Huntington Bancshares Incorporated (HBAN): 5 FORCES Analysis [Nov-2025 Updated]

You're trying to map out Huntington Bancshares Incorporated's competitive footing right now, in late 2025, and the picture is definitely complex; we're seeing high supplier power from core tech vendors clashing with low switching costs for retail depositors. While the bank is aggressively gaining share-evidenced by that 9% average total loan growth in Q3 2025-the pressure from fintech substitutes and rivalry with super-regionals is intense. To see exactly how these forces shape their strategy, from managing tech spend to defending market share after the Veritex entry, keep reading the detailed breakdown.

Huntington Bancshares Incorporated (HBAN) - Porter's Five Forces: Bargaining power of suppliers

You're looking at the vendors that provide the digital backbone for Huntington Bancshares Incorporated, and honestly, the power dynamic here leans toward the supplier, especially for foundational systems. Core banking technology providers hold significant leverage because replacing these systems is a massive undertaking, often involving multi-year, costly contracts. While I don't have the exact dollar value of Huntington Bancshares Incorporated's current core system contract, the industry standard suggests these agreements lock in a bank of their size-managing $223 billion in assets as of late 2025-for a decade or more.

The stickiness is real; switching costs for legacy IT systems are prohibitive. You are dealing with deep integration across the entire operation, from compliance reporting to customer-facing applications. Huntington Bancshares Incorporated acknowledges this risk, noting in their filings that they rely on third-party service providers to leverage subject matter expertise and industry best practice, which inherently raises the barrier to exit for any given vendor.

However, the landscape is shifting as Huntington Bancshares Incorporated actively tries to manage this power through strategic partnerships and internal development. They are clearly diversifying their dependency, particularly in high-growth areas like artificial intelligence (AI). For generative AI deployment, Huntington Bancshares Incorporated relies on tech partners like the major cloud providers-Google Cloud, Amazon Web Services, and Microsoft Azure-about 80% of the time, while their programmers create bespoke models the other 20% of the time. This internal capability development is a direct countermeasure to supplier dominance.

Here's a quick look at the scale and focus areas influencing these supplier relationships:

Specialized fintech vendors for payments and AI are definitely gaining leverage, forcing Huntington Bancshares Incorporated to engage with them either as partners or acquisition targets. You saw them acquire the payments fintech Torana to enhance digital payment capabilities, though the financial terms were undisclosed. This move shows they are willing to buy capabilities rather than just contract for them, which changes the negotiation dynamic.

To mitigate reliance on traditional, high-power vendors, Huntington Bancshares Incorporated is actively building internal innovation engines. The launch of the corporate venture studio with Alloy Partners, building on a 2024 relationship, is a prime example. This studio is designed to co-create new ventures, particularly in payments and wealth management, effectively bringing startup agility and new technology sourcing inside their ecosystem. This effort is about embedding innovation deep into the DNA of Huntington Bancshares Incorporated's growth story.

The strategic moves Huntington Bancshares Incorporated is making to manage supplier power include:

• Launching a corporate venture studio with Alloy Partners.
• Focusing co-creation on high-impact areas like payments.
• Acquiring specialized fintech capabilities, like Torana.
• Developing internal bespoke AI models for 20% of needs.
• Partnering with major cloud providers for infrastructure.

If onboarding new specialized solutions takes longer than expected, the bank risks delaying the projected 10%-15% cost reduction and revenue lift from AI initiatives. Finance: draft a risk assessment matrix for the top five core technology vendors by next Tuesday.

Huntington Bancshares Incorporated (HBAN) - Porter's Five Forces: Bargaining power of customers

You're looking at how much sway your average client has over Huntington Bancshares Incorporated's pricing and service terms. For the retail segment, the power is definitely on the customer's side, honestly. Switching costs for basic checking and savings accounts are low; if you see a better Annual Percentage Yield (APY) elsewhere, moving your funds is just a few clicks away in today's digital environment.

Still, the power dynamic shifts quite a bit as you move up the client ladder. Commercial and middle-market customers are stickier. This stickiness comes from the deep integration of services-lending, treasury, cash management-and Huntington Bancshares Incorporated's long-standing local relationship model. They aren't just moving a checking account; they are untangling a whole suite of operational tools. To counter the low-cost retail threat, Huntington Bancshares Incorporated has been investing in its human capital, adding approximately 80 new customer-facing bankers across new regions like Texas in 2024 to deepen those relationships.

Large corporate clients, on the other hand, wield significant power by demanding best-in-class technology. They need platforms that integrate seamlessly with their own Enterprise Resource Planning (ERP) systems. Huntington Bancshares Incorporated responded to this by launching its Treasury Management Connectivity Ecosystem on October 23, 2025. This platform is designed to handle the complexity these clients face, especially concerning data quality, which a recent white paper showed 76% of finance professionals struggle with.

The overall strength of customer retention, particularly on the deposit side, suggests moderate success in managing this bargaining power. Deposit growth is forecast at 5.5% for full-year 2025, inclusive of the Veritex acquisition, showing that while customers have options, a solid base remains committed to Huntington Bancshares Incorporated. This is set against a backdrop where Huntington Bancshares Incorporated's total assets are around $223 billion post-merger.

Here's a quick look at how customer power manifests across the main segments:

The new treasury platform offers concrete features designed to increase the cost of switching for commercial users by embedding banking directly into their operations. You can see the level of sophistication they are bringing to bear:

• Offers over 500 interfaces for system integration.
• Provides actionable cash visibility and payment automation.
• Delivers AI-enabled transactional data for predictive forecasting.
• Reduces manual processes that 76% of finance pros struggle with.

If onboarding for a new treasury system takes 14+ days, churn risk rises, so speed here is key to locking in those larger clients.

Huntington Bancshares Incorporated (HBAN) - Porter's Five Forces: Competitive rivalry

The competitive rivalry facing Huntington Bancshares Incorporated is definitely intense, stemming from both established super-regional peers and the rapid pace of digital transformation. You are operating in a space where scale and technological differentiation are key battlegrounds.

Huntington Bancshares Incorporated is actively pushing for market share against rivals like Citizens Financial Group and Regions Financial Corporation. The data from the third quarter of 2025 clearly shows Huntington taking an aggressive stance. While the broader peer group saw only a cumulative loan growth of 0.8%, Huntington Bancshares Incorporated posted cumulative loan growth of 7.9%. This drive is reflected in the year-over-year figures, with average total loans and leases increasing by 9% as of Q3 2025.

This rivalry is not just about organic growth; it is being reshaped by inorganic moves designed to secure future growth engines. The strategic combination with Veritex Holdings, which closed on October 20, 2025, was a direct move to heighten this rivalry by establishing a stronger footing in Texas. This all-stock transaction was valued at approximately $1.9 billion. The immediate impact is significant:

The move into Texas is designed to make Huntington the fifth-largest bank in Dallas by deposits. Furthermore, management expects the integration to yield about $20 million in core pre-provision net revenue benefits in the fourth quarter of 2025 alone.

The nature of competition is shifting rapidly toward the customer interface. To stay relevant against both large national banks and nimble fintechs, investment in digital capabilities is non-negotiable. Core regional banks, including Huntington Bancshares Incorporated, are reportedly leading peers in the initial adoption stages of generative AI. You need to ensure your digital offerings are competitive, as consumers expect seamless, mobile-first experiences. For Huntington Bancshares Incorporated, specific digital features like built-in budgeting tools within the mobile app are part of the offering to deepen customer engagement.

When looking at the immediate peer landscape, you see different competitive strategies at play:

• Citizens Financial Group (CFG) is showing strong momentum with a 27.5% three-month total return and a 32.8% shareholder yield.
• Regions Financial Corporation is being viewed by some analysts as the safety pick, boasting the highest Pro Score among the peer group analyzed.
• Huntington Bancshares Incorporated is positioning itself as the growth engine, evidenced by its 9% year-over-year loan growth, outpacing the peer median of 0.8%.

The pressure is on to convert digital investment into tangible customer acquisition and retention, especially as the industry sees AI as the next major wave of digital transformation.

Huntington Bancshares Incorporated (HBAN) - Porter's Five Forces: Threat of substitutes

You're looking at how external financial products chip away at Huntington Bancshares Incorporated's core business, and honestly, the pressure is coming from everywhere. The threat of substitutes is significant because capital is fungible, and customers are increasingly willing to move funds for better yield or convenience.

Non-Traditional Lenders and Middle-Market Funding

Non-traditional lenders, primarily private credit funds, are aggressively capturing market share in the middle market, which directly competes with Huntington Bancshares Incorporated's commercial lending segments. PitchBook data shows private credit's market share in middle-market lending grew to 35% in 2023, and this trend is projected to hit 40% by 2025. This suggests that the intent to fund deals outside of traditional banks is substantial, possibly nearing the 25% figure you mentioned for funding intent.

These non-bank players offer structures banks often can't or won't, like covenant-lite loans. For instance, 70% of private credit loans in 2024 were covenant-lite, versus just 20% of bank-led syndicated loans. If Huntington Bancshares Incorporated is competing for the same corporate clients, this flexibility is a major substitute offering.

Here are some key competitive metrics in this space:

Money Market Funds and Brokerages as Deposit Substitutes

When interest rates are higher, money market funds (MMFs) and brokerages become highly attractive substitutes for bank deposits, especially for corporate and high-net-worth clients. MMFs offer faster passthrough of rising interest rates compared to bank deposit rates, which tend to adjust more slowly. From early 2022 to mid-2024, MMFs saw cumulative inflows while bank deposits declined amid policy rate hikes. In the U.S., total MMF assets reached $7 trillion in 2024. This dynamic means Huntington Bancshares Incorporated must price its deposits aggressively to retain core funding.

The spread between MMF yields and deposit rates was a key driver. In early 2024, the spread between MMF yields and deposit rates was more than 2 percentage points. If policy rates remain elevated, this pressure on deposit betas (the degree to which deposit rates move with the federal funds rate) defintely continues.

Consider the yield competition:

• Top Money Market Account APY (November 2025): As high as 4.25%.
• Traditional Bank Deposit Rate Increase Pace: Lagged policy rate increases in past cycles.
• MMF Investment Strategy: Diversifies counterparty risk across many issuers.
• Bank Deposit Risk: Exposure to a single counterparty (the bank).

Fintechs, Neobanks, and Specialized Products

Fintechs and neobanks are substituting for traditional bank services by offering specialized products with lower fee structures, particularly in payments and basic lending. The global neobanking market was valued at $143.29 billion in 2024, with projections to reach $3,406.47 billion by 2032, growing at a CAGR of 48.9% (2025-2032). This rapid growth signals a major shift in customer preference for digital-first experiences.

For example, a major UK neobank reported a 72% surge in revenues in 2024, growing its customer base by 38% to 52.5 million users that year. These competitors leverage AI and machine learning to enhance fraud protection and assess lending risk, offering streamlined experiences that challenge the traditional bank model. If onboarding for Huntington Bancshares Incorporated takes 14+ days, churn risk rises as customers expect instant approvals from digital rivals.

Wealth Management Firms and Robo-Advisors

In wealth management, automated platforms substitute for the comprehensive services of traditional advisors, primarily through a lower cost structure. Traditional financial advisors at large firms typically charge annual fees between 0.8% and 1.2% of assets under management (AUM). Conversely, robo-advisors generally charge between 0.25% and 0.50% of AUM.

While robo-advisor assets were between $634 billion and $754 billion in 2024, this is still a fraction of the $36.8 trillion US retail market. However, the lower cost is a powerful substitute for investors with straightforward goals. For a $100,000 portfolio, the fee difference is $1,000 annually for a traditional advisor versus just $250 for a robo-advisor. This cost differential is a clear incentive for substitution.

Here's a fee comparison for advisory services:

Finance: draft 13-week cash view by Friday.

Huntington Bancshares Incorporated (HBAN) - Porter's Five Forces: Threat of new entrants

The threat of new entrants for Huntington Bancshares Incorporated remains a structural consideration, though the barriers to entry are formidable, especially for full-service competitors. New players must contend with a highly regulated environment and the sheer scale required to compete effectively against established institutions.

Regulatory Barriers are High, Requiring Significant Capital

You know that starting a bank isn't like launching a software company; the regulatory moat is deep. For Huntington Bancshares Incorporated, its capital position provides a buffer against smaller, less capitalized challengers. As of September 30, 2025, Huntington Bancshares Incorporated reported a Common Equity Tier 1 (CET1) risk-based capital ratio of 10.6%. This is well above the minimum CET1 capital ratio requirement of 4.5% set for large banks. New entrants, particularly those aiming for scale, must meet these stringent capital standards from day one, which requires massive upfront investment. Furthermore, recent regulatory final rules, though taking effect in April 2026, signal continued regulatory focus on capital adequacy, keeping the bar high for any aspiring challenger bank seeking full charter status.

The capital requirements for new entrants can be summarized against Huntington Bancshares Incorporated's current standing:

Massive Scale and Trust Hurdles Post-Turmoil

New entrants must also overcome hurdles related to scale and, critically, trust, which was severely tested by the 2023 banking turmoil. While public confidence in the stability of regional banks has begun to recover in 2024 and 2025, non-customers still exhibit persistently lower trust levels. This lingering skepticism means that a new, unproven entity has a harder time convincing depositors to shift their primary relationship. You see this reflected in customer behavior; even in early 2024, 13% of customers indicated they were likely to change their primary banks in the next year. For Huntington Bancshares Incorporated, its long operating history, which dates back to 1866, provides a counterweight to this trust deficit, something a startup simply cannot buy.

The scale advantage is evident in market activity:

• US neobank user base hit 39 million in 2025.
• Top US neobanks reported combined revenue of $4.8 billion in 2025.
• Huntington Bancshares Incorporated reported average total deposits increased 5% year-over-year as of Q3 2025.

Digital-Only Banks: The Primary New Entrants

The most significant competitive pressure comes from digital-only banks, or neobanks, which effectively bypass the massive fixed cost of maintaining a physical branch network. These players are growing rapidly, focusing on superior digital user experience. The US neobanking market is projected to grow at a Compound Annual Growth Rate (CAGR) of 27.31% between 2025 and 2032, or 34.6% through 2026. They are chipping away at the consumer segment, which is highly sensitive to fees and convenience.

The growth trajectory of these digital competitors is steep:

• US neobanking market projected CAGR (2025-2032): 27.31%.
• US neobanking market projected value by 2032: USD 3,02,025.3 million.
• Neobanks are increasingly serving as catalysts for financial inclusion, reaching both urban and rural populations.

High Customer Acquisition Costs in a Saturated Market

Despite the digital efficiency, new entrants still face a major financial hurdle: customer acquisition cost (CAC). In a saturated market, the cost to gain a customer who will actually fund an account and stay is high. For general fintechs, the midpoint CAC was reported at $1,450 per customer in early 2025. While digital banks are cheaper than traditional retail banks (which average around $561 per consumer customer), the cost is still significant, and 76% of neobanks remained unprofitable in 2025, largely due to these high acquisition expenses. Digital acquisition is about 44% less expensive than non-digital methods, but the competition for digital mindshare is fierce.

Here's how CAC benchmarks compare, showing the relative cost advantage of established players like Huntington Bancshares Incorporated:

If onboarding takes 14+ days, churn risk rises. Finance: draft 13-week cash view by Friday.