Investors in the international banking sector would be well advised to keep informed, as many banks are reinventing themselves to keep up with a changing marketplace. While most, according to Fitch Ratings, continue to carry a stable outlook for the year to come, much depends on how well their efforts succeed. And the outlook for European banks in developed markets is “still negative,” according to the ratings agency.

David Weinfurter, global head, financial institutions at Fitch, said in the agency’s “Financial Institutions 2014 Outlook Compendium” that “below-trend economic growth in some markets, legacy asset quality issues, occasional sizeable legal and regulatory charges, and a shifting regulatory landscape all weigh on banks.” But there is a bright spot as banks take actions to cope with shifting demands: “[E]conomic growth—even if only modest—feeds incremental demand for credit and helps asset quality, while restructurings and business model refinements support improved fundamentals.”

While Weinfurter said the majority of country and sector ratings remain stable, challenges such as “ongoing regulatory change, central bank actions on rates and tapering, and selected emerging-market volatility” remain. Challenges notwithstanding, “we expect banks around the world to broadly continue improving capitalization, enhancing liquidity, managing leverage and addressing profitability.”

That’s not to say that the road ahead will be smooth. Fitch also broadly characterized the 2014 outlook for the 12 global trading and universal banks (GTUBS) as “Regulation, Resolution and Returns.” The 12 banks are Bank of America, Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs Group, HSBC Holdings, JPMorgan Chase, Morgan Stanley, Société Générale and UBS AG.

Here’s a look at how some of those challenges are playing out.

Royal Bank of Scotland, which in 2008 got the biggest bank bailout in history, racked up its largest loss since that bailout—9 billion pounds ($15 billion)—for 2013. It also handed out some 576 million pounds in bonuses for 2013. While down from 679 million pounds for 2012, those bonuses were plenty high enough to draw government reprimands.

RBS’s stock unsurprisingly fell after news of the loss. It has remained low since the bailout, preventing the British government from reducing the size of its 80% stake. The institution that CEO Ross McEwan characterized as “the least-trusted company in the least-trusted sector of the economy” still has a lot of suspicion to overcome in the marketplace.

McEwan, who took over from Stephen Hester last October, has gone further than Hester in reshaping the bank; Hester cut costs and reduced assets, but left before reducing the size of the investment bank at the government’s behest.

McEwan has tackled the investment bank, as well as combining units and shedding staff—with more staff cuts to come, perhaps as many as 30,000 altogether; that figure includes employees in units already on the auction block. When he’s done, the bank will have three units, down from seven. But even McEwan has said the bank could need another 3–5 years to fully recover. Analysts have said five years is more realistic.

Another factor that could influence the bank’s push toward recovery is Scotland’s forthcoming vote on independence. A yea vote could expose RBS to everything from changes in its credit rating to new regulatory requirements, as well as changing its position with regard to the European Union.

HSBC, meanwhile, has seen its own cost-cutting measures pay off, with profits expected to hit $24 billion—a nearly 20% increase for 2013—after slashing 40,000 jobs and selling or shuttering 60 businesses, among other actions, over the past three years.

Still, CEO Stuart Gulliver needs to boost income to replace lost revenues from sales of its credit card business in the U.S., half its U.S. branch network and income from Chinese insurer Ping An; the bank sold its stake in that last on slowing growth in Asia and needs to find a substitute to boost income.

HSBC also needs to comply with increased capital requirements for both global and U.K. requirements. It has cash set aside to pay potential settlements over mis-selling and foreign exchange trading, which could take a toll on revenues down the road.

Elsewhere in the U.K., London is planning on cozying up to China with the opening of a Yuan clearing bank, which Chancellor of the Exchequer George Osborne said should happen “in fairly short order.” The idea went public last November, but Osborne said in mid-February that talks were already underway, and that the U.K. will be hosting the first international renminbi conference this summer.

Not only would Britain would like to establish London as “the western center for renminbi trading,” Osborne said at a G20 meeting in Sydney, but the country would also like to expand its export business with China and other emerging market countries. A renminbi market would certainly facilitate those efforts.

The U.K., of course, isn’t the only country facing global banking challenges. Deutsche Bank is wary of new U.S. rules that are designed to protect taxpayers from bailouts and that require the setting up of an intermediate holding company subject to the same capital, liquidity and risk standards as U.S. banks.

As a result, the bank plans to cut its U.S.-based assets by $100 billion, transferring some global operations formerly under its U.S.-based business to other divisions. Among the units mentioned for reassignment were Mexican operations and its repo businesses based in Tokyo and in Frankfurt. Some U.S.-based operations will also be reassigned to Asia or Europe, and repo business within the U.S. will be cut as well.

U.S. regulations aren’t the only thorn in Deutsche Bank’s side. European regulations have it hoping for German regulatory approval for a plan to raise capital of up to 6 billion euros ($8.281 billion) in hybrid debt to boost its European leverage ratio.

One likely bright spot for European banks is the fact that George Soros has said he plans to invest in them. Still critical of austerity policies that he said have made the region’s financial crisis worse, he nonetheless “believe[s] in the euro” and said in late February that he intends to provide the cash that many European banks sorely need.

Chinese banks, meanwhile, are facing their own challenge, and it’s coming from the Internet: high-yield online products are giving the bricks-and-mortar banks a run for their money, literally, as they lure customers in search of better returns. Internet companies Alibaba, Baidu and Tencent, among others, have successfully enticed so many depositors away from conventional Chinese banks that deposits have fallen drastically—by 1 trillion Yuan ($162.672 billion) in January. Alibaba’s Yu’e Bao money market fund alone has accounted for 400 billion Yuan.

But the physical banks aren’t taking the competition lying down. Instead they’re launching their own products to compete, as well as pushing regulators to crack down on nonbank online products. Not only do the banks’ new products offer higher interest rates, they provide better liquidity to compete with the Internet products’ withdrawal-at-any-time flexibility. With China moving toward better deposit interest rates, however, banks will end up competing with one another as well as with online companies, with higher costs looming in the future.