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. [1] 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. [1] 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. [5][4] 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. [2][5] 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. [3][6] For instance, in the U.S., non-bank lenders financed about 85% of leveraged buyouts in 2024, up sharply from previous years. [3] At the same time, banks like Goldman Sachs have responded by creating or expanding teams specifically focused on private credit and mega-deal financing. [6]

In terms of strategy, legacy banks are facing headwinds from “attacker firms” that require rethinking around scale, speed, client interface, and technology deployment. [1] 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. [1][2] Those banks that are able to leap and adapt stand to improve profitability by 20–30% from current baselines. [1]

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%. [3] 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. [3][7] 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?