Banking - InSight Analysis - Belgium

Belgian banking is undergoing a dynamic transformation, driven by strong financial performance, rapid digitalization, and evolving customer expectations. As banks adapt to a changing landscape, they are investing heavily in AI, core banking modernization, and cybersecurity to remain competitive and compliant with rapidly evolving regulations. This SITSI report provides a comprehensive overview of the strategic priorities, technological innovations, and regulatory challenges shaping the future of banking in Belgium.

Strong Financial Performance and Market Resilience

In 2024, Belgium’s six largest banks posted a combined net profit of approximately €9 billion, with an average return on equity (ROE) of 12%. This robust performance was fueled by:

• Stable interest income
• Diversified revenue streams
• Low credit losses

Despite narrowing interest margins and moderate credit growth, the sector is expected to remain resilient throughout 2025, supported by solid capital and liquidity positions.

Structural Shifts in Belgian Banking

The Belgian banking sector is experiencing a significant shift from physical to digital services:

• The number of banks declined from ~110 in 2010 to 80 in 2025
• BNP Paribas Fortis closed 160 branches, redirecting customers to 657 post offices
• ATM availability is shrinking, raising concerns for digitally excluded populations

Consumer advocacy groups such as Testaankoop and Okra are lobbying to preserve face-to-face banking, especially for older generations who may struggle with digital platforms.

AI in Banking: Driving Efficiency and Innovation

AI in banking is a strategic enabler for Belgian financial institutions:

• KBC’s chatbot Kate uses GenAI to assist customers and employees with personalized services
• ING Belgium automates lending and streamlines operations using AI
• Belfius applies AI for fraud detection and collaborates with Proximus NXT to enhance cybersecurity and connectivity

Banks are aligning with EU regulations, such as DORA and the AI Act, while deploying governance frameworks and training programs to maximize the value of AI technologies.

Cybersecurity and Digital Resilience

As digital banking expands, so does the need for robust cybersecurity:

• Banks are adopting zero trust security models and secure-by-design development practices
• AI-driven threat detection tools like Microsoft Sentinel are being integrated into banking infrastructure
• Dynatrace provides real-time observability and ensures PSD2 compliance for KBC

Top cybersecurity providers in Belgium include Proximus NXT (with >10% market share), NTT Data, Orange Business, Cegeka, and Atos.

Core Banking Modernization and Hybrid IT Strategies

Modernizing core banking systems is essential for agility and customer satisfaction:

• Keytrade Bank and Argenta Bank leverage cloud-based platforms for faster service delivery
• Euroclear Bank uses TCS BaNCS, a modular, cloud-native core banking suite
• Belfius invests in IBM z16 mainframes and Watsonx for high-speed processing and AI insights
• KBC expands internal mainframe expertise to modernize legacy systems

Local IT provider NRB is scaling its mainframe services to support underserved financial institutions, addressing gaps left by larger providers.

Customer Experience and Embedded Finance

Improving customer experience is central to digital transformation strategies:

• Argenta Bank uses Salesforce Financial Services Cloud for personalized CRM
• KBC targets 65% digital sales and 68% straight-through processing by 2026
• BNP Paribas Fortis partners with Worldline for issuing services across POS (Points of Sale), e-commerce, and mobile platforms

Embedded finance is gaining momentum, integrating financial services into digital ecosystems and expanding the role of non-bank financial intermediation.

Key Takeaways
1. Belgian banking remains financially strong but faces structural and technological shifts
2. AI in banking, core banking modernization, and cybersecurity are top investment areas
3. Talent shortages and customer expectations are driving innovation and partnerships
4. Regulatory compliance and ESG goals are influencing infrastructure and strategy