Commercial Banks

The 4,118 commercial banks in the US earn money by lending money at higher interest rates than the interest they pay to depositors. They may also earn money from fees and interest on credit card services, returns on investments in securities, fees for investment services, fees for treasury management services, and other account fees.

Fintech Competition Forces Innovation

Banks are seeing new competition from fintech start-ups, which have received tens of billions of dollars in venture capital funding over the past five years.

Regulatory Compliance Costs

The banking industry is highly regulated and regulations increased significantly following the financial crisis of 2008.

Sep 9, 2026 - AI Personalization Could Deepen Bank Customer Relationships

• US banks are looking to AI to make digital banking more personal as customers spread their financial business among banks, fintechs, and other providers. Consulting firm McKinsey says banks can use transaction histories, digital activity, and other customer data to anticipate needs and deliver more relevant offers, reminders, and financial guidance rather than relying on generic marketing. The potential payoff is significant: McKinsey has found that banks executing AI-powered personalization well can improve customer engagement by 20% to 30%, customer value by 10% to 25%, and customer experience by 15% to 25%. Generative AI can also speed marketing-content production by 15% to 20% and improve click-to-lead conversion rates by as much as 25%. The US banking industry has the opportunity to use the customer data they already hold to deepen relationships before fintechs and AI-powered financial platforms capture more of that business.
• Average hourly wages for nonsupervisory employees at commercial banks reached $33.62 in June, up 4.9% from a year earlier, according to the Bureau of Labor Statistics. Wage growth in banking has consistently outpaced the broader private sector, rising 64.2% over the past decade compared with 50.3% for all private nonsupervisory workers. Banks continue to compete for experienced commercial lenders, compliance professionals, cybersecurity specialists, and digital banking talent as regulatory requirements and fraud threats grow. At the same time, many institutions are reducing overall headcounts through branch consolidation and automation, shifting their workforce toward higher-skilled, higher-paid positions. That combination of strong demand for specialized talent and a leaner workforce has helped keep bank wage growth well above the private-sector average.
• The US banking industry is increasingly positioning tokenized deposits as the industry’s answer to the rise of stablecoins and digital payments. Instead of ceding customer balances and payment flows to crypto firms or fintech-issued stablecoins, banks are developing blockchain-based versions of traditional deposits that keep funds within the regulated banking system while enabling faster settlement, programmable transactions, and round-the-clock money movement. Large banks are already testing tokenized deposit platforms for corporate treasury operations, interbank transfers, and cross-border payments, while regulators and industry groups are working to distinguish tokenized deposits from privately issued stablecoins in upcoming regulatory frameworks. The push reflects a broader strategy across banking: adopt the efficiency of blockchain infrastructure without surrendering control of deposits, payments, or customer relationships.
• Proposed changes to US bank capital rules could deepen the financial ties between banks and private credit firms. Currently, banks can treat loans made to private lenders as lower-risk than direct loans to businesses, making it more profitable to lend to a private credit fund than to a company directly. Harvard Business School estimated that a direct loan to a mid-sized company might generate a 13% return on equity for a bank, compared to 24% for a private credit fund making a loan. The proposals would make this favorable treatment even stronger by lowering the minimum risk weighting from 20% to 15%. Rather than pushing banks to compete more directly with private lenders, the rule changes could reinforce their interdependence. According to the Federal Reserve, loans to non-bank financial institutions already make up about 14% of total US bank lending, and that share could grow further if the proposals pass.

Industry size & Structure

The average commercial bank has about 340 employees and generates $140 million in annual revenue.

• There are about 4,118 FDIC-insured commercial banks in the US. FDIC-insured banks have around 1.4 million employees and generate more than $574 billion in annual revenue.
• There are 13 FDIC-insured commercial banks with over $250 billion in assets. These banks are defined as systemically important financial institutions (SIFI) under the revisions to the Dodd-Frank Act and are subject to more stringent regulation.
• The largest US commercial banks by assets are JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, US Bancorp, TD Group US Holdings, and PNC Financial Services Group.