According to a report by S&P Global Ratings, global banks are at a critical juncture as they navigate the challenges posed by digitalization and artificial intelligence (AI). The report indicates that these evolving risks could pressure some banks' business models and risk management practices, while also presenting opportunities for others. It forecasts a rise in credit losses, particularly in the Asia-Pacific region, driven by uncertainties affecting lending. Despite this, the report suggests that strong profitability and regulatory frameworks will help keep these losses manageable. Additionally, the report emphasizes that AI adoption will be crucial for competitive advantage, although it introduces new technical risks and reliance on third-party vendors. Overall, the banking sector is poised for significant shifts as it adapts to these challenges.