In the fast-moving world of banking and fintech, traditional banks face immense pressure to evolve. While digital-native fintechs have disrupted the industry with speed, agility, and customer-centric innovation, some legacy banks have successfully navigated the shift to digital banking, proving that incumbents can remain competitive in a rapidly changing landscape.

One such example is Akbank, a 77-year-old institution that has reinvented itself as a leader in digital banking. Through strategic fintech collaborations, AI adoption, and a customer-first approach, Akbank has reshaped its operations, modernized its infrastructure, and redefined financial services in Turkey.

This article explores how incumbent banks can successfully manage the shift to digital banking, the challenges they face, and the future of AI-powered banking in an increasingly digital world.

The Role of Digitalization in Banking Growth

For many traditional banks, digital transformation has been slow. Legacy infrastructure, regulatory barriers, and cultural resistance have often made it difficult for incumbents to keep pace with fintech disruptors.

However, Akbank’s journey tells a different story. The bank has grown at a rate that mirrors fintech startups, increasing its active customer base by 70% in just three years.

Key Statistics on Akbank’s Digital Growth

• Two out of three new customers are acquired digitally.
• 96% of financial transactions are now handled via its mobile banking app.
• 60-70% of credit cards are sold digitally.
• 90% of personal loans are processed online.

These numbers highlight an important shift: incumbent banks can thrive in the digital age if they embrace change.

The Shift from Legacy Banking to a Digital-First Model

For Akbank, going digital was not just about launching an app. It required a complete restructuring of banking processes, technology, and culture.

1. A Digital-First Customer Experience

Akbank redesigned its banking experience from the ground up, ensuring that every interaction—from onboarding to complex financial transactions—could be done online.

Example: The bank now offers a mobile-first onboarding experience, making it easier for customers to open accounts without visiting a branch.

2. Moving Beyond Traditional Banking Services

Modern banking is no longer just about savings accounts and loans. Customers expect seamless, value-added services integrated into their financial journey.

Akbank has incorporated:

• Buy Now, Pay Later (BNPL) solutions
• Salary advance programs
• Real-time debit card controls
• AI-driven financial insights

These services mirror fintech offerings, giving customers access to innovative financial solutions within a traditional bank.

The Power of Fintech Collaboration

Rather than competing with fintechs, Akbank took a collaborative approach. Through its Akbank Lab, the bank has established partnerships with over 1,000 fintech and tech startups globally.

Why Fintech Collaboration Works

• Accelerates innovation – Instead of building everything in-house, fintech partnerships help banks introduce new services faster.
• Reduces development costs – Proof of concept (POC) testing allows banks to validate fintech solutions before full deployment.
• Enhances customer experience – Fintechs bring expertise in AI, automation, and behavioral finance, improving the quality of financial services.

Successful Fintech Partnerships at Akbank

AI-Powered Financial Insights

• Akbank collaborated with a fintech firm to develop an AI-driven financial coaching system.
• This system provides hyper-personalized insights to customers, offering real-time budgeting and spending recommendations.

SME Financial Management Tools

• A partnership with a Spanish fintech led to the development of a business financial management tool.
• SMEs can now manage cash flow, invoices, and financial planning through Akbank’s mobile platform.

These partnerships demonstrate how incumbent banks can leverage fintech expertise to enhance their own offerings.

How AI is Reshaping Banking Operations

Artificial intelligence (AI) is at the core of the shift to digital banking. Akbank has invested in AI across multiple banking functions, including:

1. AI-Driven Customer Engagement

• Conversational AI and chatbots are enhancing customer support.
• Machine learning algorithms analyze customer data to provide personalized recommendations.

2. AI for Fraud Prevention

• AI is used to detect fraudulent transactions in real-time.
• Risk scoring models help prevent unauthorized financial activities.

3. AI-Powered Banking Operations

• Akbank is exploring generative AI to automate back-office functions.
• AI is improving lending decisions by analyzing customer behavior and repayment history.

As AI continues to evolve, banks that integrate it effectively will have a significant competitive advantage.

Shift to Digital Banking: What Comes Next?

Akbank’s transformation is far from over. Over the next 3-5 years, the bank aims to:

• Scale AI adoption to enhance customer experience and operational efficiency.
• Expand fintech partnerships to introduce more innovative financial products.
• Further reduce branch dependency while maintaining high-value customer touchpoints.

The Decline of Physical Branches

A key takeaway from Akbank’s digital transformation is the reduction of physical branch reliance.

• The bank has already reduced its branch network by over 30%.
• Cash transactions have been removed from branches, pushing customers toward digital alternatives.
• The shift has retrained bank employees to focus on sales and financial consulting instead of routine transactions.

This aligns with global trends where traditional bank branches are becoming advisory centers rather than transaction hubs.

Learnings: Shift to Digital Banking

Akbank’s journey serves as a blueprint for other incumbent banks looking to embrace digital transformation.

• Customer Experience Must Be Digital-First – Banks must prioritize seamless digital onboarding, transactions, and customer engagement.
• Fintech Collaboration is Key – Partnering with fintechs accelerates innovation and reduces time-to-market for new services.
• AI is the Future of Banking – AI will enhance personalization, security, and operational efficiency in financial services.
• Branches Will Continue to Evolve – Physical banking will focus more on advisory services rather than cash handling.

For banks willing to invest in technology, culture, and customer experience, the future of digital banking offers limitless possibilities.