How Non-Banks Are Disrupting CIB: Asia Leads Private Credit & Bank Strategy Shift

The Straits Times article, building on a McKinsey report, opens by highlighting that Asia now contributes about 43% of global CIB revenues, making it a key battleground for competition between banks and non-banks. Non-banking entities are not just nibbling around the edges but are entering some of the most profitable areas—market-making, securities trading, advisory, lending to underserved SMEs, foreign exchange, payments, and digital assets. This underscores a transformation in who captures economic value within the banking system.

Supporting those observations, a recent Boston Consulting Group (BCG) report projects that by 2030, non-bank financial institutions will generate more than one-fifth (>20%) of global CIB revenues and about 30% of trading activity. Over the same period, total CIB revenues are expected to grow by 20–35%, driven by geopolitical fragmentation, digital disruption, and demand for more agile capital. What this means: non-banks are not only growing; they are reshaping the revenue waterfall of corporate and investment banking. Traditional banks risk losing incremental revenue—and in some cases, established revenue streams.

One of the most striking non-bank trends involves private credit. As banks pull back due to regulatory constraints and risk concerns, private lenders are stepping in, offering faster, more customized, often covenant-lite financing, especially in the middle market. For instance, in the U.S., non-bank lenders financed about 85% of leveraged buyouts in 2024, up sharply from previous years. At the same time, banks like Goldman Sachs have responded by creating or expanding teams specifically focused on private credit and mega-deal financing.

In terms of strategy, legacy banks are facing headwinds from “attacker firms” that require rethinking around scale, speed, client interface, and technology deployment. The boardroom conversation is shifting towards operational flexibility, embedding scenario planning, deepening digital assets work, and scrutinizing traditional advantages like regulation compliance and capital base. Those banks that are able to leap and adapt stand to improve profitability by 20–30% from current baselines.

Regulatory and systemic risks are rising in tandem. Nonbank financial institutions have now amassed over half of the world’s financial assets as of 2024, growing nearly 10% annually, while banks trailed with asset growth of under 5%. The IMF and Financial Stability Board (FSB) have flagged increasing leverage, liquidity risk, opaque exposures, and the growing interconnections between banks and non-banks—particularly in private credit, funds, and real assets—as potential triggers for systemic stress. These developments increase both the upside potential and the risk horizon for CIB players.

Open questions and critical strategic issues include:

• Which regulatory paths will emerge globally to address NBFI risk without stifling innovation?
• How will traditional banks selectively partner with or acquire NBFIs versus building capabilities in-house?
• Can digital asset markets and fintechs sustain their momentum across cycles, especially under tighter interest rates or economic stress?
• How will customer loyalty shift, particularly among corporates and SMEs, as speed, convenience, and pricing take precedence?