Regulatory enforcement may have eased, but banks still face multifaceted complexity and strategic challenges

A landscape defined by technological promise, regulatory divergence and shifting expectations is compelling banks to rethink their business models, strengthen resilience and adapt their strategies for long-term success, says a new report from Herbert Smith Freehills Kramer.

The ninth annual Global Bank Review, called ‘Innovating amid Turbulence’, explores how banks and financial institutions are adapting to these challenges and seizing new opportunities. It also highlights how banks are embedding sustainability into operations, leveraging digital assets and AI, and reimagining technology and workplaces to stay competitive.

Key issues examined in the 2025 Global Bank Review include:

• Complexity as the new normal: from geopolitical instability and regulatory divergence to the relentless pace of technological advancement and evolving societal demands, banks are operating in an environment where change is the only constant
• Embedding AI intelligently: investment in AI and digital tools continues apace, but legacy systems and organisational complexity still present significant hurdles
• Geopolitical and regulatory fragmentation: reassessment of cross-border operations and how to adapt to fractious geopolitics and divergent regulatory frameworks is front and centre of financial institutions’ current thinking
• Sustainability steers success: despite political pushback and regulatory shifts, sustainability remains central to the banking agenda. Banks are embedding sustainability into risk management, governance and capital allocation, and highlighting the importance of credible, globally consistent standards
• Stability of stablecoins: as digital assets reshape finance, the strategic choices facing banks as they consider entering this fast-evolving market are considered.

Simon Clarke, partner and London-based co-head of HSF Kramer’s banks sector group, says: “Over the past year one truth has become unmistakably clear for the banking industry: managing complexity is no longer a passing phase – it is the air the modern bank must breathe. Whether it stems from geopolitical instability, the relentless pace of technology or the pressure to create sustainability-focused investments, success now depends on clarity, resilience and the courage to adapt. Those banks and financial institutions which are adept at managing change will be the ones to thrive in the prevailing turbulent atmosphere.”

Peter Jones, partner and Sydney-based co-head of HSF Kramer’s banks sector group, adds: “Banks are being tested on every front – from fragmented regulation to rising societal expectations. The winners will be those that turn complexity into a catalyst for innovation. At the same time, with private credit and digital assets expanding and evolving, many at speed, new questions about risk are being asked. Time must be spent providing robust answers, but banks must stay agile to capture opportunity without compromising resilience.”

The 2025 Global Bank Review can be accessed here. It will also form the basis of a new podcast series in which the transformative impact of generative AI on wealth management will be discussed, highlighting both the opportunities for personalisation and the regulatory and operational risks that must be managed.