected to shrink from 3.1% in 2023 to 2.7% by 2030, and at the same time, traditional fee-based income streams will continue to erode.

Anyone who walks into any bank today will notice that the products look remarkably similar. Savings accounts offer comparable interest rates regardless of the provider. Credit cards compete primarily on rewards programs rather than fundamental innovation of their product model. Personal loans follow standardized underwriting criteria. The differentiation that once drove customer loyalty has largely evaporated, leaving banks competing in a brutal race to the bottom on pricing.

Financial services have joined the ranks of commoditized industries, or “Red Oceans,” where price, not innovation, drives purchasing decisions. Some examples include airlines, utilities, and telecom. For mainstream services, the end users don’t distinguish the product itself, just prices and basic reliability. This commoditization creates an existential challenge for institutions that built their strategies around product differentiation.

The data gold rush in financial services

Consider the practical applications of this strategy already yielding significant returns across the globe: 

• North America: JPMorgan Chase uses transaction data to create demand forecasting models for retail clients, generating $15 million in additional revenue for a major fast-food chain.
• Europe: Banks are earning over $12 million annually through subscription-based data analytics services.
• Asia: Institutions generate $15 million yearly by offering anonymized consumer spending insights to retail and government partners.

The economic advantage is compelling. While physical products face marginal cost constraints, data represents a renewable and scalable asset. Transaction information can simultaneously power fraud detection, credit assessment, personalized marketing, and third-party analytics, each application creating value without depleting the underlying resource.

Beyond compliance: Building a data-first banking strategy

A profound mindset shift is needed for this type of transformation. For decades, banks viewed data primarily through a compliance lens, a necessary burden to satisfy regulatory requirements. Investment in data infrastructure focused on meeting reporting obligations rather than generating business value.

Today’s leaders are rewriting this playbook. They’re establishing dedicated data monetization teams, implementing organization-wide “data champion” programs, and restructuring to create cross-functional teams spanning legal, compliance, IT, and strategy. Gulf Bank’s “Data Ambassadors” program engages 1,800 employees, exemplifying how institutions are building networks of data leaders throughout their organizations.

Open banking as a catalyst for data-driven innovation

Open banking regulations are turbocharging this whole shift by getting everyone to play by the same data-sharing playbook. It’s a thriving market, jumping from $31.5 billion in 2024 to an estimated $136 billion by 2030.

These regulatory frameworks are creating new opportunities for data-driven partnerships. Banks can collaborate with FinTech, retailers, and technology companies to create embedded financial services. Bottom line: your financial data stops being trapped in silos and starts working for everyone: banks make money, developers build cool stuff, and the customer gets apps that communicate with each other.

Banks are creating these sandbox environments where developers can experiment and build new things that can lead to real differentiation. Big institutions are discovering, not a moment too soon, that locking everything down just stifles innovation.

The future of banking is data-centric and AI-powered

By 2030, successful banks will operate as technology companies that happen to provide financial services. If they deliver on the promise of monetization and creation of new revenue models, data capabilities will determine market leadership more than traditional financial products ever could.

Customer expectations are evolving toward hyper-personalized, real-time financial experiences. AI-powered recommendation engines will become the cornerstone for primary banking relationships. Customers will no longer settle for one-size-fits-all services; they will expect to design their own financial portfolios with tailored products and dynamic data-driven pricing.

The choice ahead

The transformation from product-centric to data-centric banking represents an irreversible shift. Institutions that recognize data as their primary product and build organizational capabilities around this principle will capture disproportionate value in an increasingly competitive market.

Forward-thinking banks are already seeing impressive payoffs from putting their data to work. However, it’s not as simple as buying the latest technology and calling it a day.  Success depends on shifting the organizational mindset, restructuring how things work, and never stopping innovating.

The next few years will be critical as banks move from experimentation to full-scale implementation. Those who successfully navigate this transformation will thrive in the digital economy. Those that continue treating data as a compliance afterthought risk obsolescence in a world where information and innovation, not interest rates, drive competitive advantage.

The revolution is already underway. The question isn’t whether banking will become data-centric; it’s whether your institution will lead or follow in this fundamental transformation.

About the Author:

Adam Ennamli is the Global Head of Operational Risk at Deel, overseeing the build of strategic capabilities in resiliency, third-party risk and product governance. He previously served as the Chief Risk, Compliance & Security Officer at General Bank of Canada, where he led enterprise-wide information security programs. Drawing on 15 years of leadership experience across global financial and technology institutions including Morgan Stanley, Thomson Reuters, and the National Bank of Canada, he specializes in transforming risk management and compliance frameworks.

A recognized expert in enterprise trust, Adam has pioneered innovative approaches to cybersecurity, sustainability, and regulatory compliance that directly impact strategic growth. His MBA from HEC Montreal underpins his integrated approach to risk management, security, and operational resilience. Under his leadership, organizations have consistently achieved industry-leading risk management capabilities and compliance standards.

Adam contributes actively to industry dialogue as a member of the Forbes Technology Council and the Virtual Advisory Board, providing thought leadership on emerging risk management challenges and technology governance.