Saxo Bank’s Chief Macro Strategist, John Hardy kicks off this year’s predictions in a short video interview with RBI editor Douglas Blakey.

For over 20 years, an annual highlight at this time of the year is the release of the Saxo Bank Outrageous Predictions. This year is no exception.

John Hardy has been at the bank and involved in the annual predictions since the series launched. The predictions are always fun-and one can always expect the unexpected.

There is one notable recurring theme over the years. The bank examines scenarios that could reshape the financial markets as we know them. They do not represent Saxo Bank’s official market forecasts but here is the serious bit. Each year, the predictions serve as courageous, thought provoking, reminders for investors to account for all possible outcomes-even those that appear unlikely. And take note: often it is the outrageous that moves the market.

This year, there are eight predictions and it is a safe bet that if they were to occur, they would send varying degrees if shockwaves across the financial markets.

“The Saxo Outrageous Predictions are not exactly news and not exactly real—at least not yet. While we don’t know which stories will drive the global economy in the coming year, our 2025 predictions, from Nvidia trouncing its Mag 7 peers to the fall of OPEC, from a bold bet on reflation in China to a great leap forward in biotech, are just as promised: outrageous,” says Hardy.

RBI 2025 forecasts (in alphabetical order by company name)

Vikram Malhotra, CEO & Co-founder, 360 ONE Global

In terms of market segment trends, one key trend in 2024 has been the strong growth of the wealth management sector in the Middle East with many private banks, asset managers, and IAMs investing and expanding in the region.

In another evolving trend throughout the year, wealth managers continued to invest in developing digital platforms to better connect with their next-gen clients and also service the entry-level high-net-worth (HNW) client segment more cost-efficiently. Steps have also been taken to integrate AI into advisory for efficiency gains initially with a larger ambition of providing customised advice at scale.

In 2024, we also saw numerous private banks and wealth managers expanding their offerings and propositions with an ESG focus. This is in response to a strong and ongoing trend of UHNW clients and family offices incorporating ESG into their overall philosophy and mandates. It is likely to gain further momentum with the ongoing inter-generational wealth transfer over the next several years.

One key trend in 2024 has been the continuing shortage of quality talent in Asia and Middle East. There has been a rise in demand for Relationship Managers (RMs) in these regions as many private banks are looking to grow their assets. With the entry of some new private banks in the Middle East market, the supply of quality talent has remained static, creating barriers to growth and straining cost-to-income ratios in the region.

Another key trend in 2024 has been the continued growth of the Independent Asset Management (IAM) sector, which has further exacerbated the talent shortage for traditional private banks. Private banks lost some high-performing RMs in 2024, who either set up their own or joined existing IAMs during the year.

Forecasts anticipated for 2025 in private banking

In terms of market sector trends, the Middle East should continue to experience strong growth and lead the league tables for the net inflow of HNW and UHNW families in 2025. This growth trend is likely to be sustained beyond 2025, as wealthy families and businesses are attracted by factors such as quality of life, personal safety, political stability, rapidly maturing financial infrastructure, and a compelling tax regime. The introduction of the Golden Visa and continuing liberalisation have been game changers in accelerating millionaire migration to the UAE. Further, factors such as adverse changes in the UK tax regime will continue to support these trends in 2025.

In terms of investment preference trends, we have already seen rapid growth in private clients’ interest in alternative assets. We expect this trend to accelerate during 2025 as private clients are more open to allocating (to alternatives) with the prospect of higher returns and more liquidity. On the other hand, alternative asset managers are investing in developing products more suited to private wealth clients and expanding wealth distribution channels to tap into the faster-growing private wealth pools. We expect wealth managers to expand their alternative product suites and recommend higher allocations to alternatives in their strategic asset allocation models during 2025 in response to these structural growth drivers.

We also expect wealth managers to increase their focus on the looming inter-generational wealth transfer in 2025. This will likely be a mix of strategies including organising next-gen events, further digitalising the wealth management journey, and incorporating younger RMs in coverage teams for large UHNW families facing imminent wealth transfers to build better connectivity with the next generation.

We expect the talent shortage challenge for traditional private banks and wealth managers to continue in 2025. Some firms have responded with initiatives such as graduate recruitment programmes to infuse and train fresh talent, and to hire from mass affluent and priority banking segments to beef up their ranks, which will continue in 2025.

We expect the trend of high-performing RMs to leave private banks and join institutional-grade IAMs to continue and accelerate in 2025. The entry of very well-established institutions such as ours, brings institutional credibility, quality, transparency, and governance standards to the IAM sector. We expect to be the key beneficiary of this trend in 2025 and beyond, including when the IAM sector undergoes inevitable consolidation with the rise in compliance factors and higher market volatility potentially putting pressure on the smaller IAMs.

Jay Blanford, CEO, Abrigo

Financial institutions will increasingly integrate automation and AI to address a combination of operational efficiency, risk management, and compliance challenges. With rising pressure from regulators, economic uncertainties, and complex fraud threats, banks and credit unions will deploy AI-driven solutions for enhanced monitoring, decision-making, and process optimisation.
AI will be instrumental in fraud detection, with advanced machine learning models helping to identify emerging fraud patterns, including AI-generated fraud schemes. Automation will also streamline compliance efforts, such as meeting CFPB 1071 reporting requirements, by simplifying data collection, analysis, and reporting workflows.

Risk management will see notable improvements through AI’s ability to predict loan performance and market changes, helping financial institutions better prepare for interest rate shifts and credit risks. AI-enhanced data analytics support deeper insights into loan portfolios, providing tools for precise pricing and portfolio management.

Institutions will increasingly utilise AI and automation to gain performance insights, improve customer experiences, fight fraud, and balance human involvement and the more efficient handling of manual, repetitive tasks.

Phillip Mortimer, CTO, Accelex

Since ChatGPT’s launch in 2022, AI interest has skyrocketed and financial institutions are increasingly exploring and implementing this technology. These firms are recognising AI’s transformative potential to enhance efficiency, generate valuable insights, and maintain a competitive edge. In private markets, for instance, AI adoption is accelerating manual processes through intelligent document acquisition and data extraction, significantly enhancing operational efficiency and improving portfolio transparency.

The UK has taken a proactive stance on AI. Its new AI safety platform for businesses is likely to be welcomed by firms that are keen to harness the technology but want to move forward cautiously. This initiative builds on the UK’s ongoing efforts to establish itself as a global AI safety leader, demonstrated by developments including hosting the world’s first AI Safety Summit last year and the recent launch of the FCA’s new AI Lab.

The rapid evolution of AI makes predictions difficult, but one thing is clear: the future will be increasingly shaped by generative AI models that exhibit broad intelligence and can adapt to a wide range of tasks. As the field continues to grow, so will the potential of this technology, shaping the world in ways beyond imagination.

Anish Kapoor, CEO, AccessPay

Change is a constant in payments and 2024 has been another busy year. As we move into 2025, the payments landscape will continue to be shaped by challenges and advancements.  

Fraud remains a major concern, with the latest data from UK Finance showing a 16% increase in cases in the first half of 2024 compared to the same period in 2023. On a positive note, total authorised push payment (APP) fraud losses are down, but more worryingly, non-personal losses to APP fraud have reached record highs. 

Account-name-checking services, such as the UK’s Confirmation of Payee (CoP) and the EU’s Verification of Payee (VoP), are gaining prominence in reducing fraud and errors. The EU’s VoP checks, mandated by the Instant Payments Regulation, will be a key focus for account servicing payment service providers (ASPSPs) in the region, with an aggressive implementation deadline of October 2025.  

Technological innovation is also driving change. We can expect a growth in generative AI Agents for use in several business functions, including finance. AI can also aid fraud prevention, but in many respects, it is a double-edged sword, as it can equally be exploited by criminals to create sophisticated scams. 

New mandatory data requirements for using CHAPs will also come into play in 2025. Following the migration to ISO 20022, Purpose of Payment Codes and Legal Entity Identifiers will be required for certain transactions in May 2025, and structured remittances will be introduced in November 2025. These changes are just the start. The shift to more granular payment data has flown under the radar outside financial services, but it will have implications for all corporates that use CHAPS. 

ISO 20022 and other technological advances pave the way for financial transformation, but many businesses struggle to understand the art of the possible. The launch of the National Payments Vision is to be welcomed and should help drive targeted transformation in the payments ecosystem.

Richard Albery, Head of Solution Consulting Banking Europe, ACI Worldwide

2025 will be a historic year for payments in Europe. The new instant payments mandate will transform the European payments landscape with faster, frictionless and more secure payments for consumers and businesses, and ultimately lead to innovation with the introduction of new user-friendly services.

However, 9 January is just the starting point for what will be a transformative year for European financial institutions. Until now, many banks have implemented tactical solutions for lowest cost of compliance. The big deadline and the game changing moment for European payments, however, will come in 10 months, on 9 October, when banks need to be able to send instant payments.

Most banks in Europe will have their work cut out to be ready for that date: They need to upgrade their IT systems and real-time infrastructure to make sure they can handle the expected migration of traditional credit transfer volume and organic increase driven by consumer convenience. They also need to ask themselves what services their consumer and corporate customers require and prepare accordingly, as offering the ability to send instant payments will become the new commercial imperative in Europe.

The new regulation is expected to drive instant payments volume across the SEPA region, including the 27 EU member states. According to ACI’s 2024 Prime Time for Real-Time report, instant payments are forecast to account for 13% of all electronic payments in Europe by 2028, up from 8% in 2023. However, a look at other regions around the globe reveals that Europe is still catching up. For example, in the Asia Pacific region, instant payments are expected to comprise 29% of all electronic payments by 2028 – in Latin America, that number grows to 50%, and in Africa, 57%.

Financial institutions and other stakeholders need to think of the new mandate beyond regulatory compliance and treat this as an opportunity to deliver value to consumers and businesses through domestic and cross border use cases.

Grace Yee, senior director of ethical innovation, Adobe

2025 will mark a pivotal shift as ethical innovation becomes a non-negotiable standard for companies developing generative AI models. Heightened public awareness and growing distrust will bring critical questions to the forefront: How are these generative AI models trained? Do they perpetuate harmful stereotypes or biases? Are they exacerbating or addressing societal inequalities?  In response, demand for greater transparency and accountability will intensify, pushing organisations to embed ethical considerations into the very foundation of their AI development process.

Those embracing ethical innovation will establish themselves as trusted leaders in a market increasingly defined by responsible AI practices and regulatory scrutiny. Models built on a foundation of accountability and transparency will gain a competitive edge, fostering citizen trust. Conversely, those who sideline ethics risk producing biased, substandard models, hemorrhaging trust and losing customers to tools that prioritise genuine commitment to ethical AI.

Ryan O’Holleran Head of Sales, Enterprise, Airwallex

Over the past year, or so, we’ve witnessed the emergence of an increasingly educated payments buyer who not only knows what they need their platforms to deliver now, but also into the future as they scale – so gone are the days where payments providers simply tell their merchant customers exactly what they need from a solution.

In the business-to-consumer relationship, it’s more typical that businesses are hyper-aware of listening to the customer, and in the next year, we’ll see payments providers take more guidance from their customers. Equally, payments providers will need to be more flexible, as merchant customer preferences are shifting and they will increasingly highlight the need to bring more services on platform.

Immy Spence, Head of EMEA Sales, Airwallex

As our own research shows that 76% of SMBs are willing to pay more for one-stop solutions that can be accessed through a single vendor, it’s clear that the bundling of services is here to stay.  For ambitious and progressive businesses looking to operationalise in new markets at pace, convenience remains king. Navigating multiple vendors can quickly create friction, but this is where fintechs bundling their solutions comes into play. Having a single point of contact that provides a range of services – whether that’s FX, multi-currency digital accounts, expense management or payouts – isn’t just convenient, it saves on crucial costs that can be reinvested back into the business to spur on growth.

We also know that fintechs provide the most diverse of offerings and can tailor these solutions to meet the specific and evolving needs of growing businesses. At the same time, with the innovative nature of fintech firms, these businesses can be confident that the solutions they procure are best in class and will give them a distinct competitive edge.

Jeff Bucher, Senior Product Strategy Manager, Alkami

Banks and credit unions must prioritise engaging with faster payments now, as transaction volumes continue to grow rapidly and the future of payments increasingly revolves around these systems. Getting an earlier start will allow financial institutions to build expertise in faster payments, avoiding the need to play catch-up later.

In particular, financial institutions should focus on both enabling ‘receive’ functionality and understanding varying account holder needs for ‘send’ use cases with FedNow and RTP—especially as FedNow adoption is expected to accelerate, opening up new use cases for ‘send.’ A good first step is implementing A2A Instant External Transfers for both payment rails. Partnering with experienced digital banking and payments providers will also ease the integration process for financial institutions and support a smooth rollout.
In 2025, fraud prevention will continue to be a pressing need for banks and credit unions, and will demand continuous monitoring and a strong emphasis on account holder education to combat social engineering scams and account takeovers.

Bentzi Aviv, Global Head of Fintech Solutions, Amdocs

Looking ahead to 2025, we’ll see AI play a pivotal role in product development and pricing by working as a co-pilot for financial institutions. By analysing market trends and customer behaviour, AI will enable managers to make more informed decisions and offer more personalised recommendations that better meet customer needs.

We’ve seen how personalisation transforms the customer experience. GenAI plays a pivotal role in this by extracting insights from vast data sets, enabling more informed, tailored product offerings — allowing banks to deliver the right products to customers at the right time. Banks that embrace innovation and tap into technologies like GenAI in the coming year are the ones that will really be able to seize the big opportunities ahead.

Potential game-changer for challenger banks

GenAI has the power to really elevate the customer experience with faster service and quicker response to questions. Amdocs found that in 2022, most businesses only analyse 5% of

conversation data, but in 2025, we’ll see banks leveraging GenAI to analyse much larger data sets. The results will be 24/7 support, completely reshaping the way banks interact with customers. For challenger banks, it’s also a game-changer for the upcoming year—they can launch AI-powered call centers instead of sticking to just digital channels.

GenAI isn’t something banking leaders will be able to ignore anymore, but as banks move forward, it’s just as important that they adopt it with AI readiness in mind to get it right. AI-ready data is the essential first step, meaning you have a single source of truth—free from contradictions or duplicate information siloed in different systems—and have migrated it to the cloud. That’s especially true with all the legacy and data systems still in play and the heavy regulations across the industry.

The need to prioritise mainframe modernisation

Next year, banks that haven’t yet, need to prioritise mainframe modernisation in order to increase agility and easily integrate with the latest technologies and practices. The generation that built and maintained legacy systems is retiring, which means it’s time for banks to move to a more modern cloud environment for increased elasticity, horizontal scalability and reliability.

This shift could mean ‘re-platforming’—moving core applications to the cloud with minimal code changes—or ‘refactoring,’ which involves re-architecting applications for optimised cloud performance. In addition to staying competitive, banks that take the leap to modernise their mainframes can unlock major benefits, including up to 90% savings on operating costs.

In today’s competitive banking world, it’s all about differentiating yourselves through customer experience. GenAI co-pilots and no-code platforms are changing the game for product development, making everything from pricing strategies to brainstorming new ideas a whole lot better. In 2025, I anticipate we’ll see more banks prioritising GenAI and no-code strategies to invest in the next generation of product development in banking.

One customer segment banks will increasingly focus on in the coming year is multigenerational family households, which, according to our research, represent 20% or more of the retail banking customer base for many financial institutions. Amdocs found that this demographic of customers is increasingly interested in personalised banking solutions, with 68% of respondents from multigenerational households expressing a desire for services that help manage family finances. Financial institutions that integrate family banking into broader financial wellness programmes will be well-positioned to lead the market.

Michael Savicki, Chief Risk & Compliance Officer, Amex GBT

Business travel data, rich in personal information, has always been attractive to fraudsters and related bad actors but the game is changing fast. With the rise of generative AI, we’re seeing new threats emerge—deepfakes mimicking executives, AI-driven phishing attacks tailored to individual employees, and increasingly sophisticated social engineering attempts. Fraud is no longer just opportunistic; it’s strategic, precise, and progressively difficult to detect.

The same technology powering these sophisticated threats is also our best defence. AI-driven fraud prevention tools, to enhance authentication are enabling organisations to spot anomalies in real time, like unusual device usage or deviations in how users interact with booking systems. At the same time, advanced algorithms are being deployed to verify the authenticity of communications, guarding against deepfakes and phishing attempts.

As we move into 2025, the challenge for businesses will be to outpace fraudsters by using enhanced processes and utilising technology including AI smarter and faster than they can. It’s a double-edged sword: the tools that fuel the problem are also the ones that offer the greatest potential solution. The key will be vigilance, strong processes, adaptability, and staying one step ahead in a rapidly evolving travel fraud landscape.

Guy Mettrick, Industry Vice President, Financial Services, Appian

Gen AI will move from experimentation to becoming the backbone of financial services

In 2025, generative AI will move from an experiment to the backbone of financial services. Attitudes towards it will change. We’re not talking about a simple tech update here. This is a major shake-up. Picture document data extraction rates climbing from 75% to 96%. It’s not just impressive; it’s transformative. Operations, risk management, and internal processes will become more streamlined and automated. 

Using process as a frame, agentic AI can boost productivity. The collaboration of autonomous AI agents defines it. This is especially true for financial services providers. By embedding agentic AI in structured processes, organisations can ensure it works well. This will leverage data access, foster collaboration, and provide actions to maximise ROI. The stakes are high. Those who put in place early will lead the pack. The faster competitors may leave the slower ones behind before the race starts.

Transparent AI models will win out in FS

Governance will be at the heart of the AI story in financial services next year. The days of “black box” AI will soon be over. Instead, explainable models will be the new standard. Customers will demand transparency. The focus on model risk management in finance has built a solid foundation. Early adopters will lead the way. They will roll out AI solutions that meet the standards of regulators and customers.

Data fabric networks will replace traditional data management frameworks such as data lakes

FSIs will prioritise leaving siloed, cumbersome data in the past. Forget about those vast data lakes; the new game-changer will be data fabric. Data fabric lets organisations keep their data where it is. It avoids the cost of moving it to a centralised data lake. It connects it with a flexible network. The result? Less time spent managing data, faster insights, and smarter decisions. 

The open banking ecosystem will make cybersecurity a battleground for a competitive edge

Open banking will expand in 2025. It will shake up finance by boosting competition and giving consumers more control. Yet, more participants mean more potential weak spots. The growing ecosystem among financial players will turn cybersecurity into a battlefield. New, more advanced threats will emerge. To stay ahead, firms must adopt advanced, adaptive, predictive security. Regulations like ISO20022 and DORA are pushing for these advancements. So, compliant strategies are a necessity, not just a goal.

Kevin Barrett, Managing Director, Private and Commercial Banking, Arbuthnot Latham

In 2025, personalised, trusted guidance will be essential as clients seek clarity and confidence in their financial decisions. Private banks must prioritise being more approachable and proactive, offering expert advice and guidance to help clients navigate an increasingly complex financial landscape, especially following the Autumn Budget and the election of Donald Trump in the US.

Continuing to invest in digital infrastructure will remain essential. Clients expect seamless, frictionless experiences, whether accessing accounts, making transactions, or seeking advice. By streamlining operations digitally, private banks can make banking simpler and more convenient for clients, enhancing their overall experience. To thrive, however, we believe technology should enable deeper client relationships – helping bankers better understand the needs of their clients and how to provide the most appropriate service.

Recent industry trends have seen UK private banks offer similar wealth solutions across various client segments along with more self-service options. Whilst this approach provides cost benefits for the bank, success depends on maintaining a client-first approach.

Banks that pair digital solutions with deep expertise and personalised service will thrive and foster loyalty in a market where the number of private banking accounts has contracted. Arbuthnot Latham’s experience illustrates this balance, our commitment to personal relationships and expert advice has driven over 10% growth in client numbers since 2023, and a net promoter score over 71.

Mateusz Kara, co-founder and CEO, Ari10

The Trump-effect on crypto payments
The rise in crypto payments has skyrocketed since Trump’s presidential win. Due to its position as a store of wealth, few are paying in BTC; however, stablecoins, due to their proximity to FIAT, are seeing mass adoption for crypto payments.
It used to be only a small number of crypto enthusiasts who’d consider purchasing anything with crypto, now we speak about it in the same breath as the Euro, Dollar, and Zloty as an additional layer of diversification.
With crypto bullish currently, why wouldn’t consumers buy a car or a laptop with it? The Trump effect is in full swing and will only continue to grow crypto’s importance to payment systems in the coming years.

Ukraine and the spike in crypto payments

We have seen a spike in crypto payments across Ukraine since the start of the invasion. Whilst traditional banking systems have proven to be difficult to navigate in times of conflict, families have found they have been able to support each other financially through frictionless cross-border crypto transactions. As the value of crypto has trended upwards, so have its use cases for cross-border transactions.

Crypto remittance is ‘the new normal’

Crypto continues to grow in value as the world continues to become more politically complex. The more that individuals need to move to seek a stable life, the more they will feel the need to diversify where their assets are held.
Crypto, due to its current value, is providing a haven for many, and this is being reflected not only in the market cap but also in the sharp increase in adoption for payments.
Remittance tariffs have shot up in recent years, with some paying up to 8% of fees transferring from Poland to central Asia. Many companies have profited off no easy solution, so it is good to see a more secure, frictionless way to transact money become a new normal for many.

Daniel Austin, CEO and co-founder, ASK Partners

Five real estate opportunities to watch out for in 2025

The UK real estate market in 2025 is set to offer a diverse range of opportunities. Key growth areas include build-to-rent (BTR), co-living spaces, student housing, hotels and offices. These sectors present promising avenues for investment despite ongoing economic uncertainties. However, navigating challenges such as tax increases, inflationary pressures, and tightening environmental regulations will be crucial. While 2024 proved challenging, marked by recovery from the 2020 lockdown and shifts in interest rate policy, ASK successfully navigated these hurdles. By bolstering our loan book with income-producing assets, the firm has mitigated default risks, completing 20 loans in the year to end of October, and has now lent £1.7bn without capital loss. With a clear understanding of emerging trends and a commitment to innovative strategies, ASK believes that investors in 2025 can position themselves to achieve significant returns in this evolving market.

Build-to-Rent developments

BTR developments continue to shine as a promising investment class, especially in high-demand urban areas like London, Manchester, and Birmingham. These projects cater to the surging demand for rental housing, driven by a growing population and the UK’s ongoing housing crisis. Government initiatives and policies are further encouraging BTR growth, making it an appealing long-term strategy for investors. Rents have continued to rise; however, affordability has started to bite, making it harder to cover rising construction costs. Additionally, regulatory frameworks demand heightened quality standards, which can slow project timelines. Nevertheless, strategic planning and careful site selection in prime areas can mitigate these risks, ensuring robust rental yields and sustainable growth.

Co-living

Co-living is emerging as one of the most promising real estate opportunities for 2025, driven by shifting demographics and changing lifestyle preferences. As urbanisation accelerates and housing affordability challenges persist, particularly in major cities, co-living offers a cost-effective and flexible alternative for young professionals, remote workers, and digital nomads. This model capitalises on shared living spaces combined with private quarters, fostering community while maximising space efficiency, a key advantage for developers.

Additionally, it aligns with the growing demand for sustainability by reducing per-capita resource use. The sector benefits from rising interest in experiential living and is underpinned by strong rental yields and scalable business models, often enhanced by tech-enabled management platforms. As investors seek resilient asset classes, co-living stands out for its ability to adapt to modern living trends, making it a lucrative, forward-thinking addition to real estate portfolios.

Hotels

The UK hotel sector is emerging as a standout real estate investment opportunity. Despite broader market caution, transaction volumes are rising, with developers and operators adapting creatively to shifting guest demands. The sector has rebounded strongly, nearing pre-pandemic performance levels, with £4.5 billion transacted so far and projections of £6bn by year-end. London and Edinburgh lead growth, with regional demand for golf and spa retreats boosting revenues by 12.5%. Hotels’ dynamic nature, including flexible pricing that hedges against inflation, drives investor appeal, especially among wealthy individuals and family offices. Innovations like aparthotels and hybrid hospitality hubs cater to evolving corporate travel and lifestyle preferences. However, challenges remain, including rising costs, regulatory hurdles, and the cyclical nature of the market. Conversion projects and creative financing will play a key role in overcoming these obstacles. For savvy investors, the sector offers strong potential for returns amid this transformation.

Student living

Student living continues to thrive as a standout sector in real estate, offering resilience and strong growth potential in a challenging market and yields stable between 4.5% and 5.5%. University towns like Oxford, Cambridge, and Bristol lead the way, driven by consistent demand, double-digit rental growth post-Covid, and rising numbers of international students seeking high-quality accommodation. Investors who understand the cyclical dynamics of these cities, shaped by league table performance and regional factors, are well-placed to capitalise. New approaches are reshaping the market, with firms creating funds for forward-funded or joint-venture projects to bypass traditional private equity reliance.

However, developers face headwinds, including rising refinancing costs and stricter lending criteria. Collaboration is growing, with calls for a special-purpose lobbying group to unite universities, councils, and developers in overcoming sector barriers. Amid strong demand, robust returns, and creative solutions, student living stands out as a compelling investment opportunity for 2025.

Offices

The office sector has reinvented itself post-covid, adapting to hybrid working and new workforce expectations. After a challenging 2023 marked by declining values and hesitant decision-making, 2024 has brought stability. Experts suggest the market may have bottomed out, offering opportunities for patient investors.

Rental growth is now driving value enhancement in prime assets, while refinancing challenges persist for distressed properties which don’t meet minimum EPC standards. Flexible and hybrid workspaces are particularly appealing, enabling landlords to meet diverse tenant needs and foster dynamic ecosystems. London’s office market is a global standout, with occupancy exceeding pre-pandemic levels and ranking third worldwide. Developments like Google’s King’s Cross headquarters showcase how innovative design can influence market trends. As demand grows for modern, sustainable, and flexible spaces, prime assets in the office market will remain a key component of long-term real estate strategies heading into 2025.

Conclusion

The UK real estate market in 2025 presents a landscape rich with opportunity but demands a nuanced and strategic approach to thrive amidst economic headwinds. Embracing innovative living concepts and integrating sustainable technologies will unlock new avenues for growth. Success in this dynamic environment will favour those who remain agile, forward-thinking, and well-informed, positioning themselves not just to adapt to the challenges but to capitalise on the opportunities of the year ahead.

Ofer Friedman, Chief Business Development Officer, AU10TIX

Digital IDs (ID wallets) will experience slower growth than expected, due to interoperability issues.

Government wallets and commercial wallets will live alongside each other, each seeing different usage patterns.

Gen-AI (deepfake) fraud will grow exponentially, but most volumes will come from professional, organised fraud groups.

The ability to detect Gen-AI (deepfake) voice and still photos by sight or hearing will diminish, but video response gestures and lip-synch will in many cases still be visible.

Since voice deepfakes are easier and more convincing to commit than visual deepfakes, they will be more readily exploited by fraudsters, thus challenging current identity verification practices.

 

Andrew Dalrymple, investment manager, Aubrey Capital Management

2024 has been a very strong year for US equity markets, with the S&P 500 up 28.5% to the end of November (in GBP). Aubrey’s Global Conviction Fund has taken advantage of this environment and gained 49.2% YTD against 20.7% for its index (MSCI AC World Index).

The Global Conviction Fund’s midcap stocks have generated significant value this year, a trend we expect to continue as performance broadens out. This is where we believe we add most value to investors, with our flexible, market cap agnostic approach allowing us to pivot to wherever we see the most opportunity. While many others are fearful of what the coming months holds for the US, we remain confident that further upside remains with effective stock selection in the right areas.

The strength of the US has started to throw up questions amongst investors as we head into 2025. The past few weeks have seen news feeds and social channels clogged with people pointing to the S&P 500 valuations and predicting doom and gloom for US investors. The index P/E of 22.7x now almost at peak levels over 10 years and a 23% premium to the average, however, the Mag-7 now account for ~30.5% of the S&P 500 so focusing on the S&P 500 from a market cap weighted perspective has become less reflective of where overall US valuations stand.

A more interesting insight is to show the P/E of the S&P 500 Equal Weighted Index, which lays bare the bifurcation we have seen between the largest stocks in the index and the rest showing that since 2022 the two indices have substantially diverged from a valuation perspective, and that the equal weighted remains closer in line with its 10-year average with a 7.5% premium.

With the US economy remaining robust and the prospect of further interest rate cuts into 2025, we view this premium as justified for the growth opportunities on offer.

Andrew Ward, Chief Executive Officer, Aubrey Capital Management

Much depends on a successful transition of power across the Atlantic in the White House. The US election result and resultant surge in the US market gave us a glimpse of greater confidence in corporate America. Despite the rhetoric around tariffs, the form of the president elect is that he is probably more likely than his predecessor to pick up the phone and negotiate with the Chinese leader; it is rumoured that president Xi has been invited to the presidential inauguration in January.

Trumpian diplomacy might yet provide a boost to Emerging Markets, considering that close ally Elon Musk relies heavily on China as a manufacturing base for roughly half of all Tesla EVs, so that link might be more important than is immediately obvious. With around 50% of our Emerging Markets portfolio invested in China, Taiwan and other Asian countries, this gives us a measure of reassurance that the geopolitical view is not as bleak as it can sometimes seem.

A peaceful resolution of the conflict in Ukraine would provide some much-needed stability in continental Europe and near-Europe (including the UK) as effects go beyond the obvious oil and gas issues.

Ukraine was traditionally Europe’s ‘bread basket’ and the supply of a number of important grains and plant oils has had an impact on food price inflation across the continent and beyond. Again, there is a feeling that Trump/Putin relations could be productive, a solution might be negotiated and a cessation (at the very least) to the hostilities brought about.

As recent events in the Middle East have shown, globally strategic twists can occur without warning and we feel that we should remain nimble and locally well informed to best react to changes across the globe, be they macro or micro.

Brendan Thorpe, Customer Success Manager, Auriga

A course correction on Banking Hubs and FCA oversight

The consultations have been completed and the regulatory rules activated, and we are going into 2025 with the FCA promising a tougher line on holding banks to account when they want to shutter a branch. So, in the coming year we hope to see the regulations have a positive effect. One measure of this should be how the banking hub programme picks up pace and hubs are opened much faster than in previous years. But it is imperative that the FCA is held to account on how it takes the necessary steps to apply its regulatory oversight in directing this programme, and customers need to feedback on their experience of the new hubs. The fact is that how these hubs are configured falls short of what customers have lost since the closure of their local bank branch. As more customers realise this it is likely that pressure to revamp the hub concept is going to grow in 2025 even as more hubs are opened. So, could we see the new FCA rules reviewed before the end of 2025 or even sooner?

Part of the FCA rules pushes banks down the route of ensuring that where gaps exist and alternative services are not available, that branches should stay open. What impact this will have remains to be seen, but what has happened is that banks are starting to consider alternative branch formats to try and reimagine the operational efficiency of that environment and this is a trend that we expect to continue.

There are at least two banks that are considering an outsourced branch provision using a simplified infrastructure that is delivered as a service but staffed by the bank. This is an attempt to directly control the costs associated with a point of presence on the high street without the need for a fully-fledged branch. These are 100% self-service from a cash perspective and likely to be more sales and service orientated from a non-cash/staff facing perspective.

Answering the cash management crunch

The industry is in a perilous cost position, whilst we know that there are around 3 million people in the UK who rely on cash for their daily spending, but they are firmly in the minority. However, it is a group that is important, needs to be served and is not reducing.  As a result, we are seeing a decline in the overall cash transaction volume but an increase in the value of cash being taken out. Many of the reasons for this lie with inflationary pressure; others are simply down to our changing relationship with cash. Irrespective, the net effect is the cost per transaction has risen steeply, which raises an important question which we need to find an answer to.

Unless there is a significant adjustment in the interchange rates, the simple answer to this will be to address the costs, for example through ATM pooling or outsourcing. From a consumer perspective there is a strong argument that this is something that largely already exists in the UK as we have a strong network of free to use ATMs so the customer impact of pursuing this would be limited. Outsourcing is being pursued by many of the banks already, particularly for off premise machines as banks seek to focus on serving their own customers and we expect this trend to continue.

Cash infrastructure is another area where we have seen some change in other countries, as regulatory structures have been put in place to move to simpler infrastructure models that use shared systems and outsourcing to single providers. We do not believe that the UK is quite there yet or that it will go down the same route as Australia, but we do expect to see some efficiencies being achieved through consolidation and natural selection.

More and more banks are looking at the efficiency of their cash ecosystems and this is driving certain trends. The first is the use of data modelling based on AI and machine learning to optimise cash holdings and forecast usage across their networks with the aim of reducing costs. The second is that we have seen an uptick in recycling, not just in banking but also in retail and this raises the most interesting possibilities.

Today, a lot of the cash processes are built around the distribution of cash from the centre to the users and its return to the centre in the collection process. This is being challenged more and more with banks using recycling to automate the collection process and reduce the need for Cash-in –Transit (CIT) deliveries with vary degrees of success.

In the retail environment this is being used in a slightly different way, mostly to secure cash and remove it from the cashier. However, this could be used to create local cash ecosystems where cash taken in is recycled out through ATMs within the community. This is something we have seen in other countries and expect to see happening more in 2025.

Is 2025 the year the neo banks move into the physical world?

One trend that we have seen over 2024, is the increasing presence of neo banks in the Point-of-Sale (POS) space with many offering solutions that blur the boundaries between Electronic Point-of-Sale (EPOS) and traditional POS. The leap from an integrated EPOS/POS solution to an agency based distributed banking through an app for cash in/out is not a massive one.   It is a step that we expect see taken soon, and 2025 might be the year that we see the neo banks make moves into the physical world but in a very non-traditional way.

Brian Goudie, CEO, Aurora Payments

Vertical payment systems

Vertically integrated payment systems will continue to grow. Especially SMBs don’t pick a payment provider because of its ability to process payments – since most providers enable the most common payment methods. Business owners first want to address a different pain point specific to their industry, and great payment functionality is a nice add-on. Industry-specific pain points are best addressed by vertical solutions. These systems can be used for scheduling appointments, tracking finances, managing sales, and processing payments. In 2025, small companies will increasingly choose vertical integrated payment systems rather than catch-all payment systems.

Biometric payments

2025 will not be the year for biometric payments adoption in the US. While biometric payments have taken off around the globe, the technology will continue to drag in the United States, partly because customers in the US don’t trust the technology. Even though the technology promises quick and frictionless transactions, US consumers showed widespread hesitance and skepticism towards biometric payments, and almost half had security concerns. So, while some individual US retailers may start to dabble with biometric payments in 2025, it won’t be the year where this payment method sees widespread adoption in the US.

Payment agnostic solutions

Cash and credit cards have been the standard for SMBs for a long time. Increasingly, SMB customers have been able to pay with Venmo, PayPal, and even Zelle. 2025 will be the year when SMBs need to be completely payment-agnostic and offer customers more options to pay by the method of their choice. As businesses pass on processing fees to their customers, pay by bank, PayPal, and Venmo will become more widespread. Payment agnostic solutions are already the norm in tech-centric cities like San Francisco and NYC and will soon become the standard nationwide.

Trevor Rubel, President and COO, Authvia

The payments and banking sectors are on the cusp of significant transformation as we head into 2025. One of the most critical shifts I foresee is the continued rise of messaging-based payments and conversational commerce.

Consumers are increasingly seeking faster, more intuitive ways to interact with businesses, and payments need to meet them where they already are—inside the messaging channels they use daily, like SMS, WhatsApp, and Rich Communication Services (RCS).
At Authvia, we’ve seen firsthand how embedding secure, app-free payments directly into conversations not only enhances convenience but also drives tangible results for businesses. For example, our partners across industries are capturing revenue 30% to 60% faster, while significantly reducing operational costs by offering seamless payment options within messaging threads. This trend is poised to grow as more consumers demand immediacy and simplicity in their financial interactions.

Moreover, messaging-based payments offer a unique advantage by bridging the gap between transactional efficiency and customer engagement. Instead of forcing users to switch between multiple apps or interfaces, conversational payments keep them within the flow of interaction, creating a seamless and delightful experience. For businesses, this means not just higher conversion rates but also stronger customer loyalty and repeat engagement. Additionally, by allowing customers to pay in-message when they are told about a bill that’s due, a pet, a vehicle, or a prescription that’s ready for pickup, the business has eliminated the need to pay a pharmacist to be a retail checker, or the front office staff to spend time managing a payment process. For many businesses these operational savings go straight to the bottom line and make innovations in the payment experience a win-win for the customer and the business.

Tokenisation and encryption technologies

From a security perspective, tokenisation and encryption technologies will play a crucial role. Customers want control over their data, and businesses must prioritise solutions that keep sensitive information secure while delivering a frictionless experience. With Authvia’s message-based payments a consumer’s sensitive banking or card data is never touched by the business. Customers can leverage their existing digital wallets or enter new payment data into their own phone and have Authvia securely deliver it to the business’s payment partner. We’ve seen a significant trend with call centres, field services operations, and back-office personnel moving away from taking payment information directly and instead allowing customers to pay over text, thereby eliminating PCI and fraud exposure from their organisation entirely. As regulatory pressures increase, companies that can balance compliance with innovation will stand out. We’ve seen how advancements like text-based payments can build trust, accelerate payments, and create a more resilient payments ecosystem.

Looking ahead

I predict we’ll see broader adoption of conversational commerce in sectors like retail banking, where personalisation and immediacy can transform customer relationships. Messaging channels will evolve beyond payments to include ID verification, signature and document capture, and more, creating a single, unified customer journey. For instance, envision a scenario where a customer can open an account, verify their identity, and initiate their first transaction—all within a single chat thread. This level of integration will redefine how banks and businesses connect with their customers.

As we explore the broader implications, it’s also essential to recognise the growing role of artificial intelligence (AI) and automation in conversational commerce. Intelligent chatbots, powered by natural language processing (NLP), can enhance interactions by providing instant support, personalised recommendations, and even predictive analytics to anticipate customer needs. Combined with secure messaging-based payments, this creates a robust ecosystem of service delivery that meets users where they are, both literally and figuratively. In the retail, hospitality, travel, and service industries message-base payments are emerging throughout both sales and service customer journeys. Today these interactions are primarily driven by batch APIs (billing) and human agents chatting with consumers. In 2025, as AI driven chatbots take a larger role, seamless payment integration is a requirement we are just beginning to see today.

The future of banking and payments will be defined by how well we integrate convenience, security, and customer-centricity. The companies that thrive will be those that innovate not just for tomorrow but for the pressing demands of today. At Authvia, we’re committed to shaping this future by continuing to push the boundaries of what’s possible in conversational commerce, enabling businesses to connect with their customers in ways that are not only efficient but also transformative.

Jouk Pleiter, CEO and founder, Backbase

AI drives fight for primary banking relationships
As consumers now juggle 3.2 banking relationships (up from 2.6 in 2021), AI-powered recommendation engines will become critical for banks to reclaim their position as primary financial partners. With 70% of consumers demanding personalised financial advice, banks that successfully implement AI will gain a decisive competitive advantage.

AI Agents will revolutionise customer service
While banks invested $600bn in technology last year, 2025 will mark a pivot to strategic AI adoption. With Deloitte predicting 25% of companies will launch agentic AI pilots, these AI-powered assistants will transform customer service, handling complex interactions while freeing human staff for high-value activities.

Open finance will accelerate
January 2024’s record-breaking £14.5m in open banking payments (69% YoY growth) signals the shift from open banking to open finance. With the market growing at 27.4% CAGR through 2030, this transition will expand financial services across insurance, investments, and pensions, particularly benefiting underserved markets.

Vertical iPaaS becomes essential
Industry-specific integration platforms will emerge as critical infrastructure, demonstrated by early adopters like Standard Bank achieving 86% faster case resolution and 28% higher customer satisfaction through unified data implementation.

Neobank competition will intensify
The global neobank market’s projected growth to $292.7bn by 2030 (54.8% CAGR) makes digital transformation an urgent imperative for traditional banks. Success will require strategic modernisation that matches neobank agility while leveraging existing market strengths.

Paul Holland, CEO, Beyond Encryption

A dramatic increase in digital accounts has led to the development of ‘account fatigue’, with 50% of consumers sharing that they feel overwhelmed by the number of portals they have to access. Studies also show that 60% of customers find that financial portals, including those for their pension, mortgage, and insurance, are difficult to navigate and use. This has led to extremely low engagement rates, with 43% saying that they are hesitant to use online services.

Their preferred method of communication? Email. With a substantial 65% of consumers preferring to receive documents via email, and only 7% preferring portals, now is the time for financial institutions to pivot their strategies to better meet customer needs.

By aligning with the consumer preference for convenient and speedy interactions, businesses will unlock a new level of customer experience that removes all unnecessary friction and delivers communications straight to their inbox. This will have a knock-on effect on financial institutions, fostering stronger engagement and more reliable channels of communication. Businesses can also take this one step further by personalising their communications to generate loyalty and trust amongst their customers.

In 2025, financial institutions must prioritise customer-centric strategies, delivering information and services to consumers through the channels of their choosing. Otherwise, they risk losing customers to the competition.

Verrion Wright, Privacy and Security Researcher, BigID

The financial services industry is in the midst of a technological evolution that has the potential to revolutionise operations, customer experiences, productivity, and efficiency. The only thing standing in the way of this transformation is emerging cyberattacks that continue to grow in sophistication and complexity. As a result, banks and other financial institutions are poised to make sweeping changes in how they approach cybersecurity in 2025 and beyond.

As financial services migrate to the cloud, ensuring compliance with industry regulations will become more challenging. That’s why in 2025 and beyond, banks and other financial institutions will focus on securing cloud environments with better encryption methods and improved monitoring to reduce the likelihood of being a victim to a data breach and noncompliance.

Another prediction is in 2025 and beyond, financial institutions will invest more heavily in employee training and awareness programs. While advanced technologies play a critical role in cybersecurity, human error remains one of the leading causes of breaches. In a bid to enhance data security, we predict that these institutions will invest in staff development in the coming years. Investing in staff development will help these institutions educate their staff about the best practices for data security and its importance.

Furthermore, it will help the staff be more informed and involved in the organisation’s data security. Consequently, this is a plus, as it would help create a culture of security consciousness at work.

Mary Kay Bowman, EVP & GM of Payments & Financial Services, BILL

As fintech leaders, we often find ourselves worrying about a range of risks, but the one that keeps me up at night is often the least obvious. While much attention is given to advanced fraud technologies and the arms race to combat them, one persistent issue is the continued use of paper checks.

Despite significant technological advancements, 75% of businesses still accept paper cheques, leaving them highly vulnerable to fraud. In fact, check fraud contributes to a $24m annual problem. This issue, while critical, often doesn’t get the attention it deserves, despite the significant risk it poses to businesses. This, along with payment fraud, has become a top concern for businesses and retailers as they look ahead to 2025. According to recent data from BILL, nearly half of SMBs report that payment fraud is a growing issue, yet only 29% of finance leaders are confident in their organisation’s ability to protect against it. The bottom line is, wherever payments are happening and money is moving, fraudsters will try to take advantage.

Looking ahead to 2025, there’s a real opportunity for fintech leaders to help businesses transition to digital financial operations and reduce their reliance on paper checks, ultimately lowering the risk of fraud. Innovations like AI, particularly behavioural analytics, hold great promise in this area. By detecting patterns and anomalies, we can flag suspicious activity and prevent fraudulent transactions. AI can also help streamline authentication processes, improving the customer experience while potentially helping to save businesses millions in attempted fraud.

Stephen Boyer, Founder and Chief Innovation Officer, Bitsight

On the pace of cyber attacks

One of the biggest shifts that we are seeing in cybersecurity is how quickly vulnerabilities are being exploited – sometimes within just a few days of discovery. This leaves organisations with almost no margin for error. Threat actors have a distinct advantage in the short term because they aren’t bound by the regulations and internal policies that defenders must adhere to. Businesses need to embrace real-time monitoring and proactive risk management, not just for their internal and externally facing systems but across their entire digital supply chain.

AI

AI is becoming both an enabler and a threat in cybersecurity. While it is helping us augment teams and speedup response, it is also being weaponised by attackers and introduces an additional channel to the attack surface. For instance, we’re seeing AI used to create phishing campaigns that are incredibly targeted and multilingual, rendering many of our previous detection methods insufficient. This underscores the need to rethink how we identify scams and train our teams. It’s a reminder that cybercriminals are innovating just as quickly, oftentimes more rapidly than defenders, and staying ahead means weaving AI-enabled capabilities into our portfolio of security investments.”

Critical infrastructure:

Nation-state actors will continue targeting critical infrastructure, with energy, healthcare, and other essential services facing heightened risks. These attacks can not only disrupt operations for millions of people but also expose vulnerabilities in the digital supply chain, where third-party risks often go unidentified and unchecked. Businesses need to adopt a strategy that gains visibility and governance of the entire extended enterprise, extending visibility and assessments of assets beyond those under their direct control but also to those of their supply-chain partners.

Regulation

With new regulations like the EU’s Cyber Resilience Act and Digital Operational Resilience Act, regulators are continuing to raise the bar for cybersecurity and are establishing a new global benchmark for cybersecurity compliance. New regulations highlight the importance of proactive risk management and continuous monitoring. Companies that embrace the new standards and best practices will not only meet compliance requirements but will also be in the best position to respond to emerging threats.

Jean-Baptiste Graftieaux, CEO, Bitstamp

2024 was a pivotal year for cryptocurrency. Strengthened regulations further integrated crypto into mainstream finance, while a focus on compliance and security bolstered trust in the sector.

Bitcoin had an extraordinary year, with its price soaring by approximately 130%, driven by enhanced regulation and strong support from the incoming U.S. administration. Crossing the $100,000 mark in December was a landmark moment.

Trust in crypto grew in 2024 after the sector put right some historical wrongs. Bitstamp was one of the exchanges to help restore assets to those who lost out from the Mt. Gox collapse a decade ago.

Exchange-traded funds (ETFs) emerged as a major trend, opening crypto markets to a wider range of investors. Additionally, Bitstamp secured its landmark MiFID MTF licence in October, which will enable us to offer crypto derivatives to institutional and retail customers—further highlighting the evolution of the industry.

Global regulatory frameworks are adapting to support crypto, solidifying its position as a cornerstone of the decentralised financial system and making crypto investment more accessible and flexible.

We’re excited about the renewed confidence in cryptocurrency and the growing recognition of its benefits by world leaders. In 2025, cryptocurrencies are poised to strengthen their place in the global financial system. While the exuberance of late 2024 may cool, the sector’s fundamentals remain robust.

The incoming US administration’s favourable stance on crypto, coupled with expected macroeconomic improvements, could boost digital asset values while preserving their appeal as an inflation hedge.

ETFs were a game-changer in 2024, making crypto investment more accessible to both retail and institutional investors. This trend will likely continue, supported by new U.S. regulations and the rollout of MiCA in Europe, which aims to increase market transparency.

As crypto gains recognition as a versatile asset class, institutional demand for indirect investment products will grow. Bitstamp’s dedication to safety, security, and compliance positions us to serve both retail and institutional customers effectively.

We look forward to building on this momentum, fostering trust, and championing innovation as the sector continues to evolve.

Brent Johnson, Chief Information Security Officer, Bluefin

The deadline of March 31, 2025, where most new PCI-DSS 4.0 requirements become applicable, has many merchants scrambling. Of most concern are new MFA requirements for all user access into CDE, as well as new eCommerce requirements (6.4.3, 11.6.1). The latter of which, due to the amount of confusion, has seen a massive push in the industry for the PCI SSC to provide additional guidance.

Retail payment security in 2025

Retail in-store payments will continue to see a rise in the use of digital wallets and payments utilising services such as Google Pay, Apple Pay, or Samsung Pay. The shift to digital wallets also signals the shift to tokenisation, with significantly less merchant environments having access to actual credit card information.
Fewer merchants are accepting cash payments and more are increasing their use of Peer-to-Peer payment providers (Venmo, Apple Pay, PayPal, Zelle, etc). There will be breaches (as always), however, I believe threat actors will soon set their sights further up the supply chain (service providers, token providers, etc) as less merchants will have access to sensitive credit card information.
For eCommerce, AI tools are evolving to enhance fraud detection, providing more accurate and real-time monitoring of transactions. There is also increased issuer support and adoption of single-use virtual cards for purchases, adding an extra layer of security for online transactions. Additionally, more merchants are supporting 3D Secure (3DS) authentication to prevent fraud, ensuring that transactions are verified and secure before they are completed.

Emerging threats and payment data protection

As payments shift to digital and mobile (and all the information we maintain on mobile devices), so will the threat actors. I expect to see phishing and malware targeted at mobile devices to significantly increase. Recent studies of data value on the dark web demonstrate that the documents necessary to steal a person’s identity are valued at around $1,000. This includes banking details, credit/debit information, SSN, drivers, license, etc. Online logins to bank accounts and P2P payment providers such as PayPal are also highly valuable and will be a constant target.

Other payment security trends in 2025

AI Deep fake attacks targeting companies for financial gain will increase in the year ahead. Again, the use of digital wallets for payments will rise as these options offer (better security measures. AI usage, both offensive and defensive, will also increase, and defensive blockchain will continue to move toward mainstream acceptance.

Brian Gaynor, VP of Product and EU CEO, BlueSnap

In the coming year, with a tight economy and economic uncertainty, companies are going to focus on building resiliency. Executive teams will start to evaluate their current operations to identify areas for streamlining and improvement. Given that we expect challenging economic conditions due to limited capital and unpredictable consumer spending in 2025, controlling expenses will be essential for business survival in 2025.

Vendor consolidation

An important way to manage a firm’s spending is through vendor consolidation, which helps reduce both costs and complexity. Managing fewer vendors simplifies communication, minimises administrative tasks, and eliminates the redundancies caused by overlapping services. A smaller vendor base also reduces technical debt by fostering standardised processes, consistent integrations, and fewer compatibility issues. On the other hand, using multiple fragmented solutions can lead to significant technical overhead. To build resilience, leaders will prefer partnering with a single, versatile provider that can provide the geographic and payment method coverage matching their business, over juggling multiple solutions. Consolidation with a leading provider will also help businesses cope better with the changing global payments landscape, as new regional payment methods gain traction and need to be available for your shoppers to checkout successfully or to invoice easily.

Another key strategy to build resilience that will be on executives’ radar is automation. Manual invoicing is both time-consuming and resource-intensive, and senior leaders have reported that their teams spend 11 working hours managing a single invoice. In a tight economy, these inefficiencies are unsustainable. Automation can reduce inefficiencies and improve metrics like Days Sales Outstanding (DSO), which measures the average time it takes to collect payment after a sale.

A high DSO can signal cash flow challenges, strain working capital, and highlight inefficiencies in billing and collections. Automated systems can trigger reminders and email campaigns when payments are due, encouraging timely customer payments and reducing DSO, while maintaining control of the AR process.

Reducing cart abandonment

A final method business will be looking to implement as they attempt to become more resilient is optimising payments. Presently, the average cart abandonment rate in the UK is about 75.6% – so you spend lots of money attracting customers to your site, selecting your products. Then, nearly a quarter of them fail at that final hurdle. It is leaving money on the table! Many companies focus on costs when they are setting up or integrating a payment system.

To meet target cart abandonment numbers, businesses must start considering the revenue losses that streamlined payment processes can turn into opportunities. With the right provider, companies can boost authorisation rates and approvals using existing online stores to decrease abandonment and complete more sales. Coupled with presenting the local currency to the shopper and the local region’s payment processing gives higher completion rates and a reduction in the costs of cross-border transactions. All this means an optimised payment process, delivering more successful sales at a lower cost.

Thomas Gillan, CEO, BR-DGE

In 2024, we witnessed a fundamental shift in the acceptance of payment orchestration at the enterprise merchant level. What started with early adopters has now evolved as these pioneers have become category leaders in verticals such as ecommerce, gaming and gambling. This momentum is extending into other industries like travel, particularly airline travel, driving significant growth. For the first time, payment providers and merchants are saying: ‘I don’t want everything, I just want this, and later, I might want that’. This flexibility is the promise of orchestration, and the API-first approach continues to embed itself deeper into the payment ecosystem.

In the acquiring landscape, the unbundling of services is accelerating, accompanied by a shift in mindset among acquirers. They’re moving away from commoditised acquiring models. Take Stripe, for example, a full-service PSP, where previously, using their fraud tool meant committing to their entire ecosystem. Now, they’re pivoting towards a Salesforce-like model, prioritising the creation of a payments marketplace over a singular solution.

Historically, acquirers sought to own 100% of a merchants’ transaction volumes, often relying on lowball bids to secure them. This approach commoditised acquiring and sparked a race to the bottom on cost. Today, however, there’s a strategic shift: acquirers are focusing on accessing targeted flows within specific verticals. Payment orchestration layers provide the intelligence and technology interface to enable this level of precision.
We’ve seen the early signs of this shift throughout 2024, and it’s clear the trend will ramp up in 2025. Initially, we were somewhat sceptical about the scale of adoption, but demand from enterprise groups for choice and flexibility has proven that this shift is merchant-driven. Acquirers, in turn, are softening their stance and increasingly embracing orchestration as a critical component of their stack.

The first step, the acceptance of orchestration, has been achieved. Now, discussions have moved beyond why to adopt orchestration, towards how to execute it strategically. While there’s still ground to cover, the path forward is becoming increasingly clear.

Chris Harmse, co-founder and Chief Business Officer, BVNK

Stablecoins cement their place as a new global payment rail

Stablecoins have brought speed, transparency, and accessibility to payments that traditional systems can’t match. What started as a tool for crypto trading, has now become a mainstream payment rail. Around $17trn stablecoin transactions were made in 2024, with payments accounting for an estimated $5trn of those (that’s over a third of the volume processed by Visa). In 2025, we predict that global payments volume will continue to move on-chain. Stablecoin payments will surpass $8trn, cementing their place as a core global payment rail.

The rise of the stablecoin orchestration layer

If 2023 was the year of blockchain infrastructure upgrades, 2024 is the year of blockchain abstraction. As regulatory frameworks bring trust to stablecoins, more businesses are keen to use them. But they don’t want to have to worry about which blockchains to choose, or how to manage gas fees or wallet configuration. Enter: payments orchestration for stablecoins. Companies like BVNK will gain prominence in 2025, providing critical infrastructure that makes sending and receiving stablecoins feel as easy as bank payments.

Millions of global gig workers get paid in stablecoins

Global payouts will be the standout use case for stablecoins in 2025. In 2024, we saw the rise of stablecoins as a B2B payment rail, with PSPs and enterprises settling their international partners & merchants quickly in stablecoins. In 2025, we’ll see the rise of stablecoins as a global payout method for individuals: as marketplace platforms enable their international creators, sellers, hosts, and contractors to get paid faster in stablecoins.

Clearer rules for crypto bring fresh competition

We’ll see greater global harmonisation of rules around stablecoins in the world’s major economies in 2025. The US and the UK will pass new regulation, as they compete with places like Singapore, UAE and Europe to become hubs for digital asset innovation. Stablecoin regulation will bring a new wave of competition and fresh energy to the ecosystem. In Europe, we’ll see more MiCA-compliant regulated stablecoins offered, and new paths to market, where stablecoin issuers could enter into partnerships with Europe’s EMIs to issue MiCA-regulated stablecoins. Globally, we’ll see bifurcation in crypto policy, as regulators tackle stablecoins first as a form of electronic money, before moving onto more complex crypto use cases.

The year that non-USD stablecoins gain ground

Today 99% of stablecoins by market cap are US dollar-denominated. But increasing global regulation around stablecoins is unlocking non-USD stablecoins. Emerging rules in places like Europe and the UK will see Euro and GBP stablecoins gain traction in 2025. We’ll also see more providers offering local on and offramp between stablecoins and local fiat currencies, creating deeper, liquid markets for stablecoins internationally.

Mike Logan, CEO, C2 Data Technology

Cybersecurity, at its core, is about the protection of data. Banks used to be held up by bank robbers for cash, now all types of organisations and individuals – are held up virtually, for data the new cash. Without a clear data security strategy organisations run an increasing risk of becoming victims of data robbers.

In 2025, we expect financial services organisations to face more challenges in the number and sophistication of cybersecurity threats that can be only alleviated by taking a data-centric security approach.

Payment sector companies need to bear in mind that while AI and Machine Learning will create new opportunities for efficiencies and ways of working, they’re doing the same for cybercriminals. AI and Machine Learning use in cyber-attacks will most certainly increase in 2025 and this needs to be accounted for by organisations who need to evolve their data privacy programs to be more mature so they can respond quickly to new threats. Deepfake phishing and adaptive malware are examples of sophisticated attacks that are now being employed to target banking and finance customers faster and more easily. Businesses will need to anticipate these evolving threats by implementing advanced AI-driven cybersecurity measures.

It is anticipated that 2025 is the year of quantum computing breaking traditional encryption methods, potentially rendering them obsolete. Post-quantum cryptography (PQC) will be essential to protect data integrity and privacy in the future. Thankfully, your average cybercriminal isn’t using quantum computing today, but government agencies are. Adopting quantum-resistant algorithms early is not yet the norm, but as quantum computing accelerates with more practical applications, the need to adopt it will increase.

We expect homomorphic encryption will become more mainstream, allowing sensitive data to be analysed without exposure to potential breaches by being processed without decryption. Federated Learning will also be adopted more widely. This machine learning method allows models to advance by using data from multiple devices, and without centralising data, thereby reducing the need for data sharing while still leveraging AI insights.

Recommendations

• Audit your organisation’s technology. Are you using technology designed for today’s challenges? Security by obscurity will no longer work in today’s interconnected business environment. By the same token, yesterday’s technology will not help your financial services company respond to the evolving and complex cybersecurity challenges of today, 2025, or 2030. To protect your organisation, it’s critical that you employ data privacy solutions that are addressing the evolution of cybercrime and have robust roadmaps that proactively prevent data breaches from happening in the first place, rather than just reacting to them.
• Ask for help! Automation and AI can help fill the skills gap in your organisation, use it. If your team is not prepared to take on the new challenges that data security presents, don’t risk it. Work with trusted experts who build solutions that can reduce your risk, remove manual efforts, and scale with your organisation. Automate, automate, automate…
• Always be evolving. You know your business better than anybody so it is up to your organisation to move along data privacy maturity curve as fast as possible. The more your organisation knows and understands the better positioned your company will be to face the data security challenges ahead.

Steven Webb, UK CTO, Capgemini

In the coming year, a key part of the drive to better govern AI will be tackling unauthorised AI usage. Our research indicates half of the organisations that currently have Gen AI policies for employees are still reporting unauthorised usage in the workplace, and a significant proportion of enterprises don’t have any such guidance in place. Unregulated use of Gen AI poses various risks, including functional errors, security breaches, and legal issues such as hallucinated code, code leakage, and intellectual property concerns.

As a result, we should see new data governance processes for AI systems. This includes introducing pre-defined protocols for data fed into the Gen AI models, rolling out policies on the source, usage, access, and processing of Gen AI data, as well as standardising generative AI use cases across multiple applications.

Hannah Fitzsimons, CEO, Cashflows

2024 was declared the ‘Year of the SME’, but there has been little relief for the UK’s small businesses after years of economic headwinds. With the Autumn Statement now behind us, there is increased pressure for SMEs heading into a new year, and little change expected on the macroeconomic scale – energy and fuel prices aren’t about to significantly reduce any time soon. What’s more, the US is rumoured to be imposing tariffs on foreign imports that could see the UK-based businesses who export to the country, 84% of which are SMEs, unable to do business there.

However, while we can’t predict the economic outlook, and with every tough period comes prosperity, we have our key role to play in helping our nation’s SMEs evolve and grow. With that said, I believe this year we’ll see even greater appetite for better, more reliable sources of funding. Having to wait to be paid for work that your company has done or products that you have delivered is something that affects entire supply chains, making every company down the line have to pay their suppliers later. So, I see a greater need for responsible, business financing solutions that allow businesses to secure funding almost instantly by being pre-qualified. If 2025 is set to be another year of low growth then these services will be invaluable.

Ronald Chan, Chief Investment Officer and Founder, Chartwell Capital

While investor confidence remains fragile, its depressed valuations and income potential make it a compelling market to watch despite a challenging recovery path.

Japan, on the other hand, benefits from fund flows from the Western world and promising growth in the small and mid-cap space, supported by the regulator’s ongoing push for corporate reforms to improve return on equity. The Japan 225 has shown resilience, driven by optimism for equity market recovery and improving fundamentals. However, risks remain, including potential Bank of Japan interest rate hikes, US-China trade tensions, and domestic political instability, which could increase market volatility.

Despite macroeconomic headwinds, such as China’s slowing growth and regional uncertainties, Hong Kong’s valuation-driven opportunities and Japan’s reform-driven growth in 2025 position these markets as my top picks for both sustainable income and long-term capital appreciation.

Betsy Dorudi, Head of Public Policy, ClearBank

2025 will be a fascinating year from a policy perspective. Open Banking is moving further into the mainstream with initiatives like the Data (Use and Access) Bill and FCA-led commercial models boosting its uptake and supporting competition in retail payments.

In the realm of digital assets, 2025 is set to be a year of consultation. The publication of HMT’s stablecoin legislation and FCA’s digital assets consultation will reignite debates on commercial, financial crime, and conduct aspects. However, with the regime not expected to be completed until the end of 2026 or later, there’s a risk the UK could fall behind other jurisdictions.

Faster Payments upgrades are also on the horizon. After delays and the cancellation of the New Paper Architecture plan, HMT is expected to work with regulators and the industry to identify and deliver enhancements to the Faster Payments System by the end of 2025.

Lastly, regulators are being challenged to regulate for growth. Chancellor Rachel Reeves has stated that regulating for risk has “gone too far” and has directed regulators to focus on growth, which will raise questions when it comes to long-contested rules like MREL capital rules for growing banks.

Sean Forward, Business Manager, Digital Currency, ClearBank

The rise in stablecoin usage has attracted attention in emerging markets and traditional finance institutions, which are now grappling with the promise and challenges that stablecoins present. The recent news of Stripe acquiring Bridge has cemented stablecoin’s position as a new way to move money domestically and internationally.

As we move through 2025 and beyond, the cross-border payments landscape will continue to be defined by innovators testing and learning. We will soon reach a tipping point for stablecoin use in payments. But to truly realise the benefits they bring to wholesale payments will require banks to step in and deliver the infrastructure to support them. Otherwise, they run the risk of being sidelined by firms that create momentum in retail payments and look to shift that experience over to wholesale markets.

Charles McManus, Chief Executive Officer, ClearBank

According to McKinsey, the global cost of payments will reach a staggering $3.1trn by the end of 2028 — a figure that could and should be significantly reduced. The path to lowering these costs lies in investing in robust digital infrastructure, enabling real-time, secure, and seamless payments.

The payments ecosystem has made significant strides, particularly with the rise of fintech. However, many systems are still constrained by legacy infrastructure that cannot support the instant, 24/7 payment demands of modern economies. For example, the need for the UK’s New Payments Vision and the scrapping of the New Payment Architecture underscores the challenges of domestic authorities in implementing forward-thinking systems on outdated foundations.

Globally, efforts like Europe’s single payment scheme and the US push for faster payments highlight the struggle to unify fragmented payment networks. Technology offers solutions: blockchain, tokenised deposits, and AI-driven routing are poised to enhance efficiency, security, and reliability. Bank-issued stablecoins, for instance, could revolutionise digital clearing in wholesale markets by reducing friction and enabling instant settlement.

To realise a future where payment costs approach zero, stakeholders must prioritise digital innovation. By addressing back-end inefficiencies and embracing tools like AI and blockchain, we can create a trusted, real-time payment ecosystem that benefits consumers and businesses alike.

Matt Roberts, Head of Data Science & Analytics, ClearBank

The big industry focus right now is agentic AI – whereby AI agents or bots are able to complete actions and interact with other AI agents to complete more complex tasks. This approach allows tasks to be divided into manageable parts, like having different agents act as product owners, developers, and testers for a project.

Looking ahead, I expect to see greater focus on smaller, more efficient models. While the market has until now largely focused on increasing model capacity, we may now be reaching a plateau. New releases from major players show less significant improvements, and there’s little differentiation among them – they are continually switching places on various assessments and public leaderboards. Currently using GPT-4 for simple tasks is like using a cruise ship to deliver a sandwich.

Additionally, we’re expecting more information on the EU AI Act and its components like Horizon EU and High Performance Computing, likely driving companies to offer services to align with these laws. Governance and ethics is certainly a growing focus area (as it should be) – if we take work away from skilled individuals and put it in the hands of AI, without enough training or experts who understand AI, there is a greater chance of negative outcomes for customers. Robust AI training should be on the roadmap for every financial institution.

Oliver Thornton, Head of Sustainability, ClearBank

In 2024, the ARA and FCA tightened greenwashing policies, leading to increased enforcement to protect consumers from misleading claims. This creates opportunities for genuinely sustainable products and services to stand out as consumer awareness grows.

The EU’s Corporate Sustainability Reporting Directive (CSRD) will require more companies to invest in visibility of value chains, stakeholder engagement, and management of sustainability risks. In the UK, companies will assess ethnicity and disability pay gap data ahead of proposed disclosure requirements, potentially accelerating the use of DEI data.

While a key challenge in sustainable finance is ensuring transparency and traceability between financial transactions and real-world sustainability, blockchain technology can help address this challenge, and significant advancements are expected in 2025 and beyond.

Bernard Wright, Chief Information Security Officer, ClearBank

The dynamic security landscape will certainly continue into 2025. The geopolitical climate is becoming more volatile, so ensuring the basic cyber security practices are in place remains business critical. The current climate has also increased the ‘insider’ threat risk – the potential for an insider to use their authorised access or understanding of an organisation to harm that firm.

Focusing on technological advancements, post-quantum cryptography – the defence against potential cyberattacks from quantum computers – is a rapidly evolving field, and building understanding around this should be a big focus for organisations in 2025. And while quantum computers may seem a long way off, there are already a lot of vendors who are starting to produce cryptography solutions that are resistant to attack by quantum computers. Organisations need to start considering their migration to these kinds of solutions well in advance of the threat materialising – the crucial first steps are to fully understand what cryptography is used throughout a business and how.

Social media targeting has also become very sophisticated and will become more prevalent next year, focusing on specific individuals in businesses. AI and Deepfakes will make this a much more challenging area for users to ensure they do not get caught out and the associated controls will need to work hard to keep pace with the change.

Rich Bayer, UK Country Manager, Clearpay

Mobile-first commerce will drive payment innovation

By 2025, mobile-first commerce will continue to redefine how consumers engage with retailers and payment solutions. With mobile commerce retail sales in the UK projected to grow to £109 billion by 2027, this trend is being driven by Gen Z and Millennials, who increasingly shop online, via apps, and through social media platforms. Financial services and retailers must respond by integrating flexible and seamless payment options at the checkout, ensuring they align with consumers’ digital-first expectations.

Social commerce is also playing an increasingly important role in shaping consumer behaviours. Platforms like TikTok and Instagram, which 45% of Gen Z respondents cite as major influences on purchasing decisions, demonstrate the growing importance of meeting consumers where they shop. Payment innovation that supports mobile and social commerce will be critical for retailers to attract and retain these digital-native audiences.

Iana Vidal, Director of Public Policy and Regulatory Affairs, UK & EU, Clearpay

Regulation and CCA reform will drive BNPL consolidation and sustainable growth

By 2025, the finalisation of BNPL regulation and the anticipated reform of the Consumer Credit Act will provide much-needed clarity and consistency for the sector. These developments will likely drive consolidation within the market, as providers align with new compliance standards and adapt to a more structured operating environment. Regulatory clarity will help foster trust among consumers and create a more transparent and sustainable foundation for the future of BNPL as it continues to grow at pace as a cornerstone of the British FinTech ecosystem.

Joseph Arrage, co-founder and CEO, Clip Money

Many consumers in North America use cash for in-store purchases and will continue to do so in 2025. To accommodate this need and stay competitive in the coming year, businesses must not neglect their cash management processes. We expect that businesses, including retailers and restaurants, will move away from outdated, manual methods in favour of modernising and digitising their cash deposit processes to minimise the time, resources, and costs of dealing with cash payments.

Brian Bailey, President, Clip Money

As we look to 2025, the retail landscape will be influenced by a growing push for cash discounting, as businesses fight back against rising interchange fees. Additionally, we expect that closed cash ecosystems will emerge as a strategic lifeline for retailers, offering convenience and cost savings while reducing their dependence on costly bank visits. With banks imposing higher fees on everyday cash transactions, the pressure will mount on retailers to adopt new solutions to reclaim value from an increasingly complex financial environment.

Tony Whincup, Head of Investment Specialists, Close Brothers Asset Management

Artificial Intelligence (AI), interest rates, Trump: with hindsight just a handful of words may arguably sum up markets in 2024. True, the horrors of war in Ukraine and the Middle East were writ large in the news and the human cost of so many lives ended and upended – disturbing and brutal – may impact markets yet. True, Labour’s first Budget in 14 years will be consequential for businesses and individuals alike, but markets greeted fiscal plans with relative equanimity. Of all, Trump 2.0 suggests we are entering a new geo-political paradigm with far-reaching consequences until 2029 and beyond.

As 2024 unfolded, it became more likely that the US would avoid a recession. A so-called soft-landing scenario in which policymakers tame inflation with higher interest rates without destroying jobs and crashing the economy appears to be playing out. In major economies (excluding Japan), inflation has cooled and central banks are responding by relenting on interest rates. All major central banks have now cut interest rates at least once. We’ve likely hit peak rates but the journey down won’t be smooth: data-dependent policymakers and frequent data revisions will jolt markets in 2025 as they did this year.

In 2024, the world’s second largest economy, China, left investors guessing what it might do to revive itself. In October, policymakers eventually unleashed a package of measures over coming years potentially totalling 10 trillion yuan (~$1.4trn) to resuscitate the property sector, support equity markets and restore confidence to both domestic and international investors. Investors responded in particular by pumping an unprecedented amount of cash into Chinese equities. This stimulus may be consequential and successful. China is grappling with a sensitive transition from an export-lead economy to a more domestically-focused one with unhelpful demographics, and will probably undershoot its “around 5%” GDP growth target for 2024.

Global GDP growth has been acceptable, if muted. We expect around 3.2% GDP growth in 2024 and 2025 with a resilient US (+2.1%), better-than-excepted UK (+1.4%) and Eurozone (+1.3%) all growing in 2025. Unemployment hovers around 4% in the US and the UK and around 6.3% in the Eurozone. Inflation (as measured by the Consumer Prices Indices or CPI) is forecast to be between 2.0% and % in these economies in the nearterm, with ongoing concerns for Russian gas supplies feeding volatility in the Eurozone. Consumer confidence has ebbed with local factors such as the UK’s Autumn Budget and US election delivering mixed surveys – but reality is likely better than sentiment.

In Europe, Germany’s travails continued with the collapse in November of its three-party coalition imperilling Chancellor Olaf Scholz. Germany’s economic malaise sees it teeter towards recession. After a euphoric Olympics, France’s budget drama toppled Prime Minister Barnier’s government and infected markets: at around 0.80%, the spread (or difference) in yield between France and Germany borrowing 10-year money stretched to its widest level since 2012. So-called ‘bond-vigilantes’ – bond traders who sell government debt in response to fiscal policies, thereby driving its yield up – are clearly signalling that to lend to France they want to be compensated for taking additional risk. With no election possible in France until July 2025, expect more inertia and realpolitik: plus ça change.

The advance of the far-right in France, Germany and Austria will shape the EU narrative on key issues including immigration, border control and jobs. Scapegoat politics will reassert itself. For the UK, a new Labour government appears keen-ish for a rapprochement of sorts with the EU. Time will tell whether a potential Swiss-style EU-UK relationship will ease friction and reap economic benefits.

Trade wars were a constant drumbeat in 2024. Canada, the US and Eurozone slapped punitive tariffs on heavily subsidised Chinese electric vehicle (EV) imports of up to 100%. Critical goods in sensitive industries – including active pharmaceutical ingredients, lithium and some minerals – face restrictions as governments pressure and incentivise companies to on-shore, friend-shore and near-shore. President Trump will arguably accelerate this from 2025.

Despite this tricky backdrop, major equity markets – including India’s Sensex, Japan’s Nikkei 225, the US’s S&P500 and the FTSE100 – made all-time highs in 2024.

In the US, the fortunes of a handful of tech-titans – including Microsoft, Apple, Amazon, Alphabet and Nvidia – continued to support markets in 2024, although the outsize weights of these mega-caps caused widespread volatility.

Discerning between AI winners and also-rans remains a key theme into 2025. Certainly, not owning AI-exposed companies in 2024 has required courage by investment managers, whilst excitable investors have pushed many names to stretched valuations only to punish even mildly disappointing results. Some two years into a bull market since the S&P500 last troughed in October 2022, more sectors will likely need to participate to sustain the current rally into 2025.

Other breakthroughs also captured investors’ imaginations in 2024. We watch the efficacy of novel weight loss drugs (which influence insulin and glucose production, digestion and appetite) with excitement and caution. And we’re mindful of old-fashioned assets quietly breaking all-time highs: gold briefly surpassed $2,700 per ounce on geo-political risk, central bank and retail buying, and less competition from yield-producing assets like cash as interest rates fall. Fixed income has been quietly delivering an attractive yield from quality and mostly short dated maturities. And the variety of alternatives means there are many compelling contenders for a multi-asset portfolio.

Jon Boland, General Manager, Clover UK 

In the payments industry, 2025 will be all about providing flexibility and convenience for both merchants and consumers. Offering a variety of payment options provides a quicker and smoother experience for customers, while also boosting customer loyalty. POS systems will need to cater to a wide range of business needs, with enhanced features and capabilities.

This same consumer demand for easy and convenient payments will likely result in a surge in contactless and unattended adoption, which will additionally benefit businesses by reducing labour costs.

The focus on generating simplicity and efficiency in the payments process, coupled with providing transparency for customers, is already driving regulatory developments. The industry is eagerly awaiting PSD3, expected to be unveiled early next year. These regulations will likely strengthen customer authentication, increase the security of payments, and protect consumers’ personal information.

Accessibility will be another key factor driving payment features in the coming year – the industry will focus on creating an inclusive payment experience for all users, and ensuring that everyone, regardless of physical ability, can easily and securely manage their transactions.

For example, we’ve partnered with the Royal Institute of the Blind to make the Clover Flex 4 compatible with the needs of blind and visually-impaired individuals.

We’re particularly focused on restaurants and hospitality, and restaurant owners will benefit from features that simplify order management and inventory tracking. Offering features such as split bills, mobile wallets, and loyalty programmes, will also enhance customer experience allowing restaurants to retain and attract customers.

Agnieszka Kulińska, partner, Clyde & Co

As the shadows cast by the Russia-Ukraine war stretch into a third year, Europe’s energy security landscape will continue to be reshaped with the EU continuing to pivot toward renewable energy production. In 2023 alone, 56 GW of capacity in photovoltaic installations and 17 GW in wind farms were commissioned across the Union.

This is driven by a strategic imperative as much as an environmental one, with the EU setting ambitious targets to reduce dependency on imported fuels. Member states are rallying behind renewable power, marking a concerted effort to strengthen the continent’s energy security while meeting ambitious climate goals. According to data from the European Commission’s Impact Assessment Report, increased renewable energy production enabled a reduction in gas consumption by 15% and coal consumption by 26% in 2023.

Legal and regulatory considerations involve the refinement of electricity market designs to accommodate greater renewable energy capacity, ensuring a stable, reliable, and efficient electricity system. The expansion of renewable and carbon-free energy sources is also expected to help relieve upward pressure on energy prices.

Moreover, Europe has recently recognized the potential of developing distributed energy through local balancing areas. For instance, renewable energy installations combined with energy storage systems can balance energy production by ensuring power supply to a given area at specific times. Such projects are expected to become increasingly common.

Chris Leadbetter, partner, Clyde & Co

The Future Homes Standard, expected to come into effect by 2025, sets ambitious performance targets for new homes to significantly reduce carbon emissions.

From a market perspective, this will likely raise the bar for developers and attract investment in technologies and materials that align with these standards. The rigour of new regulations will challenge the industry while also opening the door to innovation. Homeowners may find increased long-term value in homes that promise sustainability and energy savings, reshaping demand patterns in the residential property sector. Time will tell whether mortgage companies, banks and insurers need to offer preferential terms for these more efficient homes so as to meet their own sustainability and climate change targets.

Contractors and housebuilders must consider whether their supply chains need adapting or updating so they can meet the Future Homes Standard, including in relation to heat pump technology. The Future Homes Standard is intended to reduce carbon emissions from compliant homes by 31% from those produced by current standards and so will have a marked impact on how housing projects are delivered in practice. Contractors and housebuilders will need to be ready to properly price the work needed to meet the new requirements.

For investors and developers, adapting to the Future Homes Standard will be critical. Legal advice across the industry will increasingly revolve around compliance and best practices in sustainable development. The alignment of the government’s investment initiatives with the Future Homes Standard means that the residential property market is likely to be moving towards a future that balances economic growth with environmental stewardship. This reflects the UK’s commitment to a greener economy and offers fertile ground for investments that echo this shift.

Jan Spittka, partner, Clyde & Co

With the EU’s Digital Operational Resilience Act (DORA) set to become applicable in early January 2025, cybersecurity and digital robustness will have an even more prominent role on the market’s financial stability than it did before. Insurers and other stakeholders in the insurance sector will be mandated to implement comprehensive measures to increase their digital operational resilience and therefore mitigate cyber threats and manage IT third-party risks. This is no small feat in an industry that thrives on the management of risk and the safeguarding of assets.

DORA places a clear emphasis on proactive defence. It will catalyse a shift towards greater transparency and accountability, as insurers will be expected to report major IT-related incidents with a level of detail previously unseen. This transparency is not just for the regulators’ benefit; it will enhance consumer trust in an industry where confidence is the currency.

While regulatory interventions are often met with scepticism and resistance, this Act will ultimately raise resilience in the insurance industry, drive cyber innovation and, in turn, improve competition by harmonising the existing, disjointed frameworks across the region.

Ton van den Bosch, partner, Clyde & Co

Southeast Asia’s emergence as a pivotal manufacturing region is as much about savvy legal and regulatory evolution as it is about economic strategy. Nations are enacting forward-thinking reforms to draw in global manufacturers looking for stability within the upheavals of international trade and intensifying geopolitical tensions.

Vietnam, Indonesia, the Philippines, Thailand and other ASEAN countries are developing legal landscapes that promise clarity, ease of doing business and investment protection. Regulatory developments include streamlining business registration processes, strengthening protections for intellectual property, developing tax incentives for industries, employment law reforms and the easing of foreign ownership restrictions.

The harmonisation of regulations within ASEAN is transforming the region into an ever-closer market, reducing barriers to cross-border trade and investment. This is bolstering the appeal of the region as companies recalibrate their supply chains in search of jurisdictions with fewer hurdles and, ultimately, less exposed to geopolitical volatility.

Intellectual property rights are receiving particular attention, with individual countries ramping up their legal protections to reassure foreign investors and align with international standards.

Igor Kozintsev, Vice President, CMA

Five payment trends in emerging markets for 2025

To keep up with the rapid pace of change in the international payments landscape, CMA foresees an ongoing focus in emerging markets on the modernisation of domestic payment systems, as well as growing interest in cross-border payment initiatives between countries in different regions.

Five key trends include:

Deployment of next-generation RTGS systems

A growing demand for better liquidity and risk management support, including liquidity saving mechanisms that lower liquidity costs for all RTGS participants, requires a more modern, open approach. Central banks are also increasingly looking at extended RTGS operating hours to facilitate the settlement of transactions outside of business hours and during national holidays to avoid settlement delays.

In addition, to foster increased competition and innovation in payment services, there’s a growing desire for central banks to onboard non-bank payment service providers to RTGS systems, and also to consider how to orchestrate linkages from RTGS to cross-border payment systems and to prepare for the potential introduction of CBDCs.

Expansion of instant payment systems

Central banks are keen to promote increased financial inclusion by providing easier access to instant payment services. Areas of interest include support for unified QR-codes, offline payments, request-to-pay, pre-validation of payee, and other value-added services. Effectively there’s the potential to implement a range of user-friendly instant payment services that improve the customer experience, similar to those that already exist within card payment systems.

Replacement of ACH systems

The modernisation and extension of RTGS systems, coupled with the deployment of instant payments systems is diminishing the ongoing requirement for separate, batch-based ACH payment systems within emerging economies – particularly for those countries that handle relatively small daily volumes of retail payments. Some are questioning whether they need to continue operating a separate ACH system, and whether these payments can easily be re-routed and handled more efficiently as part of a modernised RTGS and IPS infrastructure.

Developments in CBDCs and digital money

While overall, discussions around central bank digital currencies reduced somewhat in 2024, interest has not gone away. Emerging economies will continue to watch developments in CBDCs so that they can be ready to respond. Part of the challenge, however, remains a lack of common standards around CBDC implementation. We expect discussions and pilot projects to continue but think it unlikely we’ll see significant growth in the volume of real CBDC transactions in the year ahead.

Growth in cross-border payment initiatives

Regional and international initiatives to create real-time remittance and cross-border payments corridors will continue, with a focus on how industry standards and best practices can support in achieving true interoperability across both national and international payments systems. While the CBPR+ ISO 20022 protocol is becoming a common standard, concerns remain around regulatory differences between participating countries, compliance issues, and access to sensitive payment information by third parties, including network providers and system operators. There’s also a need to agree risk mitigation rules, final settlement procedures and more.

Due to the diversity of cross-border payment options – within ‘closed user groups’, regional and worldwide – CMA sees that an ‘integration’ module, hub or similar application may be necessary at a domestic level, helping to solve ‘orchestration’ tasks, such as messaging formats, business flows, payments corridors, connectivity and more.

Underpinning many of the above trends, we also see increased deployment of advanced technologies such as artificial intelligence (AI) and distributed ledger technology (DLT).

Nageswar Cherukupalli, SVP Financial Services, Cognizant

2025 will be the year financial firms realise if they want to make the most of generative AI they need to lay the groundwork. This means many firms will be focused on upskilling staff, getting the right data foundation in place and preparing for future regulatory changes. Once these considerations have been made, we can expect to see the real use cases of generative AI start to emerge.

It’s time to upskill

Cognizant’s recent New World New Work report found at least 90% of jobs would see some impact from generative AI. In financial services this is going to focus on roles like contact center agents and bank tellers. But, workers should not think this means they are going to be replaced. In many cases generative AI will be used to augment their roles to make them more productive. However, to achieve this goal firms also need to upskill workers. Considering 32% of financial institutions identified skills as a major obstacle in achieving their AI goals it is crucial this process starts as soon as possible.
Throughout 2025 financial firms will focus on ensuring the workforce has the right diversity of skills to truly make use of new generative AI tools. For example, strong soft skills like critical thinking, creativity and communication will become vital to identify new problems and use cases where generative AI can add value.

Build the right data foundation

Generative AI needs access to the right data if it is to work effectively. Banks have made great strides in this area. However, achieving data maturity is still a work in progress. For instance, Cognizant found while nearly all decision makers in financial firms expect generative AI to fundamentally change their organisations, only 17% give their companies high marks for data maturity.
There is no need for firms to panic yet, with 2025 and 2026 predicted to be years when banks are still experimenting and preparing their operations for more widespread adoption of generative AI. However, financial firms should not delay any further. Organisations need to start work now to clarify their data capability pathways. By creating a strong structure firms will ensure data, both inside and outside the network, is stored and accessed in the right way to be of use. In this process firms must also offer more transparency around how AI systems are using this data to reach its decisions.
Firms will also make greater use of different forms of data than before. For example, structured data only makes up around 10% of data within firms, with the other 90% including items like pictures, videos, emails, and chat messages. With generative AI, more information can be pulled from these sources, enriching companies’ capabilities.

Responding to evolving regulation

The EU launched its AI act to help moderate high risk AI models, and the US issued an executive order on AI use in 2024. However, as more companies begin to adopt generative AI concerns will only grow from the public and governments over how firms are using these AI tools and customer data.
Financial firms will need to set themselves up to respond to any changes in regulation over the next year. For example, ensuring they can provide traceability around the reasons why generative AI models have made a decision will be essential.

Actual use cases will emerge

As financial firms put the groundwork above in place it will become clearer as to where generative AI can add value. For example, 45% of financial workers view generative AI-powered virtual assistants as extremely valuable to their company. Likewise, 36% believe it will be extremely valuable for financial document search and syntheses and personalised financial recommendations.
Financial firms will also move from the traditional approach of focusing on a single modality, whether language, image, or sounds to newer models which will seamlessly combine all of them. This will unlock more creative, and adaptable use cases across the business as a whole.

Looking ahead

Generative AI is at an inflexion point. However, financial firms should not be put off from starting their journey towards full adoption. The next year will be foundational in ensuring they will become a modern, competitive business powered by generative AI. Firms that fail to listen to these trends will fall behind the rest of the pack.

Anthony Yeung, Global Head of Strategic Development, CoinCover

While many people are dipping their toes into crypto for the first time because of the bull run, people should remember that prices can come down just as fast as they go up. Crypto is volatile by nature and the bear market will return sooner or later. The challenge that exchanges will face in 2025 is maintaining longer term customer engagement over investors seeking short-term gains and withdrawing funds as soon as they feel the value of their assets decreasing. Exchanges need to create an environment that encourages users to see the value in remaining active in the long term. Demonstrating a commitment to the security of customers’ assets and adopting traditional financial practices around governance and risk management will be key to this mission.

The number of crypto users is set to continue growing in 2025, and while many people are drawn to the market by the prospect of lucrative returns, they should also take the time to educate themselves around the risks. One of the most important trends that investors should be aware of is the correlation between new market entrants and a rise in malicious activity. Those engaging with digital assets for the first time are often the prime targets of phishing scams, so it’s vital that investors remain vigilant to these threats and use platforms that adhere to the most stringent security standards.

Paula Grieco, SVP, Commonwealth

As has been the case historically, powerful emerging technologies have the unprecedented potential to shape the future of people’s financial lives, often in ways that will be with us for decades or longer. Because of its transformational nature, AI provides new and creative ways to improve financial security and opportunity for all, but also carry new risks if distributed unevenly. Some populations may use emerging technology to get ahead, while others could be left out of the system.

To achieve the promise of these technologies for all, Commonwealth is focused on ensuring that the needs of financially vulnerable people are understood, visible, introduced into relevant conversations, and integrated into solutions. Ultimately, our vision for this work is that financial services leaders, fintech entrepreneurs, social impact innovators, nonprofits, and others shaping the financial system act to harness these powerful financial AI to serve this untapped consumer segment, benefiting both financially vulnerable people and their businesses.

The rapid development of financial AI over the last five years, together with a strong interest in this technology expressed by leaders at major banks in interviews with Commonwealth, has led us to focus our research on conversational AI, including both existing natural language processing chatbots, and the next generation of generative AI. This is an area ripe for innovations to address the financial needs of low to moderate income people (LMI).

In studying these technologies, our goal has been to understand the needs, wants, and aspirations of people earning LMI and the goals of financial services providers, and provide actionable insights where these two areas intersect. We are at a critical inflection point in scaling generative AI, and it is urgent to identify the ways in which AI can positively impact the financial lives of people earning LMI. Our findings point toward promising future directions for a better understanding of how this technology’s continued development can best support the needs of these households.

Conversational AI

Conversational AI provides a key opportunity to improve access for households living on LMI, who are nearly twice as likely to want to bank through in-person conversations and yet have significantly lower rates of access to local bank branches. Conversational AI can provide the personalised and context-sensitive support this group seeks at scale in a way that has never been possible before.
There is a significant untapped opportunity for providers to leverage chatbots, particularly those leveraging generative AI, to improve financial outcomes. Commonwealth research found that 57% of users in a field test study said using chatbots improved their financial situation. The research also revealed the people had a strong interest in credit-building, budgeting, and debt management.
Providers have an opportunity to earn trust with chatbots from people earning LMI. Some of this is specific to the chatbot experience, and some of this is industrywide as the AI technology gains more acceptance and improves in security and quality overall. Our research finds that 63% of people are concerned with chatbot security and 53% with privacy. However, there is significant demand for more capable chatbots able to assist with banking actions beyond providing information. These expanded capabilities will be key to providing value for and building trust with customers living on LMI.

Looking ahead

We see exciting potential for generative AI applications and AI co-pilots to provide personalised support at scale to customers who have typically lacked access to consumer banking tools such as tailored financial advice, credit building, and investing. We also see the technology supporting back office processes and customer service agents throughout the financial services industry, which will save time and increase the efficiency of the growing scale of AI systems.

Iain Armstrong, Global Regulatory Affairs Practice Lead, ComplyAdvantage

Financial institutions face a new threat to their bottom lines – and reputations – as regulators ramp up the pressure on corporate transparency. Expect to see greater compliance resources spent on beneficial ownership.

The legally binding beneficial ownership registration requirements introduced by the Corporate Transparency Act came into force in the US on 1 January 2024. Despite this, uptake has remained lower than expected due to limited awareness of the requirements.

In the UK the registrars of Companies House now also have greater powers to ensure information is reported correctly. In an October 2024 threat assessment, the CEO of Companies House said, “It is almost certain that the scale of money laundering through UK limited companies is underestimated,” and noted that the body would no longer be “a passive acceptor of duly delivered documents.

Across both sides of the Atlantic, beneficial ownership registries and reporting requirements have been beefed up in recent months. This reduces the risk of false reporting by illegitimate companies and shows legitimate firms that enforcement agencies see beneficial ownership data as more than a nice-to-have add-on to their ‘more serious’ due diligence requirements. With regulators having focused in 2024 on information-based campaigns to educate firms on their requirements, as we head into 2025, we expect to see greater implementation through enforcement — for example, reprimands and even financial penalties. These could hit firms’ bottom lines and pose a reputational risk if enforcement actions are covered in the media.

Public-private partnerships will make an important leap forward in 2025 – if compliance professionals get their way

 47% of compliance professionals said stronger public/private partnerships and data-sharing protocols would have the greatest impact, while only 38% said larger fines. ComplyAdvantage’s 2025 State of Financial Crime report (full survey results to be shared in January) shows that global compliance professionals do not believe fines are the best way to improve the enforcement of anti-money laundering regulations.

If fines were the answer to all regulatory enforcement challenges, every financial institution would function perfectly. As we all know, that isn’t the case. While we believe government bodies like the National Crime Agency and OFAC would benefit from greater resources, one silver lining to the current situation is the need to ‘do more with less’ and find creative ways to improve enforcement. Our survey shows public/private partnerships – which have enormous wider strategic value in fighting financial crime – could support on enforcement too.

Andrew Davies, global head of regulatory affairs, ComplyAdvantage

As consumer adoption of real-time payments accelerates in the US, non-banking providers are ready to access payment rails and drive further innovation in the sector.

There is a notable gap between financial institutions’ and customers’ taking advantage of real-time payments. For instance, financial institutions’ adoption of the FedNow real-time payment service has risen by more than 2,100% in the last 12 months, yet real-time payments still account for less than two percent of U.S. payment transactions.

This indicates that while the infrastructure is now largely in place, more needs to be done to educate and inspire consumers about the opportunities surrounding real-time payments. Given the higher uptake levels in other developed economies, there is no reason to think US consumers won’t also take greater advantage of faster payments in 2025.

All the ingredients are there for accelerating real-time payments in 2025. The US also remains the only G7 country prohibiting non-banking providers from accessing payment rails. This is an issue that policymakers are looking at, and if we see progress on this in 2025, it could add further fuel to the expansion of real-time payments in the next 12 months by allowing more non-traditional financial institutions – incumbents or emerging challengers –  that can offer consumers real-time payment services without having to open a new account or switch providers, the greater the uptake will be.

With Trump in power, US sanctions will diverge from its European allies, placing greater pressure on Europe to lead and enforce its own sanctions regime

Historically, Western governments have considered the US the leader in implementing sanctions. However, with Trump’s Republicans in the majority across the federal government, such measures will be applied more unpredictably. As a result, we could see major sanctions divergence between the US and Europe in the hottest geopolitical conflicts — Ukraine and the Middle East — for the first time in recent memory.
Donald Trump’s campaign focus on economic protectionism could even make 2025 the year conventional sanctions begin to be replaced by tariffs. The efficacy of many sanctions regimes has long been questioned, and we know from his first term that Trump sees punitive economic measures as the best way to push for US interests abroad. A convergence of these trends could see the US issue more tariffs than sanctions in 2025.

Azimkhon Askarov, co-partner, CONCRYT

Open Banking will continue to gradually eat into payment card volumes, but nowhere near enough to make Visa and Mastercard quake in their boots. In 10 years’ time, it might be a different matter. Over 2025 in Europe, we’ll see the continued growth of mobile-based instant transfer apps like Blik in Poland and Bizum in Spain. The newly launched Wero wallet in the EU will definitely be one to watch. Europe has been trying to create its own version of Visa and Mastercard for decades, and after many false starts, Wero is already showing significant traction and could be the one that sticks.

The Asia-Pacific region will continue to show the rest of the world how digital wallets can be leveraged for maximum effect. APMs like WeChat Pay and Alipay will become even more widely accepted outside of their home markets.

Edvards Margevics, co-partner, CONCRYT

In 2025, we can expect to see the growth of advanced security features like tokenisation, which gives consumers the peace of mind that the risk of fraud is low and their payment details are protected at every step of their payment journey. Biometric authentication methods, such as fingerprint recognition, facial recognition, and iris scanning, will become even more widely available, and easily embedded into more payment channels. This will not only enhance security, but provide an even more personalised payment journey, and drive worldwide mobile payment revenue.

Andrii Shevchuk, CTO and co-partner, CONCRYT

Merchants will depend on their payment gateways to protect them from fraud and chargebacks more than ever in 2025. Tackling cyber criminals at the very first step is one thing, but key to merchant profitability will be combating false declines to improve authorisations.

As commerce becomes increasingly borderless, payment gateways will become an even more integral part of the digital commerce landscape, and we can expect to see more efforts from acquirers, PSPs, ISVs and others to enhance their gateway offerings with the very latest fraud-fighting technology, including AI, real-time monitoring and geolocation or device identification. Payment gateways will become more than just transaction processors – they will evolve into even more multifaceted platforms that underpin global commerce.

Ryta Zasiekina, Founder, CONCRYT

With fintech funding in flux, and an uncertain macroeconomic backdrop putting the brakes on fintech spending, I believe that 2025 will be a year where angel investors become even more essential for the future growth of fintech. For European fintechs in particular, they will increasingly look to the region’s circa 40,000 angel investors to help them launch and scale.

Firstly, angel investors are more diverse, spanning a wider socioeconomic and career backgrounds than larger institutional investors. Angel investors are more likely to have hands-on, in-depth knowledge of the businesses and verticals requiring their expertise and backing. Many, like me, will also have founded fintechs of their own, so have first-hand experience of the challenges and opportunities facing the sector.

But it’s essential that national governments don’t introduce rules that could threaten investment. The UK government introduced, and then thankfully reversed, plans that would have reduced the number of people eligible to invest in start-ups. We need to encourage more women into fintech, not deter them through short-sighted legislation that could restrict funding when fintechs need it.

Claire Gates, the head of payments, Crown Agents Bank

Cross-border payments will continue to dominate the payment space

We will continue to see growth in cross-border payments as international trade for both business-to-business (B2B) and business-to-consumer continues to thrive. However, given the increased number of providers in the space and reduced growth rates, competition will intensify putting price and margins under pressure.

We’ll start to see more investment and innovation around business-to-business cross-border payments as providers of services start to address speed, cost and the opaqueness of such cross-border business payments. Thus, we will see transaction banking start to mimic consumer experiences and expectations.

Consumers expect instant payments in 2025

The focus on instant and real-time payments will continue to resonate with consumers’ expectations globally. This expectation must be met with the corresponding infrastructure across regions trying to keep pace. Cross-border commerce will also drive the demand for real-time payments with many people believing it is a key customer requirement and product differentiator. Care must be taken, regarding the expectations and level of investment made for B2B in this area, given that real-time payments rails were generally developed around consumer low transaction tickets – and for many companies their operational readiness is just not there. I predict we are at least 3-5 years out from this being a reality for B2B payments. Instead, optionality, redundancy, transparency, reliability, and value will resonate in B2B payments.

Real-time payments drive up cost of fraud

Although the advancement of technologies like data analytics and AI have and will enhance the whole payment ecosystem – from customer experience to credit underwriting and ultimately, cost to serve -this technology is also being leveraged by global fraudsters. We have, and will continue to see, fraud increasing globally as the use of real-time payments continue. This cost will become a key topic for payment companies and banks alike because today, the customer experience and product differentiation come from those entities that absorb the value on behalf of the impacted customer. However, this is becoming financially challenging given margin.

Wallets will continue to gain in the consumer space and break into B2B

Wallets will continue to gain traction, and embedded functionality is set to increase. For example, built in BNPL, loyalty, cross-currencies accounts including bit- and stablecoins. Wallets in certain emerging markets, as well as for certain consumer groups, will become substitutes for bank accounts and given that many non-banking wallets have gained more traction this will be a challenge for many consumer banks – who I expect will be on the lookout to acquire successful wallets rich in functionality and with consumer traction.

These wallets, historically a consumer proposition, will start to gain transaction in the B2B space, initially focused on SMBs but migrating to medium businesses quickly. Given the lack of innovation and market distribution in B2B payments, I expect in ’25 to see some movement from both an investment perspective as well as a number of existing and new Fintechs entering the space.

Majority of central banks considering Central Bank Digital Currency (CBDC)

Finally, more than 90% of central banks are pursuing or considering CBDC projects – with 30 central banks having rolled out pilots in Australia, Brazil and France. Banks have yet to be disintermediated by these, but CBDC do provide additional benefits for consumers, who seem to be considering them as just another wallet and we will see them serve as an alternative to large but often opaque private sector stablecoins. An exciting space to watch or play a role in.

Sukanya Madhavan, Chief Product and Technology Officer, Payments, CSG

Financial literacy will grow among youth in 2025 

There’s a perception that today’s young people lack financial literacy and widespread fear that the rise in automation and digital-first options will exacerbate the issue. The reality is quite the opposite. As “buy now, pay later” (BNPL) services, instant payment tools and AI-enabled banking apps grow in popularity, we will see financial literacy rise among young people—and the capabilities of instant and on-demand payment solutions grow in turn.  

These new payment solutions help people make more informed decisions, give them new means to build credit and offer new ways to connect with their money. As young people learn more about money management and new doors open, they will serve as primary drivers of innovation in the payments space. It will be a cycle of education and innovation, with each step to empower young users with enhanced choices and control over their money. These insights will, in turn, drive demand for improvements to capabilities, security and simplicity.   

2025 will be the year of instant payments 

Instant payments—enabled by direct, bank-to-bank transfers—have emerged as an answer to consumers’ calls for faster and more efficient payment solutions. The next 12 months will see the adoption of this approach accelerate sharply across sectors, with the launch of FedNow’s expanded payments umbrella allowing new channels (like mobile and email) to act as touchpoints for instant transactions.  

However, this innovation—like all others in the space—also introduces new and serious risks; in this case, faster transactions mean less time to identify and intercept fraudulent activity. To prepare for this reality, organisations must fortify their infrastructure for real-time fraud monitoring and educate employees and customers to ensure everyone in the process understands any and all risk implications. 

In 2025, brands will reconcile with AI’s complicated caveats 

As corporate AI tools become more accessible and advanced, so will the tools available to bad actors. And with bank-to-bank solutions becoming more common, these faster, more mature cybercriminals will find ways into a larger, more connected attack surface than ever before.  

Security lapses can devastate a business, so balancing AI innovation with security and seamless experiences will be the payment market’s defining challenge in the new year. However, to do it well and at scale, brands will have to first reconcile with the seemingly paradoxical roles AI will play in payments’ future: a facilitator of seamless transactions, a driver of increased risk and the first line of defence against fraud.  

Olly Downs, Chief AI and Technology Officer, Curinos

Banking is one of the most rigorously regulated industries, so adopting generative AI comes with unique challenges. Saying or doing the wrong thing in our space can have serious consequences, which is why the safest, most valuable applications are often behind the scenes, generating creative ideas—something that banks can harness in more controlled, lower-risk ways.

We’re seeing a real hunger in banking to leverage generative AI for a competitive edge. The challenge, though, is that beyond the top five to ten banks, most don’t have the internal resources to build these solutions in-house.

Wealth management is where we’re seeing more advanced applications emerge in the financial sector.

Top banks with emphasis on wealth management are leading this charge with generative AI, particularly in enhancing portfolio recommendations, helping advisors’ better reason with portfolio structures, and deliver a more personalized client experience that was once out of reach. There is tremendous opportunity for AI to elevate wealth management services, however, beyond the big players, there’s still a wide gap, with smaller banks and wealth firms often lacking the resources to build truly cutting-edge solutions. 

But if you look beyond banking, industries like medicine, protein folding, and gaming are exploring AI’s potential in entirely new ways that don’t involve language, video, or traditional media. The future of generative AI in banking will likely follow this trend, solving complex, nuanced problems behind the scenes in ways we haven’t fully realised yet.

Kurt Vogt Gwerder, Director, Strategy Consultant, Curinos

Digital is increasingly the most important aspect of a bank’s value proposition. It is the mechanism through which customers engage, transact, and deepen their loyalty with their FIs. COVID accelerated this trend, with UK digital onboarding rising from 50% to 86%. This shift has led to a significant 40% reduction in physical bank branches in the past five years.

Banks in 2025 have two goals: fix basic digital issues and invest in features that make them stand out. They need to prioritise fixing problems that impact their bottom line, like onboarding and deepening customer relationships. Those that don’t will lose customers. Over a quarter (27%) of customers now switch banks because of the app or online banking experience. Banks also need to find ways to encourage customers to use their digital services more, such as providing rewards programmes and personalised advice.

Nearly four out of five customers (79%) say that good digital banking is the most important factor for convenience. Successful banks recognise this and are prioritising seamless digital journeys for their customers. Via thinking holistically in this way, they’re already seeing both higher customer satisfaction and use of their digital features.

In short, banks need to bolster investment in digital and create a smooth, integrated experience to succeed in 2025 and beyond.

Shachar Bialick, CEO and founder, Curve

Digital wallet wars will be profoundly contested in 2025

2025 will be the year when wallets go head-to-head, with competition fiercer than ever before. It will be a year of hyper-personalisation and greater consumer choice as rising digital wallets challenge the power of giants such as Apple Pay

Digital wallets will evolve from basic pass-through models to sophisticated staged wallets that actively manage and optimise payments, enabling a move from systems which simply facilitate transactions to holistic financial management platforms.

Financial tools will be customised based on users’ unique spending habits, preferences, and goals. This will be backed by bespoke and advanced security.

Consumers will be able to receive credit in a more responsible, yet flexible fashion, as credit scoring evolves to empower more eligible recipients in a fairer way.

Merlin Piscitelli, EMEA Chief Revenue Officer, Datasite

As the year ends and the beginning of a new year approaches, the mergers and acquisitions (M&A) industry is preparing for a shift. From a year filled with geopolitical tensions, technology disruption and multiple national elections, the stage is being set for a more positive 2025 that includes cautious optimism, opportunity and potential.

2024: A year of measured momentum

2024 was anything but a typical M&A year. It included political pivots, as nearly two billion had the opportunity to vote in major national elections, major unrest in Europe and the Middle East, steep financing costs and inflation. As a result, it was a good, but not great, M&A year.

Macroeconomic trends and uncertainty over election outcomes and impacts combined to dampen M&A in the first half of the year. In fact, a staggering 81% of global dealmakers surveyed by Datasite, which facilitates approximately 15,000 new global deals annually, expressed significant concerns about the impact of elections on activity over the next 12 months.

Given this, dealmakers shifted their 2024 strategies to a more measured approach, that included strategic pauses and selective activity. In fact, global M&A hold rates on Datasite climbed 25% in 2024, as election-driven uncertainties triggered dealmakers to hit the brakes. More than four in ten (45%) M&A professionals also extended transaction timelines, reflecting the heightened uncertainty surrounding national elections and potential regulatory and trade policy changes.

Still, despite these pauses and extensions, the UK proved to be a standout performer. M&A activity involving UK companies surged 57% to $306bn, compared to the same period last year, outpacing major European counterparts like Germany ($143bn) France ($142bn) and Italy ($91bn).

Going into 2025, momentum is likely to continue as election-driven uncertainty dissipates globally. In fact, global deal kick-offs on Datasite jumped 44% in the two weeks after the conclusion of US elections, compared to the same time a year ago.

Sectoral opportunities

The deal pipeline is healthy, especially within technology, media and telecommunications (TMT) and healthcare and life sciences, as a result of post-election regulatory clarity, tech innovation and significant medtech investments.

Additionally, dealmakers are eyeing the potential for strategic investments within the AI and cybersecurity industries and consumer M&A is gaining traction, buoyed by wellness interest and e-commerce growth. Business services, including professional services also present another compelling investment opportunity as companies able to navigate complex operational challenges are potentially attractive acquisition targets for larger enterprises seeking to enhance their offerings.

Private equity firms are also investing in mid-market businesses that offer greater agility, clearer paths to value creation and more straightforward integration processes. Some PE investors have already used their playbooks to unlock potential in these businesses, making them prime opportunities for targeted investments into 2025.

Emerging regional markets

Dealmaking in 2025 is expected to be more diverse geographically too. Emerging markets in Eastern Europe, the Middle East, especially Turkey, are becoming increasingly attractive for dealmakers seeking undervalued assets and fresh market points.

These markets offer unique advantages, with less competition, potentially more favourable regulatory environments and opportunities for strategic positioning that aren’t available in more saturated markets.

Forget the spreadsheets and strategies, dealmakers are driving M&A in 2025
Another emerging trend in 2025 is the importance of human involvement in M&A. Turns out, deal failures aren’t always because of the numbers or market conditions. In fact, 46% of global dealmakers said unrealistic expectations around resourcing was the biggest cause of deal failures in the last 12 months. This was followed by 34% who said overconfidence in market knowledge, ego clashes and lack of initiative thinking.

That’s why technology, especially artificial intelligence (AI), is crucial, particularly in deal management. AI is already significantly reshaping the way deals are done, from automating repetitive tasks and powering data analysis, to easing processes across all phases of the deal, including pipeline management, outreach, preparation, and due diligence. In fact, 66% of global dealmakers globally said exploring the use of new AI tools is their top operational focus area next year, while 42% view increased productivity as a primary benefit of generative AI in their business.

So, while dealmakers may be cautious about the broader economic and political environment, they are open to how technology can support them in navigating 2025, and how they can gain a competitive edge longer-term.

An optimistic outlook for private banking and 2025

Looking ahead, pent up demand on both sides is likely to invigorate M&A, as dealmakers now have somewhat more clarity on how elections will impact regulation and trade policies to create and manage healthy pipelines.
Looking ahead, assets are primed to hit the market and significant capital is ready to be deployed. For deal-ready M&A professionals that are able to navigate bandwidth constraints and the complex deal landscape effectively, the year ahead looks brighter. Additionally, since the conclusion of US elections, deal kick-offs jumped 44%, indicating a positive shift and reinvigorated M&A after a period of uncertainty.

Scott Dawson, CEO, DECTA

The ‘real’ year of the SME

We were assured 2024 was going be the Year of the SME – did it feel that way? We had a budget that was lacklustre at best and actively hostile to small businesses at worst with little else that directly addressed the concerns of their owners. Inflation and energy prices remained high and ordinary people, whose spending is the lifeblood of SMEs, were cautious about the economy. The economic results speak for themselves: growth so low that it may as well be a rounding error, a weak pound and declining consumer confidence (though it is far better than it was in 2022.)

We need 2025 to be the real year of the SME, and unfortunately, we can’t solely rely on the government to provide it to us. SMEs and the companies who work with them are going to have to start advocating for themselves and building the systems that can turn their fortunes around.

Payments systems are a part of this – being able to keep more of each transaction and offer far more options for consumers. Being able to offer financing on orders, previously something only possible at larger stores, would be huge for many SMEs, and it’s something that could start the process of recovery for many companies.

The AI backlash begins (kind of)

AI has been the overwhelming press story of the past two years, with companies like Kraft Heinz, Coca Cola and McDonalds all beginning to use generative AI, with decidedly mixed results. The initial excitement has largely died down, and more people are asking what AI can really do beyond creating unsettling images. Goldman Sachs went from predicting that Generative AI could raise global GDP by 7% in April of 2024 to saying that it had ‘too much spend (for) too little benefit’ in June. A new study has shown that ‘When AI is mentioned, it tends to lower emotional trust, which in turn decreases purchase intentions’. Hallucinations have made one of its only business-focussed features, the ability to create summaries, no longer fit for task. The term ‘AI Slop’ has become a ubiquitous shorthand for the surreal, disturbing images and videos that are flooding social media.

So, is there going to be an AI backlash? Not exactly – AI is used every time you make a payment, see an online ad or talk to a smart speaker – it is absolutely a part of our lives and definitely a part of the payments ecosystem. The issue is that a specific type of artificial intelligence (generative AI) has very limited applications and very few paths to profitability, either for the companies developing it or the companies using it.

Is AI here to stay? Absolutely. Will there be exciting, surprising and controversial developments in the near future? Definitely. But its groundbreaking, world changing development is yet to come.

Open Banking

Another year, another prediction about open banking. While open banking has been on the forefront of fintech conversation since 2018, I don’t think that it’s controversial to say that it hasn’t been as successful as its creators would have hoped. Many people either haven’t heard the term or have negative perceptions of it (‘I’m not going to open my bank account up to just anyone!’), but more importantly many people are using it without even knowing. A full half of open banking users shows that Open Banking is in fact quite popular – so long as you don’t call it Open Banking.

It seems that while there is an appetite for the things that open banking can do, there is little appetite for the term itself. It might even be dissuading potential users from engaging in what should be a vibrant ecosystem of services. People don’t need another technology in their lives; they need solutions to real problems, and it seems that many are using open banking as just that.

What does this mean for the FinTech industry? It means that the general public don’t always get excited about the things we get excited about, and that’s okay. They don’t need to know that the app they use to apply for credit or manage their finances is part of a larger ecosystem of services created by the Payment Services Directive 2 regulatory framework, and we as an industry don’t need to spend time and funds promoting open banking as a concept, or even talking about it, when they can be promoting the individual services that open banking enables.

We are not the US

One of the biggest stories of the previous months, the US election, has certainly generated its share of headlines and analysis, and the FinTech industry has joined the hype train. Frankly, a lot of what we’re seeing out of the US right now seems like it’ll be seriously watered down before they come into contact with reality: tariffs that would vastly increase consumer prices, a promise to reduce the size of the federal government that would leave millions jobless and constant reference to trendy topics like AI and cryptocurrency that may have little to no real world implications.

What does this mean for us on this side of the Atlantic. Honestly, not much. Despite Brexit, the UK is always much closer to Europe in regulatory terms (as we’ll see from PSD3), so a flurry of red tape cutting in the US isn’t going to affect our own legislation. The UK’s economy is interlinked heavily with the US’s, that’s true, but not to the extent that major up or downswings will move our own economy too much. The only real problems – for SMEs at least – will come if Trump’s tariffs are enacted as he said they would be: 10% import tariffs on all foreign goods, including those from the UK would inevitably reduce them, but by how much we can’t tell.

It’s natural to be concerned about what a geopolitical six-hundred-pound gorilla like the US is doing, but we should be sober-minded about the level to which our economies are really intertwined – it’s likely the case that whatever happens there isn’t going to be the end of the world.

PSD3 is coming

Open Banking came out of PSD2, the result of an attempt to level the playing field between payment service providers by giving them access to account information. There is still plenty for the payment service regulators to do, especially when it comes to combatting fraud and expanding the capabilities of Open Banking, and PSD3 is going to arrive in 2026. With the final version of PSD3 expected by the end of 2024 or at most early 2025 we will have a more concrete vision of what to expect, but the core concepts are already being discussed.  In a compliance sense, regulations and directives have key differences: a directive sets out a goal for EU member states to achieve whereas a regulation is binding.

The UK agreed to be part of the original PSD1 and PSD2, but is under no obligation to adopt PSD3 – it’s likely that it will do so just to keep things simple when doing business in Europe at a time when Brexit has over-complicated it, but we don’t know if the UK will accept all, some or none of the directives.

It is likely that PSD3 will be a continuation of PSD2 instead of a set of entirely new ideas, as PSD2 had been. There will likely be further streamlining of authentication for Open Banking, extended IBAN checks that will make credit transfers safer and a clearer framework for e-money. Ideally, fraud countermeasures will do something about APP fraud, which is a major cause of fraud in the UK and across Europe, but this may not fall into the remit of the directive.

Nick Merritt, Executive Director, Designit (UK)

The new banking back-end

Banks are set to invest heavily in digital tools and automation, streamlining processes with AI-driven customer support, ‘robo-advisors’, and more efficient back-end systems. This reduces costs, improves service speed, and enhances customer experience through personalisation and predictive insights.

Digital security to the fore

With the increased reliance on digital banking, cyber threats are escalating. Retail banks will likely invest more in advanced cybersecurity tools, leveraging AI to detect unusual activities and improving authentication methods to protect customer data and prevent fraud. Cyber resilience planning, including rapid incident response strategies, will also be critical.

Greener banking

Environmental, Social, and Governance (ESG) considerations are moving from ‘nice-to-have’ to ‘must-have’ for many investors and customers. Banks may focus on green financing options, sustainable investment products, and even carbon-neutral goals for their operations. Transparent ESG strategies are increasingly becoming a point of differentiation.

Banking outside the bank

The integration of financial services within non-financial platforms — think Buy Now, Pay Later options or payment solutions in e-commerce — will continue to grow.

Retail banks may focus on partnerships and collaborations with fintechs and tech companies to provide seamless financial services directly within the apps, platforms, and ecosystems where consumers are already spending time.

Financial hyper-personalisation

As competition intensifies, banks will likely enhance their use of data analytics and AI to deliver hyper-personalised services. This could mean tailored loan offerings, customised financial advice, or unique rewards based on spending patterns. Personalisation helps retain customers and increases cross-selling of financial products.

Nigel Green, CEO, deVere Group

Top 3 investment megatrends for 2025

Investors who align their portfolios with these forces are set to capitalise on significant opportunities amid turbulent times.

Conflict

Geopolitical tensions are escalating across multiple regions. Europe remains destabilised by ongoing conflicts, the Middle East is experiencing renewed unrest, and East Asia is navigating increased territorial disputes. 

Conflict, unfortunately, continues to be a driving force in global markets.

According to the Institute for Economics & Peace, the global conflict index is at its highest point since World War II, with over 50 active armed conflicts globally. The financial ramifications of these tensions are profound.

Defence budgets are ballooning, with the US expected to exceed $1trn in defence spending in 2025. Investments are flowing into advanced military technologies, missile systems, and cybersecurity, areas that are critical for national security.

As AI-driven threats rise, companies providing digital defenses will be major beneficiaries. Investors should be looking at how geopolitical risk can actually create long-term opportunities in this space.

Surging energy demand

Energy consumption is reaching record levels, driven by economic growth, the electrification of transport, and the AI boom. 

A key focus area is nuclear energy, which is undergoing a renaissance. Legacy nuclear plants are being refurbished and upgraded, presenting significant investment opportunities as new projects face regulatory delays. 

Analysts predict strong earnings growth for companies in the nuclear sector, as their output becomes increasingly valuable in a constrained energy market. The energy transition is at a critical juncture. Investors need to think beyond the traditional green-versus-fossil-fuel narrative. Nuclear energy, often overlooked, is now a crucial part of the energy mix. Companies with existing nuclear infrastructure are poised for substantial growth. Additionally, offshore oil and gas exploration is experiencing a revival, signaling confidence in long-term profitability.

This resurgence in offshore exploration has led to a spike in subsea orders and infrastructure development. These projects, aimed at boosting global output, highlight the ongoing relevance of traditional energy sources even as renewables gain traction.

Artificial intelligence

AI remains a transformative force reshaping industries and fueling market optimism. The past year has seen rapid adoption of AI technologies across sectors, with companies racing to enhance efficiency and unlock new revenue streams.

Capital expenditures in AI infrastructure are surging, with major players investing heavily in data centers and cloud capabilities. 

As AI continues to integrate into business operations, its market potential remains vast. Analysts forecast significant revenue growth, even as concerns about valuation persist.

AI is not just a tech trend—it’s the cornerstone of future economic growth. The companies building the infrastructure to support AI’s expansion will drive the next phase of market gains. This is a long-term play, and investors who position themselves now will benefit immensely. While there is always talk of bubbles, the reality is that AI’s transformative potential is only beginning to unfold.

Proactive investors who align with these megatrends will outperform those who react to short-term noise. 2025 will be a year of complexity and opportunity. 

At deVere, we’re focused on helping clients stay ahead of the curve by identifying the forces that truly matter. We expect that conflict, energy, and AI are the investment megatrends that will define 2025. Now is the time to act.

Jon Knott, Head of Research & Market Insights, Dojo

In 2025, fintechs will prioritise improving reliability for their customers. Reliable technology is the backbone of every business, helping improve customer satisfaction, which in turn drives long-term revenue growth.

For example, in the hospitality sector, where margins are under incredible strain due to inflationary pressures, tax rises, and higher energy costs, we know that now, more than ever, workers value reliable tech to improve the customer experience. According to our recent survey, 62% of workers reported that technology issues such as card machine outages or booking errors significantly impacted customer satisfaction. For 78% of managers, payment technology downtime hurts their revenues. As customers become choosier about spending, fintechs will start making reliable technology a priority rather than an add-on. At Dojo, we’ve recognised this trend and developed tech with an impressive 99.99% uptime to support this shift.

To succeed in the experience economy, reliable payment services are essential. For fintechs to thrive, they need to evolve in response to consumer needs. We will see more and more fintechs focusing on innovations that can enhance reliability to make customer touchpoints seamless and drive revenue growth.

Lynn Bishop, Chief Information Officer, DTCC

We continue to focus on upgrading and modernising our technology to provide clients and the industry with innovative services and capabilities they need today and in the future. In 2025, one of our top priorities will be readying our IT platforms and client-facing applications to support US Treasury Clearing, which represents one of the most significant changes to market structure in decades.

In addition, given the evolving threat landscape, we’re committed to strengthening our resiliency and partnering with our clients and technology providers to ensure financial markets continue to operate seamlessly. 

We’re also investing in AI and exploring how it can improve the client experience as well as to enhance our own productivity and efficiency. As AI continues to mature, it becomes essential to upskill employees with a foundational knowledge of AI to drive innovation and pursue practical and responsible use cases.

Nadine Chakar, Managing Director, Global Head of DTCC Digital Assets 

2024 was a pivotal year for digital assets, and we’re seeing strong momentum toward adoption. More and more institutional investors – on both the buy- and sell-side – continue to be getting engaged with this technology. We also saw a lot of progress on the regulatory front, with the SEC’s approval of Ethereum and Bitcoin ETFs in the US in 2024, and the first stages of the EU’s MiCA, the first-ever blockchain-related asset regulation, coming into effect.

We still have our work cut out for us in 2025 and beyond. While we’ve clearly proven the merits of this technology, it’s time to put real applications on the ledger using tokenisation. As we move beyond pilots and start putting projects into production, we’ll need to make sure we’re collectively driving toward an end goal: building an efficient digital market infrastructure and standards. Collaboration is the core ingredient that will help us capture the promise that digital assets hold. 

DTCC is excited to be at the forefront, leading the charge for industry acceptance and greater adoption of tokenisation solutions. We are proud to have further advanced this work with the launch of DTCC Digital Launchpad, an industry sandbox that’s bringing together financial market participants and clearing the path to scalable adoption of digital assets. In 2025, we will continue to focus on establishing the digital market infrastructure of the future, showcasing how we can deliver the same efficiencies for digital assets as we do in traditional markets today, while also ensuring smooth market operation, transparency and liquidity. 

Timothy Cuddihy, Managing Director and Group Chief Risk Officer, DTCC

As the threat landscape evolves and the nature of risk takes on new forms in the coming year, DTCC will continue to focus on strong risk management practices and robust operational resilience. Effective risk management is imperative given the heightened geopolitical risks, macro-economic uncertainty, cyber threats, and pace of technology change. Given DTCC’s role in mitigating risk, we are always focused on assessing and protecting against multiple and interconnected risks to the global financial system.

To ensure defense against ever-evolving risks, firms must embrace a holistic approach to risk management, combining real-time threat detection, advanced automation, and collaboration across the financial ecosystem. The key to navigating this environment lies in building and implementing adaptable, forward-looking frameworks that not only address today’s risks but forward-looking risk assessments to prepare for dynamic challenges ahead. 

Michele Hillery, Managing Director, Head of Repository & Derivatives Services, DTCC

2024 was a significant year in which the derivatives markets were shaped by substantial regulatory reporting updates. Global refits across North America, UK, EU, Singapore, Japan and Australia delivered enhanced transparency and greater efficiency across global capital markets, as firms tackled legacy trades and aligned reporting across jurisdictions, with swift action and robust data strategies proving crucial to implementation success. 

The pace of regulatory change shows no sign of slowing in 2025, with global jurisdictions including Canada, Japan and Hong Kong preparing to go live with the UPI reporting as part of the derivatives trade reporting rules.

To ensure preparedness, firms should continue to build on lessons learned from past implementations. Early preparation and collaboration, continuous adaptation, and strong industry partnerships will all be critical to ensuring compliance and strengthening post-trade infrastructure and reporting as the industry continues to evolve.

Laura Klimpel, Managing Director and Head of DTCC’s Fixed Income and Financing Solutions

2024 has been a pivotal year in industry preparations for the expanded UST clearing as a result of the SEC mandate, resulting in a significant and continued growth in fixed income clearing volumes.  Throughout the year, FICC remained focused on providing the most efficient and resilient clearing services for the industry. On September 30, FICC’s Government Securities Division saw record daily volumes of over $10trn and its Sponsored Service alone reached peak daily volumes over $1.7trn, creating $846bn in balance sheet savings across the industry. FICC is built for scale, and the record-breaking clearing volumes seen over the course of the past year are testament to its ability to meet the growing demand.

To help the industry prepare for the 2025 and 2026 regulatory deadlines, FICC has made significant strides in advancing how we will support done-away clearing in the Treasury market. Both of our indirect access models, the Sponsored Service and the Agent Clearing Service which was recently approved by the SEC, support done-away activity. We are also addressing remaining challenges around accounting implications – with resolution anticipated imminently – and will continue to roll out innovative products and services that create new margin and capital efficiencies for our clients.  Looking ahead, we will continue to listen and respond to the needs of the industry to ensure that firms are well prepared for the Treasury clearing mandate and ensure a seamless implementation.

Frank La Salla, President, CEO, and Director, DTCC

While the macroeconomic and geopolitical environment will remain uncertain in 2025, I’m optimistic about our industry’s future and the opportunity for DTCC to lead on critical initiatives that mitigate risk, enhance resilience and strengthen market structure. In that sense, this year will largely be a continuation of 2024 in that we must continue to execute flawlessly on large-scale industry implementations. On the heels of the smooth T+1 conversion, we will galvanize the industry and provide strong leadership on the transition to the SEC’s U.S. Treasury Clearing rule.

In addition, innovation will be an area of sharp focus for our firm. We’ve already been integrating digitisation, cloud and AI into our capabilities, and we’ll continue to advance this important work in the coming years. However, we also recognise that not all innovation will be underpinned by technology, which means that we’ll also focus on opportunities to improve market safety and efficiency through process enhancements, cross-margining agreements and other creative approaches.

Technologies such as blockchain and the cloud will play a crucial role in the build out and interconnectedness of the digital financial ecosystem. DTCC will continue to serve as a strategic partner to the industry by advancing acceptance and adoption of digital assets, focusing on opportunities to tokenise collateral and funds, and leveraging our existing clearing and settlement capabilities to facilitate the listing of digital funds on exchanges as well as secondary trading. We’ll also continue to advance our use of AI where it will be strategically beneficial to the client experience.

Tim Lind, Managing Director, DTCC Data Services

2024 was a year of transformation for asset servicing, driven by data-centric approaches that leverage new data sources to enable greater integrity and insight into valuation, risk management and liquidity dynamics.  AI and cloud-based data marketplaces will accelerate transformation of the data supply chain by replacing point-to-point connectivity between institutions with collaborative alternatives that focus on sharing, rather than sending data.  

As a leading market infrastructure provider and trusted partner to American issuers, we are poised to lead this change. DTCC will harness its data assets and innovative technologies in service to the capital markets industry, and bring issuers, intermediaries and investors closer together than previously imagined.

Brian Steele, Managing Director, President, Clearing & Securities Services, DTCC (KRISTI)

The expansion of US Treasury clearing is a huge priority for us in 2025. With deadlines fast approaching, DTCC is fully committed to a successful implementation, and we are working closely with the industry to educate clients on the impacts and preparations needed to ensure a smooth transition and to deliver upon the transparency and risk management benefits of such a move. Driving capital and liquidity efficiencies for the industry is a keen focus area for DTCC, which is why we are doubling down to improve our solutions (i.e. cross margining arrangements, creation of default fund, etc.) and enable our clients to maximize capital while complying with mandates such as Basel III rules, etc.

At the same time, we stand ready to assist the industry as global accelerated settlement efforts progress in EU and UK. We will continue to engage our clients through various forums as we look to expand and develop new products and services such as cleared securities lending, optimising the use of Collateral, increase the usability and access of our data, and improve our clients’ experience by modernising platforms and increasing resiliency. We are also actively preparing to support our clients through regulatory change efforts impacting RDS (i.e. Canada, JFSA Phase III and HKMA rewrite) and continue to invest in risk management excellence to protect the industry.

Val Wotton, Managing Director and General Manager, DTCC Institutional Trade Processing

2024 marked the successful implementation of T+1 in the US, which delivered substantial risk mitigation and operational and cost efficiency benefits to market participants. Under the new timeline, over 95% of transactions are meeting the affirmation criteria, a notable improvement from the 73% affirmation rate under T+2. Market participants have also benefitted from the significant reduction in margin requirements, allowing them to make better use of their capital and resources, while simultaneously reinforcing financial stability.

Global accelerated settlement cycles will continue to be the key theme for market participants in 2025, with attention shifting to implementation in the UK and Europe. DTCC wholly supports the recently published UK’s Accelerated Settlement Taskforce Recommendations which focus on post-trade automation as a T+1 enabler, and ESMA’s recently issued Final Report, which calls for automation and harmonisation across the EU region in order to make the move to a T+1 settlement cycle. We recommend that market participants approach T+1 implementation in the UK and Europe as an opportunity to evaluate holistically at their middle and back-office functions and assess how they can increase operational efficiency through automation and standardisation through central matching solutions that enable same day confirmation.

Willem Wellinghoff, Chief Compliance Officer, Ecommpay

From expanding protocols like Confirmation of Payee (CoP) to combatting fraud, ethical AI integration, embracing stablecoins and tightening compliance, the landscape is evolving to address emerging risks and opportunities.

Financial institutions will need to strike a careful balance between protection, innovation, accessibility and customer satisfaction, ensuring new processes embedded to protect consumers do not cause those same customers too much friction or frustration.

New systems and processes must also be capable of scaling to support the expansion of embedded finance and open banking across the EU, which will necessitate reinforced data-sharing protocols. The ability to connect seamlessly across borders will be invaluable.

As well as enhancing existing rules and adding new ones, regulators are intensifying enforcement actions, confirming a tougher stance on non-compliance and prioritising consumer trust. All businesses working in and with the payments ecosystem will be impacted by changes in the next 12 months, so they should ensure their systems, processes and technology are ready.

Five key regulatory themes shaping the 2025 outlook

Expansion of Confirmation of Payee protocols in the EU and greater emphasis on embedded finance

Reflecting a wider strategy to enhance consumer confidence in digital transactions, the Confirmation of Payee (CoP) system is set for a broad rollout across the EU. However, it faces interoperability challenges in the EU as it connects diverse banking systems. Through a greater adoption of embedded finance services across the EU there will be an ongoing pressing urgency to adapt systems and controls, leading to an increased emphasis on enhancing cyber security standards and ensuring the right data is passed on.

Combatting fraud: Push payment fraud and mandatory reimbursement rules

The UK’s introduction of mandatory reimbursement rules for victims of push payment fraud represents a shift toward holding financial institutions more accountable. This is expected to place pressure on institutions to modernise fraud detection mechanisms without adding friction to user experiences. Amid the ongoing drive for real-time payments in transactions, the new rules will slow the payments ecosystem to allow financial institutions to introduce a reasonable delay in case of suspected fraud.

Responsible use of AI in payments

The forthcoming EU AI Act and the anticipated AI Code of Practice (2025) will demand greater accountability and fairness for AI deployment (including, AI in fraud detection, transaction monitoring), with the aim of ensuring AI adoption not only enhances efficiency but also upholds ethical standards and public trust.

Evolving crypto regulation and stablecoins

The EU Markets in Crypto-Assets (MiCA) Regulation, along with parallel frameworks in the UK, are poised to establish clearer rules around stablecoin issuance, governance, and integration within traditional payment systems. Adoption hurdles include addressing volatility risks, ensuring backing transparency, and aligning crypto transactions with AML and counter-terrorist financing (CTF) regulations. For businesses and regulators alike, the challenge will be integrating stablecoins into mainstream payment systems while managing risks to financial stability.

Strengthened regulatory supervision and payment compliance

The safeguarding of client funds remains a top regulatory priority along with embedding operational resiliency. Regulators across the payments ecosystem will enhance focus on supervision of payment institutions to ensure compliance with safeguarding requirements and segregation of funds. Strengthening anti-money laundering (AML) frameworks will also go further to combat financial crime more effectively, with a greater emphasis on cross-border cooperation and real-time monitoring.

The 2025 regulatory agenda for payments in the UK and EU underscores a commitment to fostering trust, enhancing security, and driving innovation responsibly.

For industry stakeholders, this means navigating an increasingly complex regulatory environment while ensuring that innovations in payments remain reliable, inclusive, and secure. Those who prioritise adaptability and collaboration with regulators will be best positioned to thrive in this dynamic ecosystem.

Moshe Winegarten, Chief Revenue Officer, Ecommpay

2025: Growth of new payment tech critical for merchants

I do not expect to see consumer demand or spending rise significantly until well into 2026, forcing businesses to look at new ways to remain competitive.

2024 has seen open banking, Buy Now, Pay Later (BNPL), and marketplaces continue to gain traction. 2025 will tell a similar story. However, other changes may evolve, not least within globalisation, as more merchants extend their reach to serve customers in other regions.

2024 has certainly been a tough year, especially for homeowners with mortgages. And in 2025, it’s likely that increased National Insurance contributions for employers will put more pressure on recruitment and salaries. As such, there is likely to be an 18-month lag before consumers begin to increase their spending in a meaningful way.

Faced with these pressures, it is critical that payment tech keeps pace and provides merchants with vital checkout optimisation.

Payment trends for 2025

One Click payment options are emerging from e-commerce platforms as well as from Payment Services Providers (PSPs). Mastercard has confirmed its commitment to tokenise all card payments by 2027, pushing its Click to Pay offering which complements e-wallets such as Google Pay, Apple Pay and PayPal. Payments through these services are more secure, reliable and convenient for shoppers, resulting in increased conversions.

Open banking is still growing despite challenges with pricing and a push for profitability.

POS-finance and BNPL came into their own during Covid and are now settling into a new space, including longer-term lending and responsible finance to ensure longevity.

Marketplaces are welcoming more merchants, and even the larger providers are developing payment solutions specifically targeting currently underserved marketplaces.

Payment orchestration is seeing continuing growth, with many small providers launching, although some consolidation is likely as orchestration is folded into platforms and payments stacks to deliver wider benefits.

Crypto trajectory is likely to remain slow and steady with no dramatic shifts expected, although progress on Central Bank Digital Currencies (CBDCs) could accelerate development and acceptance.

Merchants have weathered a long and painful storm, with a continued focus on cutting costs, boosting profitability and increasing customer loyalty. And many are realising the advantages of working with full-stack providers like Ecommpay. Bringing all elements of payments into a single relationship brings significant cost and resource savings for merchants while simplifying global expansion and improving the user experience. That can be an invaluable combination for merchants looking to grow in 2025.

Svetlio Todorov, Managing Director, emerchantpay

Losses from payment card fraud are expected to rise significantly to $43bn by 2026, therefore consumer demand for secure and frictionless payment experiences will remain prevalent in 2025. In response, businesses must adopt advanced fraud prevention technologies. Artificial Intelligence (AI) for example, must be implemented into more businesses strategies as they fight against fraud. As these solutions develop, they will become crucial in protecting against fraud across multiple payment channels. 

Additionally, with regulators tightening consumer protection requirements, I expect to see greater attention on payment regulation next year; especially as we find out more about the Payment Services Directive (PSD3). Other regions are also likely to explore similar regulations. However, challenges in managing cross-border transactions will persist, making cross-country regulatory harmonisation essential for progress.  

Offering a mix of payment methods will also be essential as we move into the new year. I think we will see more methods like Open Banking and mobile wallets continuing to grow, providing the streamlined and secure transactions consumers’ desire. In addition, as the US government shows ongoing support for cryptocurrencies, the payment method will be pushed closer to mainstream adoption but will also face greater scrutiny from regulators. In the meantime, retailers and merchants must assess their ability to accept crypto, considering the implications this will have on their payment strategies. How they can streamline integration with their current payment methods will be crucial for success in 2025.

Matt Williamson, SVP & Industry Principal, Global Banking and Payments, Endava

Smart payment solutions are reshaping the way consumers manage their finances and make purchases. The introduction of dual cards, including Enfuce’s 2-in-1 debit and credit card with Mastercard, offers unprecedented flexibility and convenience. This innovative solution allows users to switch between debit and credit payments seamlessly, optimising their spending based on their financial situation and preferences. For example, dual cards allow one to seamlessly switch between debit for day-to-day expenses and credit for larger purchases or emergencies while abroad.

Looking beyond dual cards, intelligent features like recommendation algorithms and dynamic payment selection are set to enhance the consumer experience. These systems analyse various factors to include purchase location, currency exchange rates, and individual spending habits to suggest the most cost-effective payment method for each transaction. This not only saves users money but also simplifies the decision-making process at checkout. For example, when shopping online, the system might recommend using a card with no foreign transaction fees for an international payment, or highlight a rewards card for groceries to maximise cashback.

The integration of these smart payment solutions into financial apps and digital wallets is fostering a more personalised and efficient frictionless payment ecosystem. By automatically selecting the best payment option – factoring in fees, exchange rates and potential rewards – these systems are helping consumers maximise their financial resources.

As we look to 2025 and beyond, the evolution of these technologies promises even more sophisticated, user-centric solutions. With the ability to adapt to individual needs and market conditions, they are set to empower consumers to make smarter financial decisions, tailored to the realities of everyday life.

Could AI agents be our ticket to financial freedom?

Agentic AI is transforming personal financial management, opening the door to accessible and sophisticated financial advice for all. Through advanced data processing collated across multiple sources and machine learning, it is delivering valuable financial insights across critical areas, empowering individuals to tangibly achieve their financial goals with personalised strategies.

From goal setting to investment management and expense optimisation, Agentic AI acts as a super-smart 24/7 financial advisor, offering tailored financial guidance without the astronomical fees. Imagine you’re a 28-year-old struggling to save for a home while managing student loans – this intelligent solution could analyse your spending habits and suggest micro-adjustments, for example redirecting £50 from unnecessary subscriptions into a high-yield savings account. But it’s not just about cutting costs. These AI agents create personalised investment strategies that adapt in real-time, automatically rebalancing portfolios during market volatility or flagging tailored investment opportunities.

The most compelling aspect of agentic AI lies in its potential to democratise access to financial planning, making high-quality advice available to those who’ve previously been excluded due to cost. However, this revolution isn’t without challenges. Considerations around data privacy, regulatory compliance and the need for human oversight are vital to ensure trust and long-term success.

As the technology matures, agentic AI could become an indispensable partner in personal finance, enabling smarter decisions and accelerating paths to financial freedom. This is more than technology – it’s empowerment for everyone.

John Hughes, SVP and Head of Network Security Business Group, Enea

Cybersecurity will become even more integrated into broader organisational strategies in 2025, especially as cybersecurity becomes a boardroom priority. With cyber threats growing more sophisticated – fuelled by the rise of accessible AI-powered techniques – the risks now extend beyond data breaches to include advanced forms of fraud. Our research revealed that 61% of enterprises still face significant losses from mobile fraud, with smishing (SMS phishing) and vishing (voice phishing) among the most damaging. These threats are only set to escalate in the year ahead.

For the telecom sector, the stakes are particularly high. Safeguarding critical national infrastructure and subscriber data amid rising geopolitical tensions and tightening regulations demands proactive strategies. Compliance mandates, such as those addressing CLI spoofing, will shape priorities, while growing fraud and customer trust concerns will call for innovative solutions.

Security budgets are expected to increase as businesses recognise the financial and reputational costs of underinvesting in cybersecurity. In telecoms, this funding will go beyond addressing immediate threats to enhance network security, ensure regulatory compliance, and protect customer confidence – an essential factor in retention.

Across industries, the focus is shifting from reactive defences to building proactive resilience. This means ensuring continuity, mitigating fraud, and strengthening trust in an era of escalating risks. Cybersecurity is no longer just an operational issue; it’s now a core pillar of business success.

Joshua Summers of AI platform, EnFi

Private credit has crossed $2T, signalling a fundamental shift in how businesses access capital in 2024. After speaking with dozens and dozens of lenders, credit officers, portfolio managers and executives across banking and private credit, here are my forecast-fuelled musings (with a tiny dash of data).

The talent crisis will reshape credit. With 27,000+ open financial and risk analyst roles annually and rising complexity in credit markets, both banks and private lenders are competing for the same shrinking talent pool. Traditional career paths in credit analysis are being reinvented.

The flood of AI solutions in banking will give way to a focus on precision and provenance. Lenders will demand tools that can trace every risk insight back to verified source data, moving past the hype to solutions that deliver proven results.

Credit market boundaries will blur

Traditional banks will partner more with private credit funds, creating hybrid lending models that combine bank stability with private credit flexibility.

Real-time risk monitoring becomes table stakes

The days of quarterly portfolio reviews are numbered. After 2023’s banking tremors, regulators, boards and investors will demand continuous risk assessment across all lending.

We’re entering an era where the line between traditional banking and private credit gets increasingly fluid. Those who adapt fastest and embrace AI to scale their capabilities exponentially will write the next chapter of lending.

Frank Moreno, CMO, Entersekt

Despite advancements in fighting Authorised Push Payment (APP) fraud, it is expected to keep rising sharply in the coming years. Numbers from ACI Worldwide put the growth from APP fraud losses northwards of 50% – rising from $1.94bn in 2022, to reach around $3bn in 2027.

The growth of APP fraud is largely attributable to the increasing adoption of peer-to-peer payment applications like Zelle, Venmo & PayPal, and real-time payment systems, such as the US Federal Reserve’s FedNow initiative. These systems facilitate faster transactions. While convenient for consumers, the rapid nature of the payments also creates opportunities for fraudsters to quickly move funds out of reach before financial institutions can detect and reverse fraudulent transactions.

Technology options have a lot to offer

2025 will see several innovative technology solutions emerge to fight APP fraud. Several banks have already adopted Confirmation of Payee systems, which help verify that the name on a bank account matches the intended recipient’s name before a payment is processed, or to identify potential mule accounts.
Financial institutions are also increasingly deploying artificial intelligence (AI) and machine learning to profile customer behaviour and detect anomalies that may indicate fraud.
We see “device signals” playing a bigger role in building up advanced recommendations for risk-based authentication (RBA). For example, behavioral biometrics allow banks to learn about a customer’s transactional behavior to determine which interactions are legitimate and which should be flagged as suspicious and stopped before they happen. This helps banks pick up user behaviour that is out of the ordinary, calculate the risk posed by transactions, and decide what to do about it.

Multi-layer fraud protection

The best solution to fighting APP fraud is a multi-layered approach with both visible and invisible security.  Visible security refers to active authentication steps such as a customer verifying a large payment via their mobile device. Invisible security could detect suspicious activity, such as unusually large payments, or payments initiated (or authenticated) from an unfamiliar device. Together, these are much more likely to make a difference than any conventional approach.

Dr Ellison Anne Williams, Founder and CEO, Enveil

Financial services and fraud prediction

In the financial services sector, fraud will continue to become increasingly rampant due to the ease of leveraging AI tools to advance these activities. The fight against this and other economic crimes will lead to a steep adoption curve for innovative solutions that enable financial institutions to identify fraudulent activity and protect both customers and their bottom line. To do this effectively, banks need to be able to securely use and process all the data available to them, which means leveraging data sources across boundaries and silos, both internal and external. The ability to use more data, made possible through advances in Privacy Enhancing Technologies, allows banks and other stakeholders to collaborate and obtain a global operating picture, which ultimately leads to better, intelligence-led decisions.

Ariel Tiger, CEO, EverC

The rise of payment fraud for neobanks and payments startups

Fintechs must align their innovative business models with strong fraud prevention and compliance frameworks. Striking the right balance is crucial! In such a heavily regulated industry, accountability is key—if you’re facilitating harmful commerce, you’ll face serious consequences. You have to ‘know before you grow,’ as regulators expect fintechs to protect customers and the ecosystem. Those that do will thrive and drive sector growth. As an investor myself, I’ve seen firsthand how this approach sets businesses apart and fuels sustainable success.

Saran Talasila, payment specialist, Exactly

With 2024 coming to an end, it is an appropriate time to reflect on a year of continuous transformation and advancements in financial technology. With many more innovations yet to unfold, here is what we can expect from the FinTech industry in 2025.

Global embedded finance is set to experience further growth, following a projected trajectory culminating in a 148% expansion in 2028. Embedded finance refers to the integration of banking services, payment providers, insurers, eCommerce platforms, and technology vendors within the commercial services of businesses. This seamless integration facilitates immediate payment processing post customer transactions, minimising delays and enhancing convenience. With the ability to analyse customers’ transaction behaviour and demographic data acquisition, businesses will be empowered to customise their financial services to their customers’ needs and generate new revenue streams. Embracing embedded finance allows businesses to deliver personalised financial solutions, ultimately enhancing customer engagement and fostering loyalty.

Real-time payment processing capabilities will also experience exponential advancements. Customers’ transactions will be processed within milliseconds, facilitated by advanced, secure payment processing systems to drive efficiency in both eCommerce and cross-border transactions. As real-time transaction technologies continue to evolve – integrated with AI and machine learning – we can expect an unprecedented level of payment speed and convenience. Contactless payments, biometric authentication, and cross-border payment systems will be faster, more reliable, and far more secure – thanks to improvements in both technology and regulatory frameworks. Given AI’s ability to analyse large volumes of data, in 2025 we can expect the emergence of refined payment fraud detection systems that can identify anomalies in user transactions and purchase patterns in real time. Payment service providers and businesses will be able to use this intelligence to strengthen their security measures, effectively reducing the risks of fraud and false transactions. This proactive approach will not only improve the integrity of payment processes but also increase consumer trust in digital payment systems.

With regulatory frameworks evolving to keep pace with these rapidly advancing technologies, we can expect 2025 to be a transformative year poised to support an increasingly inclusive and user-centric financial landscape. The upcoming opportunities for FinTech to expand seem endless and it sets the stage for a new era of redefined transactions and payment processing.

Paulo Del Priore, Partner, Farview

Price-to-earnings (P/E) ratios are at elevated levels, for instance, as of December 6, 2024, the S&P 500 Index had a trailing P/E ratio of 25.41, up from 21.74 a year earlier. Similarly, the Dow Jones Industrial Average’s P/E ratio increased to 28.03 from 26.24 over the same period. These figures suggest that equity valuations are relatively high compared to historical norms.

In the credit markets, spreads have tightened considerably. Investment-grade corporate bond spreads in the US narrowed to 82 basis points over Treasurys on November 12, 2024, marking an all-time low. High-yield spreads also tightened to 214 basis points on November 14, 2024. Such compressed spreads may indicate that investors are not being adequately compensated for credit risk, potentially signalling overvaluation in credit markets.

These conditions underscore the importance of constructing portfolios that are decorrelated from traditional asset classes. We are therefore avoiding managers who cannot exploit inefficiencies in low-dispersion markets and are favouring those with the flexibility to navigate higher-dispersion environments. Strategies such as long/short equities, macro, and systematic approaches appear promising due to their adaptability. Conversely, long/short credit strategies seem less attractive given the tight credit spreads.

In the event-driven space, we are paying close attention to potential opportunities in the US, particularly as shifts in M&A policies under Trump’s administration could lead to heightened volatility and larger dispersions. We already have allocations to Europe in event-driven strategies, and the US presents an interesting area for expansion.

Andrew Shikiar, CEO – FIDO Alliance

First big brand banks deploy passkeys at scale, and governments go all in

In 2025, we’ll see the first major banks roll out passkeys at scale, signalling a game-changing acceptance of passkeys in regulated industry. For organisations as security-conscious and naturally conservative as financial services, this adoption will mark a profound turning point – an endorsement that passkeys are not just more convenient for consumers, but also trusted at the highest level.

Passkeys find expanded use in payments, reducing reliance on SMS OTP

The convenience and security of passkeys will be leveraged not just for user sign-ins, but also for payment authentication. Both Visa and Mastercard announced related services in 2024 that stand to see widespread utilisation in 2025 for ecommerce transactions – meaning that more merchants will benefit from fewer abandoned carts, from fewer false declines and from fraud reduction, while issuing banks will benefit from enhanced security and increased consumer trust. Passkeys provide a more reliable, cost-effective and secure approach for payment authentication than SMS OTP – which has seen a 300% increase in fraud in India, for instance.

Passkeys find their place in payment authentication

Passkeys will come into their own in the payments ecosystem next year, with Mastercard and Visa already leading the charge. Passkeys are a natural fit for delegated authentication models in payments, quickly verifying to merchants a payment and the user is authorised and legitimate. It has also become recognised within EMVCO’s 3D Secure (3DS) protocols, easing the security flow processes. This innovation will ultimately improve the security and simplicity of transactions. With passkeys, the need for extra authentication methods and reliance on traditional step-up security methods will ease, paving the way for a seamless and reliable payment flow. By year’s end, passkeys will be trusted within payments as the superior option to reduce friction, improve conversion rates and boost user confidence.

Andrew Bateman, EVP, Lending, Finastra

In 2025, lenders will focus on driving productivity and efficiency to reduce risks and increase profitability 

Global interest rates and loan volumes continue to fluctuate, and regulations are becoming increasingly complex. Plus, many areas of financial services are facing ‘brain drain’ due to factors such as stricter regulations, loss of knowledge as industry veterans reach retirement, and new skills required from workers as technology advances. Enhancing operational efficiency, productivity, risk management, and profitability will be front of mind for lenders in 2025.

Banks will increasingly turn to GenAI to plug lending and technology knowledge gaps and optimise processes. With its ability to curate tailored content, the technology can be used to create personalised, interactive learning experiences to upskill teams. GenAI-powered assistants will also become more embedded within solutions. With large language models, banks can, for example, process and interpret Letters of Credit and instantly perform checks on the documents to make quicker, and potentially more informed trade finance decisions. In customer-facing applications, corporates could ask for a breakdown of their loans and ways to optimize their finances, thereby enhancing their own user experience while also reducing bank resource requirements.

Sustainable, inclusive, and responsible lending will remain high on the boardroom agenda in 2025, particularly as deadlines for Section 1071 of the Dodd-Frank Act in the US and Basel 3.1 are fast approaching. These regulations require banks to meet complex lending data reporting requirements and provide more accurate risk calculations. We’re also seeing a growing market demand for ESG solutions, such as sustainability-linked loans, bonds, and supply chain finance. Banks will need to adopt scalable, highly available, and automated solutions that support growing lending volumes, while simplifying the complexity of reporting requirements and performance tracking. Cloud and SaaS will play a big role here, providing the necessary agility to navigate this rapidly evolving market.

Another trend is the need for lenders to fast-track their modernisation efforts to overcome challenges in managing their loan portfolios. For example, SMEs are pivotal to economies, and they often require credit for survival. Despite this, manual processes, siloed operations, and outdated technology can make SME lending risky, unprofitable, and challenging to comply with the regulatory requirements. This can cause high rates of ‘borrower churn.’ For banks to truly capture the market opportunity while reducing risks and costs, they must consolidate their loan portfolios onto a single, modern platform. This can help to simplify and streamline services, improve data accuracy, and reduce abandoned loan applications.

For banks to evolve with demands, implement the latest technology and mitigate risks in 2025, partner ecosystems, underpinned by the principles of Open Finance, are crucial. By integrating value-added services through APIs, such as for automated ESG scoring, document checking or GenAI-assistants, lenders can keep pace, increase efficiency and profitability, while decreasing time to value. We expect to see more banks opting to modernise via a microservices approach, to further increase their agility while driving risks down.

Siobhan Byron, EVP, Universal Banking, Finastra

To keep pace in 2025, institutions must reimagine banking through innovative technology and ecosystems

The banking industry today is very different from just a few years ago. Fintechs, neobanks, and technological innovation have flourished worldwide, technologies are being adopted by the masses at a pace we haven’t seen before, and Open Finance is a reality. This has led to heightened demand for instant, digital, seamless, and personalised services. We are quickly moving towards a world where banking is deeply embedded within our lives. Where services are tailored for our needs and delivered where, when, and how we need them. In 2025, institutions must reimagine banking to compete in this environment. However, adopting the right technology, implemented in a way that maximises innovation while minimising risk, will be key.

For example, appetite for cloud worldwide is generally increasing. In many regions such as the US, UK, Germany, France, Singapore and UAE, we expect cloud and SaaS adoption to remain strong. Institutions recognize the benefits they bring in increasing agility and innovation, while reducing risk, time to market, and total cost of ownership. However, in regions where cloud adoption is growing slowly due to factors such as regulatory constraints, it may not be the best option. For these banks to remain competitive, they must invest in on-premises solutions that provide robust security, scalability, and data analytics. Ideally, solutions that can easily migrate to the cloud as and when the regulatory concerns are addressed.

We expect to see more banks choosing to transform via a flexible and modular strategy. For example, the traditional ‘rip and replace’ method to upgrade a core banking system can come with prolonged timelines, high costs, and operational disruption. Instead, more banks will adopt a Symbiosis approach, where a next-generation core banking system is deployed alongside existing infrastructure, enabling rapid innovation while minimising costs and disruption. Additionally, through microservices architecture and APIs, specific functionality, such lending or Islamic banking services, can be seamlessly implemented at speed.

Another trend is the need for greater access to data, and the ability to use this in a meaningful way. This is where AI shines. For example, through AI-driven analytics and dashboards, banks gain rapid insights into their customers’ needs, what’s working well, and where they can transform to grow. GenAI will gain more momentum next year and beyond, with use cases such as GenAI-powered assistants, inside and outside of banks, being deployed. These tools enable enhanced productivity, instant access to information, and more informed decision making for banks, as well as their customers who can gain greater insights into how to optimise their financial situation.

Finally, as risks of fraud and cybercrime grow, and regulations become more stringent, banks are increasingly relying on ecosystems alongside robust core banking solutions, to strengthen their security and compliance processes and enhance customer experiences. By seamlessly integrating services through APIs, banks can quickly protect themselves against risks while curating the personalised journeys that their customers expect. Ecosystems are also taking many different forms. For example, a bank can bring together the services that a homeowner needs to fit solar panels on their house – from advice on selecting the right ones, choosing the installer, applying for the grants, complying with the rules, and so on. This is an exciting example of how Open Finance is driving forward ESG initiatives and delivering holistic services that are customer-first. We can expect to see more growth in ecosystems next year and beyond, as banks look to drive growth and innovation, and to remain competitive.

Wissam Khoury, EVP, Treasury & Capital Markets, Finastra

Automated workflows and real-time technology will be key for financial institutions in 2025

Industry and societal change are occurring faster than ever, giving rise to new opportunities and risks that banks must navigate. For example, we’re seeing continued volatility in capital markets, increasingly stringent regulatory requirements, such as the upcoming deadlines for the Basel 3.1 reforms, more demand for ESG services, and pressure for banks to adopt technology safely. With these trends expected to continue into 2025, bank treasurers and investment managers must focus on enhancing productivity, data-driven decision-making, agility, and risk management. Automating trading workflows and adopting real-time technology, underpinned by broader modernisation efforts, will be a key focus.

An exciting technology that will help to drive this is GenAI. Use cases will become more developed in 2025, with promising applications for trading on the horizon. By analysing large amounts of historical data and current events in real-time, such as policy decisions made by the Fed or ECB, or trending news articles, GenAI enables institutions to better understand sentiment and positions in the market.

By embedding natural language capabilities within interactive workflows and GenAI-powered assistants, institutions benefit from streamlined processes and elevated user experiences. As Large Language Models (LLMs) become a popular search engine for trading and analysis, access to information will become faster, simpler, and more intuitive. Traders can, for example, retrieve real-time market data, quotes, or transaction details – such as a detailed summary of all the FX spot trades executed – and run APIs to automate tasks such as booking trades and calculating risk measures. They can make more informed decisions, quickly, about liquidity and cash management requirements, how to adapt investment strategies, including to meet ESG criteria, and mitigate risk.

Underpinning GenAI adoption and the shift to real-time treasury and trading, is a broader trend towards modernisation. We expect continued growth in appetite for cloud and SaaS, with institutions recognising the benefit they can bring in reducing risks, costs, and time to market, while increasing operational efficiency and the ability to adapt quickly to new demands. Modernisation efforts are also increasingly occurring via a microservices-based environment, allowing institutions to pick and choose functionality while reducing the potential risks of a large migration from a legacy system.

In 2025, bank treasurers and investment managers will look to partners to deliver the flexible, agile, scalable solutions that enable automation and real-time operations. Since neither banks nor technology partners can deliver all functionality by themselves, robust partnership networks and ecosystems, underpinned by the principles of Open Finance, will be crucial for success.

Barry Rodrigues, EVP, Payments, Finastra

As instant payment volumes grow in 2025, banks must prioritise resilience, scalability, and speed of recovery

Governments around the world are prioritising making payments more instant, seamless, and affordable for everyone. More than 80 countries today have domestic instant payment systems, such as FedNow in the US, SEPA Instant in Europe, SIC5 in Switzerland and FAST in Singapore. As a result, we expect to see ongoing growth in global instant payment volumes next year and beyond, covering both wholesale and retail transactions. This adoption is accelerated by the ISO 20022 messaging format, which underpins many of the domestic and cross-border instant payment schemes. For example, in the US, with the Fed’s March 2025 deadline for ISO 20022 migration for domestic wires fast approaching, financial institutions need to ensure they are compliant with the new standards and consider their strategy for instant payments.

Cross-border payments are also increasingly moving to real-time and more than 60% of banks agree this brings additional revenue opportunities. Alongside traditional players like SWIFT, we’re seeing more alternative cross-border providers enter the market, with the aim of reducing the friction and costs of moving money across borders, while enhancing transparency and speed. Further innovation is happening with Central Bank Digital Currencies (CBDCs), with 134 countries in an exploration phase. These tokenised versions of fiat currency have the potential to disrupt the cross-border market in select verticals, as we progress towards instant digital currency exchanges.

In addition to instant payments, we expect continued improvement in the speed of delivery and volume growth in high value transactions, driven by factors such as small businesses adopting these payments in an increasingly global marketplace. Growth in mass payment volumes, such as SEPA in Europe and ACH in the US, is also expected to remain strong due to high demand and providers moving towards facilitating same day mass payments.

As payment volumes grow and become increasingly instant, strengthening speed of recovery, scalability and resilience, including fraud risk management, will be key priorities for banks in 2025. With regulators around the world mandating increased payment availability, in some cases 99.9%, banks must upgrade their capabilities to ensure they can stay compliant and provide resilient, secure solutions for their customers.

When it comes to payments modernisation, more banks are looking to consume smaller, standalone components that can be easily integrated through APIs. With containerised, composable microservices and cloud deployment, institutions benefit from faster deployment cycles and greater efficiencies, with scalability and agility, while reducing risks associated with large-scale migrations from monolithic systems.

GenAI will also play an important role as payments become more instant. Compelling applications include driving efficiencies in anti-money laundering (AML) compliance, sanctions screening, and fraud detection which will be ever more important with instant and irrevocable transactions. We expect to see more use cases being developed and adopted in 2025 and beyond.

Steve Marshall, Director of Advisory Services, FinScan

With geopolitical tensions continuing to escalate, financial crime measures will be front of mind for governments, regulators and businesses in 2025.

We expect to see an increased focus on compliance and implementation of new regulations, such as those introduced by the EU AML package in 2024. The new EU Anti-Money Laundering Authority, will also start work in mid-2025.

With the growing adoption of digital currencies, regulators will implement stricter AML and KYC requirements for entities providing service and access to digital assets and cryptocurrencies. This includes enhanced scrutiny of digital asset exchanges and the application of traditional compliance measures to the crypto space.

There will also be increased international cooperation between countries to harmonise AML regulations, close regulatory gaps, and enhance information-sharing agreements. G7’s first-ever joint guidance on preventing evasion of export controls and sanctions imposed on Russia issued is an example of this approach.

Technological advancements will also drive change. Digital adoption and investment in AI, machine learning, and blockchain solutions will accelerate as financial institutions look to enhance customer due diligence (CDD) and transaction monitoring.

These advancements are leading to changing best practices. There is a shift towards more dynamic and ongoing CDD processes, which aim to identify and mitigate risks as they arise rather than rely solely on periodic reviews.

Compliance programmes will increasingly incorporate ESG considerations, assessing clients’ environmental, social and governance impact as part of the due diligence process, reflecting a broader trend towards responsible banking and investment. Checking for governance transgressions is a natural focal point. However, penalties can also be levied for environmental and social reasons.

Underpinning these developments will be a greater focus on data quality. Poor data quality can lead to ineffective risk detection, high false positive rates and operational inefficiencies. These challenges can be addressed by using compliance-specific data quality solutions integrated into the screening process.

David Becker, chairman and CEO, First Internet Bank

We’ll see an uptick in bank mergers and acquisitions through 2025, especially among smaller institutions. As asset valuations return to their book value, many community banks that have been considering their exit strategies will finally find favourable economic conditions to proceed. We’ve already observed a few small bank acquisitions being announced each week—a pace we haven’t seen in five years. While regulators will closely examine major mergers, they’re likely to support the consolidation of smaller institutions into stronger banks. This consolidation will help create more resilient institutions that can better serve their communities while navigating the complexities of modern banking.

Russell Andrews, Head of Wealth & Asset Management EMEA, FIS

Fintech is already playing an important role in the evolution of the investment landscape. The beginning of mass-adoption of AI over recent years is having a significant impact on modernising investors’ experience and enhancing investment decision making and we expect this to continue into 2025.

Developments in AI have allowed wealth and asset managers to automate repetitive tasks, and provide data-driven advice in specific areas, such as portfolio optimisation, risk management and tax analysis. AI powered systems also free up time for investment managers by reducing admin workloads and allowing investment managers to spend their time nurturing client relationships, rather than being bogged down in tasks that could be automated.

As wealth and asset managers consider how to best utilise AI in their data strategies going forward, it’s important to note that the technology in its current form is limited. This is due to the lack of appropriate data and data structure to make consistent and accurate human-level decisions, particularly within the investing space. In order for AI to create better solutions for wealth and asset managers in the coming years, we need to supply it with a more realistic, comprehensive and organised dataset. However, before we consider automating investment decisions, we need to keep in mind that AI is there to support us in making faster, better decisions, not making them for us.

Hashim Toussaint, General Manager and Division Head of Digital & Open Banking, FIS

Momentum toward digital banking has come to a head in recent years, making investment in digital innovation no longer just a “nice to have” but a key to survival for banks of all sizes in 2025.
Consumers have more choice than ever before when it comes to how and with whom they bank, and they’re increasingly expecting seamless digital experiences across all channels. In fact, a Q4 2024 survey from FIS found that social media has become the primary source of financial advice for younger generations, with 40% of Gen Z and 36% of Millennials surveyed reporting they learn about finance from social media. Notably, less than 25% of Gen Z and Millennials said they are educated by their financial institutions on their personal finances.
For banks to remain the voice of authority on personal finance to younger generations, they must align resources with a digital-first strategy. This includes leveraging AI to develop hyper-personalised experiences, harnessing technology to streamline processes, and carefully navigating regulatory guidelines when it comes to data management, governance and security.

DJ Kurtze, San Francisco Bay Area President, Five Star Bank

Increased trust in community banks

In the wake of bank failures resulting in low confidence in banking, businesses in 2025 will increasingly move their assets and their trust to community banks, which are catalysts for economic development and advocates for clients. Businesses now want direct access to a dedicated banker who provides concierge, high-touch, white-glove service, strategy, and insights to earn their confidence and unlock their success.

There will be more diversification

To grow their businesses, assets, and clientele in 2025, and to embrace an opportunity to compete with larger banks, community banks will diversify beyond serving one or two niche markets. Community banks will broaden their range of specialisation in markets as diverse as agriculture, commercial real estate, construction, government, healthcare, manufacturing, nonprofit, and venture capital to attract marquee clients and expand their presence.

Fight against fraud

We probably never will see an end to financial fraud, but in 2025, banks will spare virtually no resources to prepare for and combat it. The cost of losing confidence and reputation due to fraud is immeasurable compared to the cost and benefits of detecting and preventing it and maintaining customer trust, so banks will increase their fraud detection and prevention investments and initiatives in 2025.

Interest Rates will decrease

Although the aftermath of an election may breed uncertainty, I am quite certain that, in 2025, interest rates will decrease. The Federal Reserve took appropriate action in 2022 and 2023 to combat inflation by raising rates, but I predict the Fed in 2025 will cut interest rates.

Concierge Banking for the win

Artificial intelligence is delivering many benefits in financial services, including automating business processes and providing insights and analytics to support decision-making; but in 2025, businesses will increasingly want to interact with relationship bankers whom they know and trust. Businesses are increasingly aware of the ‘dark side’ of AI, including deep fakes, misinformation and hallucination, to a point where they will seek concierge, high-touch, white-glove banking services to manage, protect and grow their assets in 2025.

Janine Suttie, partner and VC lawyer, Fladgate

Green shoots for a changing VC landscape in 2025

As we head into 2025, the mood in the VC market is cautiously optimistic. Stabilising inflation and a less hawkish interest rate environment should alleviate some of the pressure on valuations and liquidity, spurring deal activity, reducing the cost of capital and restoring confidence in longer-term bets. As institutional investors feel less constrained by macroeconomic uncertainties, fund deployments should accelerate, and exits—whether IPOs or M&A—may pick up.

The UK and Europe remain highly attractive markets for innovation, bolstered by world-class universities, strong research capabilities, and an increasingly sophisticated VC ecosystem, and 2025 promises to be a year of opportunity. With careful navigation of macroeconomic shifts, regulatory changes, and sectoral opportunities, the market is well-positioned to thrive. Founders and investors alike are adapting, and the foundations for a robust, innovation-driven recovery are already in place.

UK government has a role to play

The UK government has an opportunity to further strengthen the domestic VC ecosystem through several key measures. Firstly, it should look to expand tax-efficient investment schemes (e.g., SEIS and EIS) to encourage more early-stage funding. Supporting regional tech hubs with tailored initiatives, including dedicated VC funds or partnerships with local universities would also be a progressive step, as would streamlining visa processes for global talent, ensuring the UK remains a magnet for world-class founders and tech talent.

Founders are pragmatic but optimistic

Many founders are adjusting to the ‘new normal’ of sustainable scaling, focusing on capital efficiency rather than growth-at-all-costs. Investors, while more selective, are actively scouting for high-quality opportunities, especially those aligned with long-term macro trends like decarbonisation, digitalisation, and demographic shifts. Corporate venture capital (CVC) continues to grow as corporations recognise the need to stay ahead of disruptive innovation. However, founders are cautious about these partnerships, wary of strategic misalignments or restrictive terms.

AI, climate, financial and health tech will continue to flourish

2025 is poised to see a resurgence in activity across several key sectors. Despite fears of overheating in AI VC, the sector still has significant room to grow. Generative AI applications are maturing, while frontier areas like AI for biotech, quantum computing, and autonomous systems are still in their early innings.

Europe’s leadership in climate innovation positions it as a global hub for sustainable technologies. From renewable energy to carbon capture, VCs and CVCs are actively backing scalable solutions to the climate crisis. While the fintech boom has slowed, niche areas like embedded finance, decentralised finance, and regulatory tech are gaining momentum. Finally, with an aging population and growing healthcare challenges, solutions in personalised medicine, diagnostics, and healthtech remain highly attractive.

Regulatory trends and their implications

In 2025, several regulatory developments could impact the VC landscape. The EU’s AI Act is set to shape how AI startups operate, particularly around compliance and transparency. Similarly, continued harmonisation of financial regulations could simplify cross-border fundraising and investment. While these changes may pose short-term hurdles, they could ultimately enhance the attractiveness of European markets by providing clarity and stability.

Berlin, Paris and Stockholm vying for attention

London continues to dominate, but cities like Berlin, Paris, and Stockholm are increasingly vying for attention. Governments in these regions are becoming more proactive, offering tax incentives, grants, and targeted support to catalyse growth outside established hubs. In the UK, the new government has an opportunity to build on existing policies, perhaps by introducing region-specific funds or simplifying access to capital for startups outside London.

Tim Wright, technology lawyer and partner, Fladgate

Innovation, regulation and ethical considerations will define AI in 2025

2025 will be another important year for artificial intelligence (AI), where the interplay between innovation, regulation, and ethical considerations will define the technological landscape across the US, UK and Europe. We are entering a critical phase where AI’s transformative potential must be balanced with robust governance and responsible development, amid the convergence of three critical priorities: regulatory sophistication, ethical AI frameworks, and strategic risk management. Regulators are poised to move beyond broad principles to more granular, sector-specific AI governance models. Businesses should anticipate a shift from voluntary compliance to mandated AI auditing, with particular emphasis on transparency, accountability, and demonstrable risk mitigation strategies.

The IP battleground

Intellectual property continues to be a crucial battleground. Generative AI is becoming ever more sophisticated, blurring the lines between original creation and algorithmic synthesis. Enterprises must proactively develop comprehensive IP strategies that address potential copyright challenges, investing in robust legal and technical frameworks that can navigate these emerging complexities.

UK as global leader in AI innovation

The UK government’s self-imposed challenge is to position itself as a global leader in responsible AI innovation. This will require a nuanced approach: creating regulatory environments that are stringent enough to ensure safety, yet flexible enough to foster cutting-edge technological development and attract international investment. For business, 2025 will see increased focus on developing transparent AI governance protocols, investing in ethical AI training and infrastructure, building cross-functional teams that blend technical, legal, and strategic expertise, and engaging proactively with emerging regulatory frameworks.

AI’s convergence with HPC and quantum computing

The converging trajectories of AI and high-performance computing (HPC) will continue to fundamentally reshape our digital infrastructure, with power consumption and computational density emerging as critical issues. The current AI boom is driving an unprecedented transformation in data centre architecture, where the traditional models of computational scaling are being disrupted by the massive energy and thermal demands of large-scale AI training and inference. Advanced AI models now require computational clusters that can consume megawatts of electricity, pushing infrastructure designers to reimagine cooling technologies, power distribution, and sustainable computing paradigms. Liquid cooling, immersion technologies, and novel semiconductor designs are expected to move from experimental to mission-critical.

Another exciting area is the potential of quantum computing and AI. The most transformative potential lies in quantum machine learning’s ability to handle intrinsically complex, non-linear problems. However, significant challenges remain. The next 12-24 months will be crucial in demonstrating whether quantum-AI systems can move from laboratory curiosities to genuinely transformative technological platforms.

John Buran, CEO, Flushing Financial Corporation

With interest rates starting 2025 considerably lower than 2024, banks are very differently positioned than they were last January. When it comes to commercial real estate, there could be a bifurcated approach to lending, with community banks, such as our own, capturing market share as larger institutions pull back from the sector. The new lower rates will also allow banks to lower funding costs, which should enable banks to be more opportunistic and find sustained growth well into the second half of the year.

Jeff Hallenbeck, Head of Payments, Forter

Acceptance fees will continue to rise

While higher rates are nothing new for merchants, the ability to fight back is. More merchants will look to adopt strategic features such as least cost routing in order to gain leverage against ever-rising network fees. The question is, will the domestic/alternative networks raise their fees as well, and at what point does regulation step in?

Using ML/AI in payments will expand well beyond fraud management

ML/AI in payments is evolving beyond fraud management, with new use cases streamlining decision-making across transactions. For example, it can help determine whether to use network tokens or account numbers based on issuer authorization rates or identify the optimal processor for a transaction by analyzing cost, conversion, and reliability. These advancements enhance efficiency, reduce costs, and improve customer experiences, showcasing AI’s growing influence in the payments ecosystem.

Merchants will continue to demand processor-agnostic solutions

Merchants are increasingly adopting multiprocessor environments to enhance redundancy, optimize costs, and improve transaction approval rates. As a result, they are demanding processor-agnostic solutions for critical functions like tokenization, fraud prevention, and 3DS authentication. These agnostic tools enable merchants to maintain flexibility and avoid vendor lock-in, allowing seamless integration and consistent functionality across multiple processors. By leveraging processor-agnostic solutions, merchants can better adapt to changing market needs, reduce operational complexity, and ensure a more resilient payments infrastructure.

Authentication regulation will continue to expand to new markets

Japan is poised to implement new authentication regulations in March 2025, reflecting the recent trend of advanced markets adopting regulatory measures to enhance consumer protection. We anticipate that additional APAC markets will consider similar approaches in the latter half of 2025, mirroring the adoption trajectory of EMV chip cards, where liability shift occurred in Europe in 2005 and was followed 10 years later in North America.

Acquirers will have to re-evaluate their high-risk merchant portfolio

With Visa’s VAMP program coming to market, a new light will be shined on high-risk merchants in acquirer’s portfolios. Acquirers will need to address this by reducing fraud rates on high-risk merchant accounts, or moving away from underwriting specific types of businesses altogether. How will this change ultimately affect the partnership/M&A landscape in the acquiring world? Time will tell.

More merchants will move towards offering alternative payment methods – notably Pay-by-Bank is being pushed by US legislation

The Consumer Financial Protection Bureau (CFPB) has introduced new open banking rules for the US market, enabling customers to authorize third parties to access their account information and initiate secure payments via “pay-by-bank.” Under these regulations, banks are required to provide this functionality without charging fees, with compliance expected between 2026 and 2030.Pay-by-bank offers advantages such as lower transaction costs—since these payments bypass card networks—and historically lower instances of fraud. However, consumer adoption varies by region, with US consumers trailing behind other markets. Additionally, pay-by-bank systems can be challenging to implement, lack a credit option, and may experience settlement delays in some cases.

Wil Hamory, Risk Management Expert and Fintech Lead, Founder Shield 

We’ve supported legacy players and early-stage tech companies in 2024 as they team up to create a unique pipeline, bringing products to the financial market at an alarming speed. However, this disruptive technology comes with both opportunities and challenges in 2025 — mainly cyber vulnerabilities. Unfortunately, these new threats can snowball into management liability lawsuits in the blink of an eye.

For example, we’ve seen tech companies in the headlines that have overstated their AI capabilities or missed a software update, leading to expensive investor suits. And, of course, investors look to someone to point a guilty finger at. More often than not, the company leaders end up taking the blame and find themselves in hot water—and it all started with a cybersecurity breach or digital error.

Unsurprisingly, there is a massive overlap of Directors and Officers (D&O) and Cyber Liability coverage. We expect financial service leaders to tighten cybersecurity measures to protect themselves and the company. Lastly, underwriters will keep pushing for cybersecurity measures that protect a business’s digital landscape.

Kiran Hejmadi, Senior Vice President, Product Strategy, FSS

Artificial Intelligence

As we look to the future, the payments landscape in India is set to evolve dramatically, fuelled by developments in Artificial Intelligence (AI), regulatory requirements around further safeguarding interest of Indian customers, regulators active engagement with the industry to further the cause of innovation and growth in real-time payments. These trends are redefining security, speed, innovation and personalisation, creating a more inclusive financial ecosystem and setting benchmarks for global markets.

AI is transforming the payments ecosystem by driving real-time fraud detection, predictive analytics, and operational efficiency. Across the industry, banks and payment providers are utilising AI to analyse vast transaction datasets, identify anomalies, and enhance customer experiences. For instance, AI-driven fraud management tools have become a mainstay, ensuring secure and seamless transactions. At FSS, we have integrated AI capabilities into our platforms to help financial institutions stay ahead of emerging threats and provide tailored solutions for diverse customer segments.

Real-Time Payments (RTP)

India’s Unified Payments Interface (UPI) has set the global gold standard for real-time payments, fostering instant, cost-effective transactions. As RTP adoption expands, the focus is on creating scalable and globally interoperable ecosystems to meet the needs of consumers and merchants alike. Industry leaders, including FSS, are developing comprehensive RTP solutions to support diverse use cases such as peer-to-peer transfers and merchant payments, enhancing financial accessibility across urban and rural markets.

Tokenisation

As digital payments surge, tokenisation is becoming a cornerstone of secure transactions, replacing sensitive card data with unique tokens to minimise fraud risk. Industry-wide efforts are ensuring smoother and safer e-commerce and in-app payment experiences, instilling trust in digital ecosystems. FSS has been a key contributor to this space, offering tokenisation solutions including COFT, Alt-ID, CoDT, Push Provisioning, that align with evolving regulatory standards and bolsters user confidence.

Eric Noll, CEO, FusionIQ

2024 Year in Review

In 2024, significant strides were made in wealthtech solutions for retail banks: cloud-native platforms continued to reshape the financial services sector, delivering reduced operational costs and greater flexibility, enabling institutions such as banks and credit unions to better meet evolving consumer demands. These turnkey solutions allowed seamless onboarding of digital investment services and set the stage for holistic financial ecosystems. This year solidified the foundation for democratised, technology-driven wealth management, paving the way for broader adoption and deeper integration across platforms.
The past year also witnessed significant strides in integrated finance, with a growing focus on greater access to wealth management while enhancing customer experiences. Digital wallets emerged as transformative platforms, evolving beyond payments to include integrated wealth management tools, thereby broadening access to investment opportunities for a wider audience. By merging these functionalities, such platforms empower users to manage investments, savings, and financial growth seamlessly, expanding financial access once controlled by large institutions. Currently at an early stage, these tools are expected to reach more consumers: 65% of adults in the U.S. use a digital wallet at least once a month, with 53% using it more frequently than traditional payment methods.

2025 Forecast

Looking ahead, 2025 will be a transformative year for wealth democratisation. Accelerated by turnkey wealth-as-a-service platforms, more consumers will access sophisticated investment tools through financial institutions and digital wallets. Cloud-native technologies will continue driving this shift, offering scalability, flexibility, and enhanced customer experiences. Seamless integration will redefine wealth management’s reach, enabling financial institutions, including community banks and credit unions to adopt digital investment services. This reimagining of “share of wallet” will expand market reach and redefine consumer expectations around accessibility and convenience. Lower costs and enhanced accessibility will allow more users, including gig workers and those previously underserved by traditional banks, to invest and grow wealth.

As consumer preferences shift towards simplicity and immediacy, 2025 promises a more inclusive and technology-driven financial ecosystem. Ultimately, this evolution reflects a larger trend toward meeting investors where they are, making wealth management a universal possibility rather than a privilege.

Thomas Götz, Director of Managed Issuance Services, for Financial Platforms, G+D

Fintechs and banks will lead the charge on financial accessibility

In 2025, accessibility will no longer be seen as an added benefit but as a fundamental expectation across the financial industry. Fintechs and banks will embrace this shift, leveraging inclusive design, advanced technologies and strategic partnerships to deliver barrier-free payment experiences that cater to diverse customer needs.

The European Accessibility Act, set to take effect in June 2025, will serve as a key driver of this transformation. Its emphasis on inclusive payment solutions will push accessibility from a niche focus to a mandatory industry standard. Fintechs and banks will lead the charge, integrating solutions such as AI-driven sign language translation, biometric authentication and accessible onboarding processes that remove barriers for individuals with disabilities and impairments.

Collaborative partnerships with technology providers and advocacy groups will be crucial for fintechs and banks to co-create solutions that address diverse needs. We’re likely to see more initiatives involving users with disabilities in product development and design, ensuring products and services are shaped by the lived experiences of their users.

Through these efforts, fintechs and banks will begin closing the financial accessibility gap, setting a new standard for inclusivity and proving that accessibility is a driving force for innovation and a key to growth in an increasingly competitive market.

Recycling payment cards at end of life levelling up

In 2025, fintechs and banks will deepen their commitment to sustainability across the entire lifecycle of payment cards, from production to disposal or repurposing. Many new cards will be manufactured using recycled or plant-based materials, reducing reliance on single-use plastics and lowering CO2 emissions. This shift will cater to increasingly eco-conscious customers, who prioritise environmentally responsible choices.

The expansion of end-of-life management programmes for expired cards will be equally transformative. Banks can offer accessible options such as card drop-off boxes at branches, ATM-based collection systems or secure mail-in services. Once collected, expired cards will be securely wiped of personal data and recycled into useful products, giving these materials a second life while reducing waste.

Santander Bank offers a compelling example of this approach in action. By recycling expired payment cards into community furniture, Santander has already repurposed a few thousand kg of plastic into almost 250 benches, demonstrating the tangible benefits of such initiatives, including community enrichment.

These recycling initiatives will help address growing customer demand for sustainability and showcase banks’ commitment to environmental stewardship. By embracing both recycled materials for new cards and robust end-of-life solutions, fintechs and banks will be able to lead the way in creating a more sustainable payment ecosystem.

Michael Haney Head of Product Strategy, Galileo Financial Technologies

Looking to 2025, and the potential easing of regulatory scrutiny under the new administration, bank consolation may also increase. This will enable them to build scale and fund the technology investment they need to modernise.

Both mature non-bank fintechs that grew market share and traditional banks will be on the offensive in 2025, creating new competition for top of wallet. The battle for digital identity will intensify as more successful fintechs will fund their diversification strategies by acquiring minor players, launching new lending products, and entering new markets.

Rafie Faruq, co-founder and CEO, Genie AI

Companies that have prioritised product-led solutions will excel, now that agentic AI is becoming a key part of the legal workflow. Big law firms will give up trying to adopt AI, and focus on what they are good at – human, high touch services. Small law firms will either adopt AI quickly and take on bigger law firms, or fail to adopt and may struggle to survive. Companies will carry on in-housing more legal work as AI helps them to do more with less and reduce external fees.

Jason Osborne, Head of Banking & Capital Markets, North America, Genpact

As we see proposed regulations, like Basel III Endgame, continue to evolve, banks will prioritise optimising risk models to address every component of potential deals – the good, bad, and ugly. This will necessitate strengthening data and analytics capabilities through AI.”

Beyond optimising individual risk models, banks will shift toward integrated risk management. This means AI will not only assess credit or market risk but also synthesise multiple risk categories (e.g., liquidity, operational, and compliance risks) into a unified view. Banks that leverage AI for predictive risk simulations can gain a competitive advantage by forecasting outcomes and adjusting strategies preemptively.

Basel III Endgame will necessitate enhanced data integrity. Banks will need to build real-time, AI-driven analytics platforms that integrate seamlessly with risk management tools, enabling continuous monitoring of risk exposures. Regulatory compliance isn’t just about meeting current standards but being proactive in anticipating new changes.

Optimising risk management won’t just be about analytics. It will also involve automating risk reporting and regulatory compliance processes to reduce costs and improve speed. This is where machine learning algorithms can automate the identification of risk anomalies, fraud detection, and stress testing – freeing up human resources for strategic decision-making.

With the increased reliance on AI and data analytics, banks will need to invest heavily in upskilling their teams. Expect to see banks hiring data scientists, risk technologists, and AI ethicists who can balance compliance with innovation.

Carlos Kazuo Missao, Head of Innovation, US, GFT

Open banking will make it easier for consumers to select the banks and financial providers that best align with their personal expectations. As this happens, banks will enter a new race to improve their digital experiences, security, and product offerings in order to maintain their customers’ loyalty for the long run.

Open banking regulations are maturing around the world, making consumers the real owners of their data and enabling them to transfer it between financial organisations in a safe way. This streamlined process removes many of the pain points that have traditionally come with opening a new banking, savings or credit account, onboarding a lending process, or acquiring goods.

For consumers, this means the ability to switch providers at the click of a button. For banks, it means increased competition. But it also gives them new insight into the types of products and services customers are looking for from other providers. Based on what they learn—in some cases, the hard way—open banking will be key to developing bespoke offerings that set banks up to attract new customers and retain existing ones for the long term.

Andrew Haslip, Head of Content for Wealth Management and Asia-Pacific (FS), GlobalData

Wealth trends to watch 2025

Looking forward into 2025, GlobalData sees private wealth managers having to continue the productivity investments to meet the needs of the next generation of investors all the while being buffeted by major geopolitical challenges that are often directly contradictory to the long-term strategy they are pursuing.

So, while dealing with international trade disruption, regulatory divergence and resurgent inflation will certainly be keeping CEOs up at night, expect them to continue investing in digitization, ESG investments and international expansion. Here is a selection of what the GlobalData Wealth Management team is watching for in 2025.

Offshore wealth management will need to be nimble to cope with severe international trade disruption

With a trade war in the offing not just between China and the US but also the US and its Western trade partners, offshore wealth managers will need to adapt quickly to shifts in trade policy. It is important to remember that international business interests have long been a key driver of HNW offshore investing, 12.4% globally in 2024 but much more for markets like Indian and China.

And 2025 will see severe disruption to such international businesses, making it uncertain how much new business will be generated in as week as which offshore centers are likely to win out, particularly given the US is likely to be at the center of much of the disruption.

Dealing with cryptocurrency in mainstream finance

The latest crypto-winter is over and 2025 is likely to see a sustained run up in key coin prices and an explosion of crypto-investment products and channels. All wealth managers will need to revisit their strategies and policies to crypto investing. Clients will demand greater exposure to this fast-growing investment and the industry itself will also increasingly become a source of HNW investors, provided wealth managers are able to safely conduct due diligence and KYC checks on their wealth.

Inflation and interest rates

A key concern for investment and asset managers in 2025 will be the shifting and uneven inflation outlook due to trade disruption and its attendant economic impact; coupled with changes in interest rates around the world and how these are feeding through to various markets. What does this mean for equity investments vs fixed income and cash but also markets like commodities and property.

Regulation

Always a factor for wealth managers. Key regulatory concerns will be around any anti-ESG or fairness rules in the US as well as more operational concerns like DORA, with AI regulations also a key concern. A major issue in regulation will be managing regulatory divergence in key areas.

ESG

Wealth managers will continue investing in building up their ESG, thematic and Impact Investing capabilities but the focus will shift away from overtly environmental to social and governance criteria. However, they will have to do it in a political climate in North America that is increasingly hostile to the concept as a matter of ideology. We expect continued development of ESG funds, investment tools and assessment tools but with launches and roll outs occurring in Europe and Asia.

Shift towards India

Given the expected geopolitical tensions between the US and China; along with the continued strong economic growth of India; there will be a shift in international banks, wealth and asset managers’ focus towards India. Both as a market for investments and a source of wealth investors in the country as well as the substantial Indian diaspora (both NRI and those of Indian origin) in key markets in the Middle East and the Anglosphere.

Gen Z and next generation investing

Given ongoing intergeneration wealth transfer as well as the growth in the age cohort, more wealth managers and fintechs will roll out propositions, products, and services for this age cohort. As this generally affluent (more so than Millennials were at a similar age) demographic ages, and becomes more economically active, their needs and views will come to dominate the thinking of wealth managers in a way that neither Gen X and Millennials managed to do while the Baby Boomers were the crucial demographic.

Cybersecurity and fraud

Attacks will continue to grow in 2025 as criminals adapt new technology to fraud schemes and bad actors, many driven by the dicey geopolitical scene, seek to disrupt leading wealth brands or financial markets. Continued investment in IT security will be crucial.  The growth of crypto investments will also raise the role of crypto in fraudulent investment schemes as well as in the laundering of the proceeds of all illicit money. Wealth managers will have to better guard their clients against such schemes as well as ensure they do not become conduits for illicit money washed via crypto themselves.

Ed Thomas, research director strategic intelligence, GlobalData

Agentic AI will be a top priority for tech companies in 2025. The next frontier in AI is agentic AI, which employs intelligent autonomous AI agents to carry out complex, multi-step reasoning, adapt to environmental changes, understand context, and take action to pursue objectives. Agentic AI differs from GenAI and conversational chatbots in that agentic AI systems have memory and can reason and search for
information outside the LLM.

Intelligent AI agents are being developed for a wide range of consumer, enterprise, and industrial purposes. Agentic AI holds the promise of improving operational efficiency and enhancing customer experience. Early adopters include healthcare, banking, travel and tourism, scientific research, and energy and utilities.

Steven Blitz, Managing Director, Global Macro, Chief US Economist, GlobalData TS Lombard

2025 outlook – strong growth, if policy can unlock it

The road to recession runs through the asset side of private sector balance sheets, the road to growth runs through liabilities. The 2025 outlook consequently depends on reviving the private sector’s willingness to lever assets to expand capital spending. The stars are aligned for this outcome.

There is the outsized liquidity base off which the private sector can borrow and spend, after more than a decade of deleveraging and monetisation of the deficit, a positive yield curve incentivising banks to lend, and the promise of lower taxes and reduced regulation, among other incentives.

Inflation risk is also real – this will be the first time in decades when an expansion year is underpinned by easy monetary and fiscal policies combined with an overhang of liquidity. A positive yield curve and a wider term premium is the immediate result. A weaker dollar should be as well, but tariffs and still slow global growth may keep a bid under the dollar in the near term.

No outcome is ever assured

Potentially working against this upside outlook is the expanding budget deficit and the Fed’s willingness to use its balance sheet to manage the consequent upward pressures on real yields. Then there is the potential for the Trump administration to be chaotic enough in its execution, and too late in responding to the unintended consequences of its actions. These are among any number of events that could stall private spending plans, weaken equities, and further reduce the demand for labour. The current economy clearly leans towards growth, but things can unwind quickly enough to set off a mild recession.

Major new initiatives that incoming administrations put into play always carry the risk of significant unforeseen consequences (see Biden and inflation)

The potential risks attached to Trump’s promises are potentially significant as well, and perhaps more so by threatening to upend the global trading system just when the US need for global capital is large and growing. As evidence, note that the US net national saving rate (household and business saving plus government dissaving) is effectively zero as a percent of GDP and keeps shrinking. That, in turn, reduces domestic business capital investment net of replacement. The Fed balance sheet has, for now, sustained capital spending by keeping real rates from rising to where they could go if, instead, 100% of the Federal budget deficit had to be financed in private markets. The Fed, through QE, essentially injected itself as another saver into the S=I equation.

Nevertheless, we take the upside bet on growth, relying on Trump’s sensitivity to the equity market as barometer of his success and the deep market experience of his team to keep some of his more chaotic instincts in check. These days, the “vigilantes” toil in the equity market, where households are overinvested. In turn, high volatility risk keeps money earning a safe positive real return in cash rather than moving into the real economy. To be clear, the money is there to supporting leveraged spending – household liquidity remains at extraordinary levels, so too the ratio of net worth to income.

The challenge for Trump’s policies is to reverse the long rising trend of firms using internal cash to fund dividends and buybacks rather than capital spending

On a four-quarter moving average basis, some 70% of internal funds are being used to return capital to shareholders. The financing gap (capex minus internal funds) is, on the other hand, negative. The two series have been on a diverging trend since the 2001 recession – not surprising given the shift to use productive capacity outside the US and, in turn, earn the wide margin. This structure creates little reason to hold onto the capital. Trump’s proposals are being designed to shift the incentives back towards using internal cash to underwrite domestic capex.

Banks, being intermediaries, have those high cash balances among households and business available to lend

What banks need is for the short end of the yield curve (3M-3Y) to flip positive to restore profit in lending. It is almost there and looks set to return to about a 50BP positive spread – good news for bank earnings. At present, the inverted curve is helping to restrain growth in loans and leases to around 2% SAAR, below inflation and, more critically, nominal GDP. The broader banking picture is too many deposits relative to loans, a direct result of QE. Banks are also holding a higher percentage of HQLA than required. When the time is ripe, as from late-21 to late-22, deposits at the Fed will be swapped into loans. Inflation is always financed, and banks are ready to do their part. The Trump administration is also angling to reduce bank capital requirements – which could significantly add to bank lending potential.

Given this expected favourable backdrop in 2025, economic and regulatory, and current upward momentum in growth, it is reasonable to expect liquidity balances to shift into the real economy during the year ahead. 

The pace of real nonresidential and residential fixed investment should, at least, rise to their median Y/Y growth rates of the 2012-19 period in 2025 – which was not very high by historic standards. 

The great era of deleveraging balance sheets is primed to end but it is up to Trump and his policies to spark the shift

On a Q4/Q4 basis, expect real GDP to grow 2.9% (2.7% this year), core inflation to be around 3%, and unemployment to end up at 4%. Powering the economy will be 4.6% real growth in non-residential fixed investment (4% this year) and 5.2% growth in residential fixed investment (1.7% this year). Real Federal spending should slow from 24% of GDP to 23.5%, essentially 3.8% real growth (Q4/Q4), down from 4.3% in 2024. As for the Fed, inflation at 3% is not their objective but neither is creating a recession to pull inflation back to 2%.

If real growth is above “potential” as expected, and inflation is around 3% and leaking higher, with a 4.25%-4.50% funds rate in place, the implication is for a higher neutral real rate for funds — but the FOMC will be hard pressed to find anyone to support tighter policy. Trump, on the other hand, may want policy rates lower, but he will be hard pressed to find the route to a lower structure of yields without creating an inflation/dollar problem given the budget deficit running at 6%-7% of GDP. Productivity is not yet a proven escape route. Current numbers are too finance sector biased to be believed and reshoring manufacturing activity lowers productivity growth by pulling work hours back into the domestic economy — the bulk of the US trade deficit is US firms sourcing production outside the US.

Looking past 2025

Unsettling risks loom, beginning with the current easy monetary and fiscal policies at a time of economic expansion, with an overhang of liquidity, and the potential for tariffs to upend the system of global capital flows in place since the mid-80s. The Fed’s balance sheet is the fulcrum on which inflation, growth, and the sustainability of needed foreign capital inflows are all balanced. Keeping such balancing acts in place become a problem when things begin moving too far out of kilter. Inflation is always financed, and plenty of financing will be available in 2025 for loans and M&A. Then there is the upward pressure on wages as improved growth tightens labor markets. Lastly, and perhaps most significant, are broad-based tariffs and the potential knock-on negative impact on global capital flows.

The economy of the 1960s is not exactly the economy of today, but similarities including the direction of monetary policy are troubling

The 1960s mismanagement of domestic policy within a fixed-exchange rate system and growing global trade led to the collapse of Bretton Woods and 60s inflation turned into a series of global commodity shocks that sent 70s inflation spiraling upward. Today, despite net inflows of capital equaling 4% of GDP and net national saving at 0%, the stable system of global capital inflows will be challenged by a massive tariff scheme used, in part, to help finance the budget deficit. If this Fed must choose between shoring up the current system of capital at the expense of curtailing real growth, they will lean to keep growth going.

In sum, all is set for a strong year of growth, and it will be stronger if Trump’s policies can unlock household and business leverage to support capital spending – what we expect. If, however, policy chaos instead causes people to be more cautious than daring, recession risk is very much present.

The ultimate barometer for Trump is the equity market, and this should keep policies in line with sparking domestic capital spending rather than scaring it – and Fed policy will be more supportive than not. As markets adjust to a different trajectory for the funds rate, I expect the 10Y yield to be pushed over 5% and perhaps higher with the term premium widening back to 100BP. Beyond 2025, easy monetary and fiscal policies during an economic expansion with an overhang of liquidity while, at the same time, upsetting global trade flows to the extent capital flows are compromised in response, creates a problematic 2026.

Zac Maufe, Global Head of Regulated Industries, Google Cloud

The AI tipping point: How banks will drive real results in 2025

As we approach 2025, the financial services industry is undergoing a significant transformation fuelled in part by generative AI (gen AI) advancements. Throughout 2024, many gen AI pilot projects shifted from the experimental phase into full-scale production, and the momentum continues to build as early adopters see tangible results from their investments.

2025 will serve as an industry tipping point for AI innovation with global scale-up in gen AI deployments across the sector. This shift comes at a critical time for the industry, which faces multiple challenges, including an increasingly competitive environment, a skills and talent shortage, and increasing consumer expectations. Financial institutions have a unique opportunity to embrace gen AI to tackle these challenges head-on, and drive greater efficiency, security, and customer satisfaction.

Four key trends will drive gen AI adoption for banking in 2025: intuitive search, AI agents, customer experience, and security. Let’s explore each trend and its anticipated impact on the industry in the coming year.

Intuitive search will supercharge productivity 

In 2025, gen AI will redefine knowledge management for financial institutions. Today, the unfortunate truth is that while most financial services organizations are rich in data, they are unable to convert that data into actionable insights without manual intervention.

For example, market analysts and compliance officers often spend significant time and effort sifting through information dispersed across various documents and departments. AI-powered intuitive search and advanced summarization capabilities will allow employees to locate and analyze information faster and more effectively. Rather than data wrangling, they can focus on higher-level analysis and decision-making.

These tools will provide instant access to essential insights, streamline workflows, and improve productivity. While subject matter experts will still play a crucial role in validating and interpreting information, new search capabilities will allow them to spend less time gathering data and more time deriving value from it.

The rise of the AI agent

AI agents are no longer a futuristic fantasy; they’re here, and they’re ready to work. These digital assistants are poised to support many routine tasks, such as underwriting loans, adjusting claims, and generating risk reports. This will not only boost efficiency but also free employees to focus on more complex and strategic work, adding value where only human expertise can.

But it’s not just about cost savings. AI agents will also play a key role in driving revenue growth. By analysing vast amounts of data, AI can build a deep understanding of each customer’s financial situation, goals, and preferences. This will enable banks to offer hyper-personalised experiences, such as recommending the right products, providing timely financial advice, and even anticipating future needs. The experience would extend across all touchpoints with the customer, creating truly personalised and connected omnichannel banking.

Multimodal AI ushers in a new era of customer service

Banking apps have become increasingly complex, but AI can simplify the user experience. Multimodal AI, with its ability to process various data types like text, images, and audio, takes this simplification a step further. By understanding the nuances of human communication, multimodal AI can provide a more personalised and intuitive customer experience.

Natural language interfaces allow customers to interact with their bank in a more human way but have often been too brittle to solve more complex questions. Imagine being able to ask your banking app: “How much did I spend on coffee last month?” The AI, analysing your transaction history and even recognising images of receipts, can quickly identify and provide the answer. This seamless integration of information and intuitive understanding of customer requests is the future that multimodal AI offers the banking industry.

AI will emerge as crucial defence against fraud

The threat landscape is evolving, with bad actors using gen AI to create new attacks and exploit vulnerabilities in banking systems. But financial institutions are fighting back with their own AI-powered defenses. Our recent ROI of Gen AI survey found that 3 in 5 financial institutions are seeing measurable improvement in their cyber security posture by using gen AI.

Today’s fraudsters often rely on unstructured data sources like forged documents or suspicious online activity – things that are incredibly difficult to monitor manually. At the same time, fraud monitoring systems generate extensive alerts, leaving security operations centers often overloaded. AI’s capabilities in prioritising alerts, analysing unstructured data, and identifying complex patterns can increase fraud detection and protect customers against threats.

Rob Burnett, Director of Startup Banking, Grasshopper Bank

Seamless payments, access to capital and maximum yields top of mind for SMB and Startup clients

Clients want more functionality, and are less willing to accept slow and clunky user experiences. Low fees, competitive interest rates, and robust bookkeeping/accounting support are also essential. Expanding solutions for seamless payments will be crucial. As interest rates decline, finding innovative ways to maximise yields on cash holdings will remain a priority for startups.

Pete Chapman, Chief Technology Officer, Grasshopper Bank

AI poised to play an ever-greater role in CX and risk management

In 2024, the banking industry accelerated its adoption of AI-driven technologies to enhance efficiency, customer experience, and compliance amidst economic challenges and evolving regulations. Going into 2025, AI is poised to play an even greater role, changing operations through intelligent automation, predictive analytics, and personalised customer interactions. 

Luther Liang, Director of Product, Grasshopper Bank

Getting paid, access to affordable capital/funding, earning strong yield on their cash, and managing cash flow remains top of mind for most small businesses. 

Vincent Maglione, Chief Information Security Officer, Grasshopper Bank

AI will be the leader in technology impact in 2025. Predictive analytics will help anticipate and mitigate risks by analysing data trends, improving fraud detection, credit scoring, and operational efficiency. In the security world, I anticipate biometric authentication processes will see broader adoptions as passwords are becoming less effective. 

Chris Mastrangelo, Chief Risk Officer, Grasshopper Bank

BaaS to expand, while navigating an intricate regulatory landscape

In 2024, one of the key takeaways for the banking industry was the critical importance of building strong risk and compliance infrastructures to keep pace with rapid tech advancements, particularly in BaaS and embedded finance. We saw that banks offering BaaS must navigate intricate regulatory landscapes while managing digital fraud risks and staying compliant with increasingly complex regulations.

AI and regtech are set to revolutionise compliance and risk management by enabling banks to process large volumes of data for real-time monitoring and anomaly detection, enhancing their ability to pre-empt and respond to potential threats. Machine learning can identify patterns in transaction data that signify fraud or compliance risks, while automation in regulatory reporting can help institutions keep pace with the complex and ever-evolving regulatory landscape.

Regtech solutions will empower banks to be more agile in adapting to regulatory changes, enhancing overall risk management and compliance efficiency. With the growth of BaaS, these technologies will become essential for ensuring partner compliance and maintaining consistent oversight across all digital touchpoints.

Lauren McCollom, SVP, Head of Embedded Finance, Grasshopper Bank

In 2025, heightened regulatory scrutiny will remain a dominant trend, with consent orders and enforcement actions surfacing past missteps and reshaping compliance priorities. Banks will need to proactively address legacy issues while investing in advanced regtech solutions to ensure agility and transparency. –

Ian Manocha, CEO, Gresham

Digital currencies and DeFi go mainstream

In 2025, digital currencies and decentralised finance (DeFi) are set to become integral to mainstream payment systems. This shift will create significant pressure on existing data management pipelines and applications, which must adapt to support the transactional and compliance demands of these innovative technologies.

As adoption accelerates, firms will need to modernise their infrastructure to accommodate decentralised, borderless transactions while ensuring robust security and scalability. This transition heralds a pivotal moment for the financial services sector, as traditional frameworks evolve to align with the realities of digital and decentralised economies.

Expanding scope of data governance

The scope of data governance will broaden in 2025, driven by regulatory frameworks like the EU AI Act. Such governance initiatives will extend beyond traditional data management to encompass Artificial Intelligence (AI), chatbot oversight, and emerging technologies. With AI systems increasingly integral to business operations, ensuring accountability, fairness, and transparency will become central to governance efforts.

Financial institutions will need to implement rigorous standards and practices to manage these complex technologies effectively, safeguarding both operational integrity and compliance in an evolving regulatory landscape.

Generative AI revolutionises enterprise data

Generative AI tooling will transcend unstructured data applications, unlocking value across broader enterprise data assets in 2025. This technology will revolutionise how organisations leverage data, with chatbots and other AI-driven tools supplanting traditional business intelligence (BI) and reporting methods.

This significant shift will enable more dynamic, conversational access to insights, fostering greater agility in decision-making. As generative AI matures, it will redefine the enterprise’s approach to analytics, driving more intuitive and impactful use of data to achieve strategic goals.

Data fabrics and meshes gain traction

Data fabrics and meshes will gain prominence in 2025, reflecting the growing need for flexibility and seamless data distribution. These architectures breaking down barriers to data use, enabling organisations to access, share, and govern information more efficiently.

Enterprise data management (EDM) solutions must evolve to support this shift, offering greater adaptability and decentralised capabilities. By embracing these innovative approaches, firms can overcome legacy constraints, foster collaboration, and maximise the value of their data assets in an increasingly interconnected ecosystem. This trend signals a move towards more agile and scalable data infrastructures across the financial sector.

Gregor Stolz, Account Director, Gresham

AI hype begins to fizzle

While Artificial Intelligence (AI) has dominated the financial services conversation in recent years, 2025 will mark the beginning of its decline, reminiscent of the blockchain hype cycle. As initial excitement gives way to scrutiny, firms may face challenges in scaling AI solutions beyond pilot projects, exposing gaps between lofty expectations and practical application.

While AI will remain a valuable tool in niche areas, its broader revolutionary impact could stall, prompting firms to reassess investments and focus on tangible, ROI-driven outcomes. The industry may soon ask, “What happened to the AI revolution?” as attention shifts to emerging priorities.

Rising cost pressures for non-US firms

Non-US financial institutions are bracing for significant cost pressures in 2025, driven by global turbulence exacerbated by policies from the Trump administration. These financial strains will lead to sparking further consolidation in the European banking sector as firms seek to compete with dominant US players.

Strategic mergers, such as a potential UniCredit and Commerzbank partnership, could emerge as a means of survival and growth. These pressures underline the urgency for European institutions to streamline operations, cut costs, and explore collaborative strategies to level the playing field against American banking giants.

Decline of non-core activities

With cost pressures mounting, financial institutions may start to deprioritise non-core activities like Environmental, Social, and Governance (ESG) initiatives and Diversity, Equity, and Inclusion (DEI) programmes. We may begin to see a shift to these areas become largely compliance-driven, with firms focusing only on meeting regulatory requirements.

While such initiatives gained prominence in more stable economic conditions, their perceived lack of immediate financial returns could make them vulnerable to budget cuts. This trend reflects a recalibration of priorities as institutions channel resources toward addressing fundamental operational and market challenges.

Strategic shifts in a competitive landscape

The convergence of rising costs, industry consolidation, and shifting priorities will redefine the financial services landscape in 2025. For non-US firms, survival hinges on adapting to a turbulent global market while aligning with stricter regulatory frameworks.

Financial services institutions will increasingly need to focus on their core competencies, rethink competitive strategies, and embrace transformative changes to navigate an increasingly polarised and competitive environment. Whether through partnerships, operational overhauls, or technology adoption, the industry must evolve to sustain relevance and profitability in the face of growing pressures.

Julian Trotinsky, Global Director of Solutions Engineering, Gresham

Growing data volumes

The exponential rise in data volumes shows no signs of abating in 2025. Over the past decade, financial services firms have witnessed an annual surge in data production and consumption, driven by regulatory demands, digital transformation, and the proliferation of new data sources.

I’d expect to see an increase of at least 10% in data volumes over the next 12 months, fuelled by ongoing innovation and increased reliance on data-driven decision-making. As firms navigate this trend, they must ensure robust data governance frameworks and scalable infrastructures to handle the complexities and opportunities associated with this relentless growth.

Expanding AI and ML use cases

Artificial Intelligence (AI) and Machine Learning (ML) will solidify their role as transformative forces within financial services in 2025. Recent industry conferences have revealed a wave of enthusiasm and curiosity surrounding these technologies. Attendees have showcased innovative use cases while exploring new applications tailored to specific challenges.

Based on the last couple of conferences I have attended, we are already seeing firms asking the  question: “Have you considered this use case?” – a clear indication of the growing demand for AI-driven solutions. From predictive analytics to anomaly detection, financial institutions are set to leverage AI and ML to unlock unprecedented operational efficiency and customer insight.

Accelerating data modernisation

As financial institutions grapple with surging data volumes and the limitations of legacy systems, data modernisation is becoming a strategic priority. We would expect to see intensified discussions with clients in 2025 regarding initiatives to centralise data, enhance interoperability, and retire outdated technologies.

Modernisation efforts are not just about efficiency; they aim to enable firms to derive greater value from their data assets while ensuring compliance and scalability. By embracing cutting-edge technologies and architectural upgrades, firms can future-proof their operations and remain competitive in an increasingly data-centric industry.

The push for real-time capabilities

Real-time data capabilities will take centre stage in 2025, particularly as regulatory shifts like T+1 settlement gain traction across Europe. A heightened demand for solutions that enable instantaneous data collection and reconciliation is predicted.

The financial industry’s appetite for real-time insights stems from a need to mitigate risks, enhance decision-making, and meet customer expectations in an era of instant gratification. Firms that invest in real-time infrastructure will not only align with emerging compliance standards but also gain a strategic edge by responding to market dynamics with unparalleled speed and precision.

Hal Cook, senior investment analyst, Hargreaves Lansdown

Don’t try and be too clever

Stick to your original plan – markets can move quickly and it’s easy to get carried away. Set a plan for an investment before you invest and then stick to it once invested.

Robert Farago, head of strategic asset allocation, Hargreaves Lansdown

Stay humble – and stay invested

At this time of year, we receive investment outlooks for the year ahead from many of the world’s finest investment thinkers. Their forecasts are backed up by detailed analysis, convincing charts and a compelling narrative. The problem is they don’t agree with one another. Some think the exceptional performance of US companies will continue, others argue that exceptionally high valuations will weigh them down. Most argue that growth is set to remain robust but a few point to signs of a looming recession. 

After 37 years of investing, my resolution is to remain humble about my ability to predict the future. Don’t double down on yesterday’s winners. Don’t get scared out of markets by the sirens predicting the next great depression. Understand that investing offers you a long-term return above cash – in return for accepting the risk of losing money in the shorter term. So, stay invested but diversify across different sources of risk and return.

Mark Hicks, head of Active Savings, Hargreaves Lansdown

2024 has been a challenging year for savers, with base rate cuts and the prospect of lower rates in the future forcing banks to reduce their rates from the highs of 6% in 2023 to below 5%. However, there are signs that the biggest falls may be behind us. Inflation expectations have steadied, and with government policy adding inflationary pressures, the outlook for 2025 is looking better for savers than it was at the start of 2024. Whilst mortgage rates have risen in recent weeks, rather disappointingly savings rates have remained relatively subdued.

In the past year, we have seen some big falls across the savings market, with the highest easy access rates falling by 0.37% and fixed terms falling the most by 1%. This has meant the highest rates on offer in the latter part of 2024 can all be found in variable rate accounts. This is due to the fact that fixed term savings product are priced based on future expectations of interest rates. In the last quarter of 2024 we have started to see this trend normalise, with fixed terms across the board now offering 4.5% or more, a trend we may see continue into 2025 if further interest rate cuts are taken off the table.

With the backdrop of a higher tax burden for the UK population, cash ISAs have become increasingly popular, being the fastest growing sector in the UK savings market. Assets in the HL Cash ISA have risen 230% since 1 January 2024 as clients take advantage of tax wrappers. Higher interest rates have meant more UK savers earn more than the personal savings allowance, which has increased the attractiveness of Cash ISAs.

Outlook and predictions for 2025

As we look into 2025, the outlook for the savings market is mixed, with a high degree of uncertainty. While financial markets are still pricing in approximately two rate cuts in 2025, the outlook in 2026 is one of relative stability in the base rate, with expectations for it to settle at 4%. Given that fixed rates are dependent on future expectations, I expect fixed rates to remain relatively stable in 2025, with variable rates and particularly easy access products continuing to come under pressure in the early half of 2025. If we see a further two cuts in 2025, it is likely that the easy access market settles around 4%. This would mean that the savings market returns to a sense of normality with fixed rates offering higher returns than easy access. Savers should look to lock in fixed rates, so they aren’t exposed to further falls in the easy access market, a strategy that has worked well so far in 2024.

The Cash ISA market will continue to grow in 2025. With the tax burden only increasing, more savers will look to take advantage of tax-free rates. Throughout 2024 the best Cash ISA rates have been found on savings platforms in easy access space, but looking into 2025, fixed terms may become increasingly attractive and we could see a shift into fixed term Cash ISAs from variable rate products. Across the HL Cash ISA platform, over 70% of instructions have been placed into variable rate products, a trend we expect to shift more towards fixed terms as we move into 2025.

There is likely to be an increase in competition in the savings market in 2025, as more new entrants come into the market and the regulator continues to pressure the large retail banks to ensure their clients are being paid fair value under the consumer duty.  To add to the regulatory pressure, banks and building societies still have billions of outstanding TFSME loans, which were offered during the pandemic and need to be re-financed next year, a technical factor which will mean a lot of the banks will have to refinance these loans by raising deposits.

For savers looking to maximise their interest and protect their case I would follow four simple rules.

• Emergency cash – hold three–six months’ worth of essential expenditure in an easy access account;
• Use fixed-term products for your savings to take advantage of competitive rates if you aren’t going to need quick access to the money;
• Look to savings and investment platforms to make switching between rates quick and easy and enable simple money management, and
• Use your Cash ISA allowance to take advantage of tax-free interest.

Joseph Hill, senior investment analyst, Hargreaves Lansdown

Think about reinvestment risk

Over the last few years, investments like money market funds have become increasingly popular with investors, offering yield for a low level of risk. However, as interest rates fall, as they are expected to in 2025, this exposes you to reinvestment risk – the risk of missing the upside because you’re out of the market.

Equities generally perform well when rates fall. So, waiting for rates to come down before switching from cash or cash proxies back to the stock market will likely mean you miss out on the rally. Remember, over the long term, it pays to be invested.

Tara Irwin, senior ESG analyst, Hargreaves Lansdown

Build resilience into your portfolio

If 2024 has taught us anything, it’s that the world is increasingly unpredictable. Remnants of Covid-19, escalating trade tensions, and extreme weather events have exposed the financial risks of disrupted supply chains, damaged infrastructure, and operational delays. These issues can erode company revenues and investor returns, so my resolution is to prioritise investments in companies that are future-proofing their operations – strengthening supply chains, safeguarding transport routes, and adapting operational hubs to withstand climate and geopolitical risks.

Derren Nathan, head of equity research, Hargreaves Lansdown

Listen to others but trust yourself

With around 55,000 listed equities globally across every conceivable sector it’s impossible to know everything about everything. So, it’s important to seek expert opinion if there are knowledge gaps to be filled. A pharmaceutical analyst may have great oversight of the biggest market opportunities yet to be addressed, but it may require scientific knowledge to judge which experimental drugs have the potential to become the leading blockbuster in that field.

It is sometimes hard to know who to trust. That’s where a broader view comes in handy. It also helps to add context to an investment case. For example, the strapline ‘most profitable coal mine in the world’ may sound appealing. But if coal is going out of fashion, then perhaps that’s not a pool to be fishing in. If after you’ve heard it a few times and you still have a nagging doubt, stick with your gut feel. If something sounds too good to be true, it doesn’t mean it’s not, but you’ll want some very strong evidence to be convinced otherwise.

Emma Wall, head of platform investments, Hargreaves Lansdown

Expect volatility to reign in 2025 and for equities and bonds to be jumpy over the next 12 months. Nothing new there, markets and yields have bounced about in 2024, sensitive to macroeconomic and political shocks. But, while it can be difficult to manage the emotional rollercoaster of a volatile investment market, it also creates opportunities for nimble investors. Heading into the new year, there are three investments we see as the most compelling. However, as always with investing, these should be part of a portfolio that is well diversified across regions and asset classes.

We’re bullish on bonds – although investors should manage their expectations on rate cuts. This is a higher for longer era. Both the Federal Reserve central bank in the US and the Bank of England in the UK have warned that cuts will be slow to come and cautiously applied. Inflation is after all not conquered yet, and a number of incoming US President Donald Trump’s policies are likely to be inflationary too.

But with the 10-year Gilt and US Treasury yields both still above 4%, bonds are still as attractive to us as they were earlier in 2024. Taking a long-term view, yields could fall to below 4% in future. By looking at bonds now, there is potential for capital gains in the future, as well as being rewarded with inflation-beating income in the near term, and the potential to diversify portfolios.

The 47th President of the United States’ impact on the US stock market could be positive for smaller companies. On the campaign trail, Trump mooted a blanket 20% tariff on all imports into the US. Trade tariffs favour domestic businesses over international conglomerates, and smaller companies are usually more domestically focused, although investing in them carries more risk.

Trump has also proposed cuts to cut corporate taxes, which is positive for companies’ earnings – and therefore could be beneficial to stock prices.

Infrastructure and renewables

While inflation and interest rates have proved headwinds for infrastructure, the macro-environment is – slowly – changing. Falling inflation and interest rate cuts historically have been good for the sector. Add to that significant investment promised in the UK Budget in October and the outlook is brighter than it has been in some time. Both infrastructure and renewable energy offer investors potential for income and growth and can add good diversification to a portfolio that already owns stocks and bonds.

Finally, a quick word on gold. While we don’t think it makes great gains this year, we do think it will hold its value and provide a useful diversifier in the face of both inflation and – sadly likely – continued geopolitical shocks.

Marat Nevretdinov, Managing Director, HDI Embedded

The front offices take the front seat

Experience over efficiencies: With a focus on the front office, insurance companies will prioritise customer-facing processes and digital engagement over back-office efficiencies. This will result in more investment in customer experience technologies, digital communication tools, and interactive customer service models.

Claims management as USP: As customer experience during the claim management process grows in importance, insurers will likely introduce more streamlined, automated claims processes tailored to evolving customer needs. This includes but is not limited to instant claim management. Seamless claims management with excellent user experience (UX) is increasingly essential, especially for younger customers like Gen Z. This focus could drive the adoption of AI for predictive claims handling and elevate the role of claims departments as pivotal to the customer relationship journey.

A collaborative model will overcome embedded insurance challenges

Commoditisation will force focus on collaboration to boost customer: In the competitive financial services sector, insurers are likely to prioritise enhancing customer experience to make their embedded insurance offerings stand out. Rather than running in search of new partnerships, insurers will likely expand collaboration within existing insurtech ecosystems to deliver seamless and integrated insurance experiences across the whole value chain. By leveraging the strengths of both established insurers and innovative insurtechs, this collaborative model will enable more effective embedded insurance solutions, resonating with customers across both digital and offline channels.

Insurers will need to build better digital brands

Creating awareness in the digital space: Transitioning to digital models will require insurers to establish stronger brand presence and product awareness digitally. This may result in the adoption of new strategies for engagement and retention, such as personalised content, gamification, and enhanced customer education efforts to foster informed purchasing decisions.

Moreover, insurers may experiment with techniques to “insure” customer focus, perhaps through opt-in digital touchpoints or reminders that periodically reinforce product knowledge. Expect insurance marketing to emphasise educational content and user-friendly interfaces to ensure that customers fully understand and can access their benefit

Transparency in embedded products

A growing focus on ethical practices means insurers will likely prioritise transparency, making insurance terms more accessible and understandable. This includes ensuring customers are fully aware of their insurance purchases, understand the benefits, and can easily use them when needed. Insurers may adopt clearer language, visual aids, and simplified digital tools to support informed decision-making and streamline claims processes.

Finally, the arrival of truly embedded insurance experiences

As the market matures, embedded insurance products will deliver seamless, end-to-end coverage that integrates smoothly into the customer journey. From onboarding to claims processing, embedded insurance aims to provide a unified experience that feels like a natural part of the broader purchase or engagement process, enhancing customer satisfaction and retention. This approach moves beyond traditional channels, offering customers a fluid and convenient way to access coverage within their everyday interactions.

Luke Alvarez, founder, Hiro Capital

My main prediction is the fusion of wearables with AI. We will see mass market usage of AI at scale in wearable devices – people asking verbal questions of their AI assistant and getting voice responses in real time, using devices like Meta Ray Bans, Apple’s Airpods, your Galaxy Watch etc. This is primitively available now in a few devices but it’s barely used today. By the end of 2025, it will be slick and ubiquitous. Ten years ago, it was weird to see people apparently talking to themselves as they walked along the street chatting via headset on their phones. In 2025, chatting to your AI as you navigate the world, using a device that understands you and can see what you’re looking at, asking for directions, deals, dating info about people around you, recipes for the grocery items you’re looking at etc. will become a normal and ubiquitous behaviour.

Seth Perlman, Global Head of Product, i2c Inc

Predictions for 2025 in the payments processing industry: Key trends and market dynamics

As we approach 2025, the payments processing industry is poised for significant transformation. As the Global Head of Product at i2c, I have the privilege of observing these changes firsthand. Here are my top predictions for the coming year, focusing on the trends and market dynamics that will shape the future of banking and payments.

Expansion of real-time payments

Real-time payments (RTP) are set to become the new standard in 2025, transforming how money moves globally. RTP systems enable instant transfer of funds between bank accounts, providing immediate availability of funds for recipients. This capability is crucial for both consumers and businesses, offering benefits such as improved cash flow management and enhanced customer satisfaction.

By 2025, RTP systems are expected to handle 27% of all electronic payments globally, with 575 billion RTP transactions projected. The expansion of RTP will drive the development of new use cases, such as real-time payroll, instant bill payments, and peer-to-peer transfers, further embedding RTP into everyday financial activities. Additionally, the interoperability of RTP systems across borders will enhance global commerce, making transactions faster and more efficient.

Evolution of core banking systems

The evolution of core banking systems is critical for financial institutions to remain competitive. In 2025, we expect to see a continued shift towards cloud-based core banking platforms, which offer greater scalability, flexibility, and cost-efficiency. According to a recent survey, 48% of U.S. consumers now prefer mobile banking apps, highlighting the need for robust and responsive core systems.

These modern systems enable banks to deliver personalised services, improve operational efficiency, and enhance customer experience. Additionally, the integration of artificial intelligence (AI) and machine learning (ML) will further optimise processes such as credit scoring, fraud detection, and customer support.

Trends in the credit industry

The credit industry is also undergoing significant changes. Following years of growth, credit card balances are expected to increase to $1.1 trillion by the end of 2025. However, the growth rate is slowing, with a projected year-over-year increase of 4.4%, compared to double-digit growth in previous years.

This moderation is partly due to the stabilisation of interest rates and the implementation of stricter lending criteria. Additionally, the rise of alternative credit scoring models, which leverage non-traditional data sources, will help expand access to credit for underserved populations.

Strengthening consumer protection and regulation

Consumer protection and regulatory compliance will remain a top priority in 2025. The Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) continue to enforce laws and combat unfair practices to ensure a fair and transparent financial system. New regulations will focus on enhancing data security, protecting consumer privacy, and ensuring fair lending practices.

For instance, the implementation of stronger data protection measures and the requirement for deposit insurance for mobile wallets will help safeguard consumer funds. These regulatory efforts aim to build consumer trust and confidence in the digital payments ecosystem.

Expansion of open banking

Open banking is set to transform the financial services landscape by promoting greater transparency and competition. By 2025, open banking initiatives will enable consumers to securely share their financial data with third-party providers, facilitating the development of innovative financial products and services.

This trend will drive the creation of more personalised and efficient banking experiences, as well as foster collaboration between traditional banks and fintech companies. The standardisation and interoperability of APIs will be crucial in ensuring the seamless integration of open banking solutions.

Conclusion

The banking and payments industry is on the cusp of transformative change in 2025. The expansion of real-time payments, evolution of core banking systems, trends in the credit industry, strengthened consumer protection, and the expansion of open banking are key trends that will shape the future of banking and payments. I am excited to witness and contribute to these developments, driving innovation and enhancing the banking and payment experiences for consumers and businesses alike.

Tom Brown, Managing Director, Real Estate, Ingenious

Five areas to watch in real estate in 2025

As we move toward 2025, the UK real estate market is navigating a complex and ever-evolving landscape. Investors must weigh evolving factors such as political uncertainties, shifts in rental demand, and the impact of economic pressures on borrowing costs. Here’s five areas to watch in real estate in 2025.

Political uncertainty and real estate risks

The political landscape continues to present risks for real estate in 2025. Key uncertainties include potential changes in global leadership, especially within major economies like the United States, and the ongoing repercussions of the UK’s post-Brexit relationship with the European Union. Challenges around trade deals, tariffs, and economic isolation remain a threat to market confidence and transaction volumes.

For property investors and developers, these uncertainties make long-term planning increasingly complex. In a volatile political climate, many may adopt a more cautious approach, focusing on adaptable strategies to mitigate risk and anticipate shifts in policy.

A stronger rental market

The rental market is expected to maintain strong momentum as homeownership remains difficult for many. The discontinuation of government schemes like Help to Buy, combined with high mortgage rates and inflation, have left first-time buyers struggling. Consequently, rental demand, particularly in urban areas, is set to grow, with residential rents seeing double-digit increases.

Traditional buy-to-let investors continue to feel the pinch from a changed tax framework, increased regulations and a tougher compliance environment, reducing rental supply. This can only further elevate rents by reducing supply and underscores a shift towards Build-to-Rent developments. These purpose-built projects are designed with long-term renters in mind, providing stable and attractive returns for investors.

Interest rates and borrowing challenges

Interest rates will remain a key driver for the real estate market in 2025. Although expectations are for gradual reductions, borrowing costs will stay elevated compared to pre-pandemic norms due to broader economic pressures, such as high global debt and inflation concerns. For homebuyers, developers, and the buy-to-sell market, this means persistent challenges in accessing affordable financing and moving forward with large-scale investments.

Inflation and construction challenges

The construction industry remains vulnerable to high inflation, despite anticipated base rate reductions. Rising costs for materials and labour have already strained smaller contractors, and a resurgence of inflation could see further financial stress. The introduction of a stricter regulatory environment under the Building Safety Act adds another layer of complexity and cost, potentially leading to delays in project timelines and further contractor difficulties.

The rise of co-living spaces

Co-living continues to gain traction in dense urban areas like London, appealing particularly to young professionals seeking flexible, community-driven living arrangements. These modern spaces provide not just accommodation, but a lifestyle—with shared amenities and communal environments fostering a sense of connection.

Investors are recognising the long-term growth potential of the Co-Living sector, which aligns with broader trends towards affordability and flexible living options. As housing costs remain high, Co-Living is poised to complement traditional rental models and become a key part of the housing market in 2025 and beyond.

Conclusion

The UK real estate market in 2025 is set to navigate a complex landscape shaped by political, economic, and regulatory factors. From political uncertainties and shifting rental dynamics to interest rate pressures and construction challenges, adaptability and strategic foresight will be key for investors. Emerging trends like Co-Living underline the sector’s evolution, offering flexible, community-driven solutions that resonate with changing market needs. As these dynamics unfold, the focus on resilience and innovation will define success in an increasingly demanding environment.

Chris Brown, President, Intelygenz

We are now entering the Early Majority phase of the AI adoption curve. In 2025, the banking and finance industry will lead the way in the United States as the primary sector to rapidly and effectively adopt AI. Highly-regulated industries, propelled by their need for compliance and operational efficiency, will drive adoption through Integrated AI Point Solutions—a critical stage where businesses gain tangible value by solving specific challenges with focused AI applications.

Over the next 2–3 years, this momentum will carry them further into the middle of the Early Majority phase. Following closely behind will be other highly regulated industries, such as insurance and energy, which are beginning to recognise the necessity of deeply embedded AI systems tailored to their operational needs.

Next year, we will see a surge in targeted AI projects and infrastructure investments within the banking/finance sector. Leaders in these industries are building their own versions of the AI agents that big tech companies are advertising today, embedding these solutions into their operations. These are the companies that began as early innovators or adopters on the curve. By 2025, they will prove their ROI because they have already advanced to the Integrated AI Point Solutions phase, scaling their implementations across departments and achieving transformative outcomes. Their bold moves and calculated risks will deliver significant rewards, cementing their positions as AI trailblazers.

A word of caution as we look to the new year: Businesses that fail to move decisively along the AI adoption curve risk falling behind. Those who remain stuck in the Experimentation phase will struggle to keep up with competitors who have already realised the advantages of Integrated AI Point Solutions. At Intelygenz, we have consistently guided enterprises through this journey, helping them transition from experimentation to scalable AI solutions that deliver measurable results. The message is clear—success lies not just in adopting AI but in adopting it strategically.

Andrew Bud, Founder and CEO, iProov

2025: The year deepfakes breaks the news?

Deepfakes will pose a significant threat to the integrity of news and media. A major broadcaster will admit that a recent interview featured a deepfake, which will spark widespread concern about the impact of AI-generated media on journalism and information integrity. Such will be the shockwaves that we will see calls for new content attribution technologies and stronger media literacy initiatives. The incident will serve as a stark reminder of the challenges faced in the age of deepfakes and the need to safeguard information integrity.

Biometric borders go global: Say goodbye to lines, hello to secure, seamless travel

The use of facial verification at border crossings will spread rapidly, speeding up passenger processing and enhancing security. Programs like Eurostar’s SmartCheck biometric system are already paving the way, allowing travellers to verify their identity with a simple glance or scan. Automated systems will optimise passenger flow, reduce congestion, and slash wait times while dramatically reducing the load on border officials. Privacy will be prioritised, with travellers opting in and data protected by decentralised identity technologies. This shift will usher in a new era of seamless and secure travel, making it easier for people to connect and explore the world with confidence.

The deepfake CEO: Identity verification becomes mission-critical for market trust

A deepfake of a Fortune 500 CEO will cause significant disruption in the financial markets. The fabricated video, announcing a false merger, will trigger a temporary market dip and erode investor confidence before being exposed. This incident will highlight the growing need for robust identity verification solutions to ensure the authenticity of information and maintain trust in an increasingly digital world.

Companies and investors will respond by prioritizing biometric authentication, investing in deepfake digital injection protection tools, enhancing communication protocols, and putting a strong focus on digital identity verification in all online interactions to prevent impersonation and fraud.

This incident will serve as a catalyst, accelerating the adoption of advanced identity verification solutions in the financial industry.

The great deepfake hiring heist: Organisations fall prey to a mass synthetic identity attack

Remember earlier this year when KnowBe4 fell victim to a remote deepfake hiring scam using a synthetic identity? In 2025, a far larger synthetic identity operation will infiltrate organisations worldwide. A state adversary will combine deepfakes with fabricated credentials to create entirely new, convincing employee personas, bypassing security to gain access, steal data, and cause operational chaos with significant financial losses. This sophisticated scheme will exploit remote onboarding processes, manipulate employees, and even infiltrate payroll systems to divert funds and disrupt livelihoods. This incident will cause organisations to change how they approach identity verification and cybersecurity in the age of increasingly sophisticated synthetic identities.

The EU identity wallet: Unanswered questions and looming challenges

As the EU Identity Wallet progresses to its planned roll-out in 2026, expect heated debates around its business model and liability framework. Who will shoulder the development, maintenance, and service provision costs – governments, private companies, or users themselves? Imagine a scenario where a compromised process leads to fraud on a mass scale – who will be held responsible and how will victims be compensated?

These questions are critical and must be addressed. Will wallet providers find ways to charge citizens, potentially excluding groups in the population? Will businesses face hefty fees for usage, stifling innovation? And if system failures disrupt essential services, who will bear the cost? The EU must strike a delicate balance: fostering a competitive market for wallet providers while ensuring accessibility, security, and a robust legal framework to address these complex issues. The answers will determine not only the wallet’s success but its impact on the digital economy and society as a whole.

Oversharing parents render security questions obsolete: ‘First pet’ no longer a secret

By the end of 2025, the ubiquitous practice of “sharenting” – parents excessively sharing their children’s information online – will render traditional knowledge-based authentication security questions like “What is the name of your first pet?” utterly useless. With parents readily divulging these personal details on social media, fraudsters will have a field day exploiting this readily available information to bypass security measures and compromise accounts.

While seemingly innocuous, these details can be exploited by malicious actors, jeopardising online security. This will force a shift towards more robust authentication methods, like facial biometrics with liveness combined with other forms of multi-factor authentication, to safeguard accounts from increasingly sophisticated social engineering attacks.

Big tech eclipses governments: Meta, Mercado Libre, and Globant become digital identity gatekeepers

Tech giants like Meta, Mercado Libre, and Globant will begin to wield more influence over digital identity than many governments. Their massive user bases and advanced technologies will position them as de facto identity authorities, controlling access to online services. This could enhance convenience and security but also erode government control and raise privacy concerns, highlighting the growing power of Big Tech in shaping the future of digital identity.

Governments race to Digital ID: 2025 – the year of the national identity app

Driven by security threats and the demand for seamless online services, 2025 will see a global surge in government-issued digital ID programmes. Countries will accelerate efforts to deploy national digital ID systems, putting secure digital identities in citizens’ hands. This shift, fuelled by the limitations of physical documents and the need for stronger cybersecurity, will pave the way for a more secure and inclusive digital future.

Data privacy takes centre stage: Selective disclosure drives verifiable credentials boom

The growing demand for data privacy and user control will fuel a surge in the adoption of decentralised identities. Empowered by the ability to selectively disclose only the necessary information, individuals will embrace this technology to seamlessly and securely prove their identity or attributes without revealing their entire personal profile. This rise in the use of decentralised digital credentials will empower individuals to confidently navigate the digital world while safeguarding their privacy. It will also create new opportunities for businesses and public bodies to build trust and offer personalized services without running the risk of compromising user data.

Deepfake fraud wave forces banks’ hand: Regulators mandate new biometric payment authentication

As deepfake technology becomes increasingly weaponised by hostile state actors and criminals in 2025, a wave of account takeovers and fraudulent transactions will force banking regulators worldwide to take decisive action. Led by pioneers like Thailand and Vietnam, countries will mandate the implementation of biometric verification for payment authentication, adding an extra layer of security to protect customers and financial institutions.

This move towards mandated biometric payment authentication will significantly enhance the security of digital transactions, making it more difficult for fraudsters to exploit stolen identities or manipulate systems. It will also accelerate the adoption of biometrics in the financial sector, paving the way for more secure and trustworthy digital banking experiences.

Mark Campbell, Head, Isio Wealth Planning

Clarity needed, AI rising, and a rethink on pensions

2025 is set to be a year of reflection and recalibration for the wealth planning industry. The government’s recent budget introduced significant changes, from the freezing of inheritance tax thresholds to higher capital gains tax rates and the inclusion of pensions in estates for IHT purposes from 2027. Next year will be key for unpacking the details of these changes, understanding how they will be administrated, and ensuring the industry is equipped to handle them effectively. Without this clarity, it’s difficult for clients to make fully informed decisions – practicalities need to be set out sooner rather than later.

For the sector, 2025 will likely be businesses as usual – the focus will be on getting the basics right. Clients need well-diversified portfolios, appropriate asset allocation, and enough liquidity to weather ongoing volatility. The challenge is preparing for these changes while staying calm and focused on the fundamentals – avoiding knee-jerk reactions that could undermine outcomes while ensuring long-term stability.

The inclusion of pensions in estates for IHT purposes from 2027 is already sparking discussions. For many clients, pensions are one of their most significant assets, so this shift is forcing a rethink about how they approach estate planning. For those caught out by the changes, especially those with limited time to act, it’s essential to have the right guidance and structures in place as soon as possible as we head into 2025.

At the same time, we expect to continue to see AI becoming increasingly integral to wealth planning next year, both in terms of improving business efficiency and offering investment opportunities. AI tools will continue to enhance processes, improve reporting, and support better client outcomes. The growth of AI will also continue to present significant long-term investment opportunities, the potential for growth in tech-related investments is clear.

For wealth managers, focusing on technology-driven solutions and integrating them into client portfolios can offer the opportunity to capture growth in an evolving market. While markets may not repeat themselves, they do rhyme – staying calm, sticking to the fundamentals, and maintaining a long-term view will be key to navigating 2025 successfully for the sector.

Aaron Holmes, CEO, Kani Payments

The reconciliation software market, set to grow from $1.72bn in 2023 to $6.49bn by 2032, highlights a profound shift towards accuracy and efficiency in finance. This growth isn’t just about technology adoption – it’s a response to the mounting complexity of financial operations.

The problem is particularly acute in the payments industry, where businesses today face challenges rooted in fragmented systems, manual workflows, and an overwhelming need to scale. Kani’s recent industry survey revealed that 56% of the UK payments industry still relies on spreadsheets to reconcile data – tools that, while familiar, are ill-suited for today’s demands. The result? An astonishing 700 hours are spent on data preparation annually, and 82% of businesses struggle to meet reporting deadlines. Such complexity hinders innovation, tying teams up in routine tasks rather than strategic growth.
The real opportunity of 2025 lies in rethinking reconciliation as more than a back-office necessity. The next wave of solutions will focus on end-to-end process modernisation, powered by AI and real-time data integration.

However, success will go beyond adopting new tools, requiring consolidation of fragmented workflows and a cultural shift toward viewing reconciliation as a strategic enabler. By aligning technology with business needs, companies can transform reconciliation from a challenge into an opportunity, ensuring they’re ready to thrive in the fast-evolving payments ecosystem.

Özge Doğan, Founder and CEO, Karman Beyond

The Great Wealth Transfer is well underway, with all forecasts expecting as much as $80trn to be transferred, globally, over the next 20-25 years. A new era of family leaders is set to shake up traditional ideologies, strategic approaches and ways of working across the wealth management industry.

Understanding the trends and nuances of the Next Generation will be critical in 2025 – yet most of the wealth sector are lagging in their efforts. As the Next Generation’s holdings of assets and capital crystallise – wealth management strategies will need to align with new clients’ needs and their increasing influence. Next Generation investment philosophies are different. There is greater interest in impact, incorporating ESG principles, and exploring alternative investment opportunities in the likes of private equity and real estate.

Any wealth management entity only just starting to adapt to working with Next Gens is too late. Next Gens already influence decisions as the family business landscape changes rapidly, especially in Türkiye.

Next Gens’ trust needs to be earned, but yesterday’s methods are not the way to do it. The Next Generation wants to work with advisors keeping pace with change and aligned with new trends – which is sparking a further shift to Family Offices. With Family Office numbers proliferating globally, this transition is well underway and will intensify in 2025. Emerging family leaders are seeking holistic service providers with their best, long-term interests at heart.

For families managing their wealth, a clear division of roles between asset managers and Family Offices is needed. Private banks excel in asset management – while Family Offices specialise in understanding and managing family dynamics – and they should remain focused on this core function. Adoption of this model will give Next Gens the best opportunity to manage and discover their wealth’s real potential and their exciting future ahead.

Nick Hudson, Product Marketing Manager, Keysight

Retail technology outlook

Against a backdrop of a cost-of-living crisis, tight household budgets and increasing taxes, consumers are thriftier than ever and are searching for the best deals. Discounters are no longer niche; they’re a mainstream part of the retail landscape, selling high volumes of goods at ‘discount’ prices. This creates a crowded landscape and means that every retailer must keep costs in check to maintain market share and already wafer-thin margins. Technology and, in particular, data will play an increasingly significant role in this, as it has for several years.  Some predictions on how this might evolve in 2025 include:

Doubling down on AI 

Retailers will increasingly adopt highly trained models to predict consumer behavior and to optimise price and inventory to drive sales.

First-party data in the spotlight

In 2025, retailers will hone in on first-party data to build stronger digital engagement and drive sales. E-commerce loyalty platforms will be integrated into store-based shopping to improve the overarching experience to cement brand loyalty. This will increase customer journey visibility and help create richer datasets for retailers to leverage.  To achieve this point of sale and e-commerce offerings will be integrated into sales execution technology to deliver a unified experience for each shopper. All of the technology will need extensive testing to ensure the customer experience delights.

Driving supply chain efficiency remains a priority

Retailers have been desperately trying to simplify their supply chains with ‘AI’ driven technology, but without necessarily achieving the desired effect – improving cash flow, lower waste, and enhanced reliability.  With margins razor thin, more time and effort will be invested to improve the technology and drive better results.

Back-office optimisation

The use of low-code / no-code technologies will increase to improve retailer’s back-office systems. These will be built on out-of-the-box AI tools, such as co-pilot, to further optimise shared services and contact centers.

Retail media networks finally embrace digitisation

Retail media networks are still predominantly analog, which takes resources to put up and take down in stores. In addition, they are less dynamic, remaining static for a period of time. In 2025, there will be a shift to embrace digitisation in the quest to automate and drive down costs while increasing flexibility.

Tim Bennett, Head of Education, Killik & Co

Looking ahead to 2025, there are reasons to be quietly confident that inflation may stay tamed. That is certainly what the Bank of England is relying on if it is to cut rates again next year.

Firstly, supply chains have been stabilising across much of the world following the huge disruption caused by the pandemic and associated lock downs. Next, economies are now adapting to the devastating consequences of the wars in Ukraine and the Middle East. Thirdly, consumers are under pressure here in particular and are naturally reigning in spending as a result.

That all said, there are forces at work that could upset such a rosy view of the world.
Although it is not yet clear how widely the rumoured US tariffs may be imposed by Donald Trump, the risk of an escalating trade war with China, should Beijing respond in kind, is real and would be inflationary.

Meanwhile, tax rises in the UK are coming in all the time, with a substantial change to the employer’s national insurance rate due in April 2025. Many businesses might try to pass this onto customers by raising prices.

Then there is government borrowing and spending plans, which could prove inflationary once they kick in.

Eitan Katz, CEO, Kima Finance

The financial services landscape in 2025 is poised for significant shifts as decentralised finance (DeFi) and traditional finance (TradFi) continue to converge.
The increasing adoption of blockchain technology and tokenisation is reshaping how private banking markets operate. Tokenised assets—ranging from equities to real estate—are emerging as a transformative force, offering enhanced liquidity and transparency while lowering barriers to entry for private banking clients. This trend could accelerate as banks seek new ways to engage younger, tech-savvy high-net-worth individuals (HNWIs) demanding greater control and innovation in wealth management.

However, challenges remain. While regulatory clarity around digital assets is improving, the implementation of global frameworks is far from seamless. Private banks face the dual task of integrating cutting-edge technology while maintaining robust compliance in an evolving regulatory environment. Those that succeed will likely set themselves apart as leaders in the new financial paradigm.

Another crucial factor is interoperability. As blockchain networks proliferate, the ability to connect decentralised ecosystems with centralised platforms is becoming a cornerstone of innovation. For private banks, leveraging interoperable protocols could unlock unprecedented efficiencies, enabling them to streamline cross-border payments, facilitate real-world asset transactions, and offer diversified portfolios that span both fiat and crypto assets.

Sustainability will also play a key role in shaping private banking trends. ESG considerations are no longer optional for HNWIs, particularly among younger generations. Offering blockchain-based solutions that align with these values will position private banks as forward-thinking and responsive to their clients’ evolving priorities.

The road ahead for private banking is one of both challenge and opportunity. By embracing decentralised technologies and prioritising interoperability, private banks can position themselves at the forefront of financial innovation in 2025 and beyond. At Kima, we see this convergence as a defining moment—one that offers the chance to unify the financial ecosystem for a more efficient and inclusive future.

Raj Koneru, founder, Kore.ai

By 2025, we’ll see enterprises fully embracing retrieval-augmented generation (RAG) to make information finding faster, smarter, and more relevant. Forget traditional search — GenAI-powered tools will take over, pulling together precise answers from scattered data. Whether it’s an employee needing a specific HR policy or a sales leader identifying high-priority deals, RAG-enabled search will deliver and ensure immediate, actionable results. GenAI will also be a game-changer for decision-making. Leaders will lean on it to sift through complex reports, summarise key points, and uncover actionable insights. It’ll save countless hours of manual work and help teams make sharper, faster decisions.

Karim Haji, Global and UK head of financial services, KPMG

Financial services is the backbone of the UK economy, so it’s encouraging to see leaders go into the new year with optimism about the government’s growth plans for the sector. However, there are still concerns related to the impact of the Budget on growth in financial services. In the first half of 2025, the sector will want to see more details on the government’s competitiveness strategy to really understand how the Chancellor is proposing to work with them on strengthening the UK’s attractiveness as a global financial centre.

2024 has been a challenging year with financial services firms facing the headwinds of higher interest rates, inflation and geopolitical uncertainty. However, the sector goes into the new year with optimism about growth and profitability, coupled with strong intentions around hiring. Leaders are making a clear play for data and artificial intelligence skills from talent both within and outside of the sector as they look to bolster their business models. It’s encouraging to see leaders focusing hiring plans on junior levels, including apprentices, in 2025.

Lorenzo Pellegrino, CEO, Kuady

Digital wallets and super-apps

As we look ahead to 2025, super-apps are set to play a major role in reshaping digital payments. We’ve seen an increasing demand for digital wallets to be transformed into super-apps with a more integrated range of services to make managing payments smoother and more convenient than ever. However, with this growth, we anticipate increased scrutiny from regulators, particularly around financial stability and data privacy – challenges the entire industry will need to address.

There’s a clear divide in the global super-app landscape. Across Europe, consumers tend to prefer specialised apps for different needs, while in Asia, super-apps have already expanded into multiservice platforms, meeting everyday requirements in one place. This divergence presents an opportunity, and we see potential to bridge this gap by offering an all-in-one solution that simplifies life for our users.

AI-driven fraud prevention

Fraud and cybercrime are rising alongside the growth of digital payments. In 2025, AI will play a key role in combating these threats. However, it’s a double-edged sword—fraudsters are also using AI to carry out more sophisticated attacks, such as deepfake identity fraud, which we’ve seen more and more of in 2024. These technologies are being used to impersonate individuals during authentication processes, adding a new layer of complexity.

To counter this, 2025 will bring a wave of AI-powered tools for real-time risk management, fraud detection, and identity verification. These innovations will strengthen security for businesses and consumers while providing more personalised and efficient payment experiences. Regulations like the EU AI Act will add another dimension, presenting compliance challenges. Staying ahead of AI-focused regulatory changes and investing in adaptable compliance tools will be essential for payment companies.

Cross-border payments

Cross-border payments are set for a major transformation in 2025. Both regulators and consumers are demanding faster, cheaper, and more seamless international transactions. We expect blockchain technology and digital currencies to play a bigger role in meeting these demands, reducing costs and simplifying the process. This shift promises significant benefits for businesses and consumers alike.

We’ve anticipated this shift by offering fee-free cross-border transactions and multi-currency accounts, allowing users to store funds in USD and other currencies to avoid volatility. Our platform empowers consumers worldwide to engage in global commerce effortlessly, providing seamless access to products and services across borders.

Andrew Seiz, SVP of Finance, Kueski

Payments technology will remain essential in shaping the financial services space, driving wider investment interest. It will also enhance the financial lives of consumers, especially in emerging markets like Mexico where a large portion of the population remains unbanked and without access to traditional credit products. Moreover, in 2025, investments in mobile wallets and digital payment platforms will continue to expand financial inclusion, particularly in markets where the traditional banking infrastructure is lacking. Laser focus on payment innovations will lead to more seamless customer experiences, preventing fraud and driving financial inclusion. Companies that can make the payment and credit experience more seamless and user-friendly are likely to be particularly appealing to potential investors.

Krishna Venkatraman, Chief Data Officer, Kueski

It’s clear that the initial AI hype cycle is winding down. However, the excitement and momentum around AI in financial services and fintech will continue in 2025. Next year, AI will continue to drive financial inclusion further, streamline underwriting and lending processes quicker, and personalise offerings better. Fintechs at the forefront of AI will continue to innovate and reimagine how cutting-edge AI technology can be used to transform the financial sector. Emerging markets, including Mexico, with high growth potential and a still large untapped consumer market, have the most to benefit from these transformative initiatives and will see continued growth throughout 2025 and beyond.

Nima Montazeri, Chief Product Officer, Liberis

Over the next 12 months, I expect the regulatory landscape to be very different in the EU and across the US. With Donald Trump coming to power and Elon Musk starting the Department of Government Efficiency, I anticipate less regulation for fintech in the US. They are likely to push hard on deregulation, and unfortunately, I think it will be the exact opposite in Europe.

EU-more regulation spells bad news for fintechs and consumers

In the EU, I foresee more regulation, which will favour incumbents who can afford more lawyers and spend more money to meet regulatory requirements. Unfortunately, fintechs will likely be victims of this increased regulation in the EU.

I also believe that more regulation in the EU would be bad for consumers. For example, citizens of the European Union spend 60,000,000 hours clicking on cookie banners, which add little value. Additionally, EU citizens have to pay the same price for the latest Apple iPhone as those in the UK or US, but they don’t get many of the new features due to regulation. Apple intelligence, for instance, is not enabled in the EU simply because of regulatory constraints. As a result, EU citizens are paying the same price but receiving a worse product.

The superpowers of GenAI

A lot of technologies are coming together to deliver an embedded finance experience to our end users. The one that is top of mind at the moment is, of course, GenAI. GenAI algorithms give us superpowers that we didn’t have before. We can look at pages and pages of bank statements and, within seconds, recognise revenue, understand, and extract very valuable information from that data. We can do this for a whole sweep of documents that it was not possible to easily do before.

Also, GenAI allows us to tap into and access unstructured data, which was quite hard for machines to understand before. So, whether it is looking at reviews for a business or social posts about the business, we can analyse a vast amount of data, understand the sentiment, and use that as input into our decision-making algorithms.

We expect more and more users to use their banking services through their platform of choice. For example, if you are a restaurant selling on Uber Eats, your banking will move from your traditional high street bank to Uber Eats. Similarly, if you are a stationery shop selling on Etsy, your banking services will be delivered through Etsy. This is a trend we have been observing over the last few years, and we expect the rate of bundling banking services on these platforms to accelerate exponentially.

Fintechs to extend their lead in customer experience

It all depends on the speed of execution and innovation. Traditional financial institutions are much better positioned to leverage new advances in AI because they have access to larger pools of data and more data points. Therefore, they should be able to build better algorithms. However, traditionally, they have not been very fast at executing new initiatives. As a result, I expect fintechs to increase their lead in customer experience with financial institutions, simply because they will build better algorithms using the fewer data points, they have access to. One way forward for traditional financial institutions is to partner with fintechs and find ways to leverage their data and technology to build better customer experiences.

Personalisation in financial services has always been a topic that seemed just two years away, always around the corner, yet never fully achieved. However, with recent advances in Generative AI and large language models, we are finally at a point where we can analyse large amounts of data, mostly unstructured text, and improve the journeys and offers we present to customers. So, I’m hopeful. It’s no longer two years away; I think it’s just 6 to 12 months away.

Here at Liberis, we’ve been using AI for credit scoring and automatic decisioning for many years. We are one of the pioneers in using machine learning and artificial intelligence in this area. However, we are now using large language models and generative AI to enhance our models. Previously, we only used structured data as input for our credit decisioning models. With the advent of large language models, we can now analyse unstructured data, such as text documents and reviews, understand the sentiment, identify key points, and feed this information into the algorithm. As a result, our algorithms are much more personalised and can process larger amounts of data than before. We expect this to have a very positive impact on our customers.

Using Generative AI and large language models, we can analyse a much larger volume of customer feedback, reviews, and calls between customers and customer service agents. We can process this data at a rate that was simply impossible before. As a result, we expect to see a significant improvement in the service we provide.

‘A rising tide to raise all boats’

I think AI will have both direct and indirect impacts on customer experiences. The direct impact will be the use of generative AI and large language models to understand structured data and create personalised experiences in financial services. For me, the indirect impact is more interesting. Big technology companies, like Amazon, Uber, and Facebook, will also use AI to improve their experiences. As a result, consumer expectations will increase. Consumers will expect the same amazing experiences from their high street bank, their finance provider, and their platform of choice as they get from these big tech companies. As they say, a rising tide will raise all boats.

Jamil Jiva, Global Head of Asset Management, Linedata

As we leave 2024 behind, the financial industry is poised for a profound technological transformation, with artificial intelligence set to transform industry practices. From risk management and regulatory compliance to predictive analytics and cybersecurity, AI promises to bring a new era of transparency, efficiency and innovation to the finance ecosystem. Artificial intelligence looks set to become more explainable (XAI), and RegTech and advanced predictive analytics will no longer be mere buzzwords, but the pillars of a more ethical, secure and successful finance:

Explainable AI: towards more transparent and ethical finance

The widespread adoption of Explainable Artificial Intelligence (XAI) in risk assessment and management systems marks a decisive turning point. This technology is finally lifting the veil on the “black box” of algorithms behind AI inference systems, offering a clear understanding of AI decision-making processes. This creates an opportunity for financial institutions to renew and reinforce the confidence of customers and regulators while improving the accuracy of their risk models.

RegTech: automation at the service of compliance

The development of “RegTech” solutions based on machine learning promises to revolutionize regulatory compliance. These tools will enable financial institutions to automate compliance with constantly evolving standards in real-time. The industry is increasingly seeking to replace tedious audits and after-the-fact compliance with continuous, frictionless adaptation to regulatory requirements.

Predictive analytics: anticipate for better investment

Predictive analytics platforms using AI to anticipate market trends and investor behaviors are emerging as indispensable tools. These technologies give asset managers and traders a head start, enabling them to make informed decisions in an increasingly complex and volatile market environment.

Autonomous cybersecurity: intelligent protection against threats

In the face of increasingly sophisticated cyber-attacks, AI-based autonomous cybersecurity solutions are becoming a must. These systems, capable of detecting and neutralizing threats in real time, offer dynamic, scalable protection for financial IT infrastructure. The era of reactive cybersecurity is coming to an end, giving way to a proactive, intelligent approach.

The unstructured data revolution

The widespread emergence of RAG (Retrieval-Augmented Generation) systems for managing unstructured data is opening up new horizons. These technologies make it possible to tap into a wealth of previously unexploited information, giving financial institutions a deeper understanding of their environment and their customers.

Operational efficiency: the silent engine of transformation

Although less visible, improving operational efficiency through AI is shaping up to be a major transformative trend. Automating processes, optimising resources and reducing operational costs will enable financial institutions to become more agile and competitive.

Dr. Sandeep Dadia, CEO & Country Head, Lockton

One of the key developments this year has been the enhanced focus on personalised insurance solutions. Leveraging AI-driven data analytics, insurers are now better equipped to understand customer needs, analyse behaviour patterns, and deliver tailored offerings. This shift toward personalisation has improved customer engagement and enabled the creation of cost-effective, risk-specific products for individuals and businesses alike.

As organisations become more attuned to optimising their risk management strategies, the concept of Total Cost of Risk (TCOR) is gaining prominence over the traditional focus on Total Cost of Premium. Businesses are increasingly evaluating the broader financial implications of their insurance and risk management decisions, including uninsured losses, administrative costs, and indirect risks. This strategic shift encourages businesses to adopt holistic risk solutions that minimise their overall cost of risk, rather than merely reducing premiums.

With the increase in data breaches and cyber incidents, cyber risks have become a major area of concern for businesses across industries. The past year has underscored the importance of adopting cyber insurance policies as a critical risk management tool. At Lockton, we anticipate a significant uptick in demand for comprehensive cyber insurance solutions, covering financial losses, reputational damage, and regulatory liabilities. Going forward, businesses must proactively assess their vulnerabilities, invest in robust cyber protection strategies, and consider insurance as a non-negotiable safeguard.

Looking ahead to 2025, we see the insurance landscape evolving to address niche yet high-potential opportunities. Specialised offerings such as space insurance (for satellite launches and aerospace ventures), Protection & Indemnity (P&I) insurance (for maritime risks), and risk solutions for emerging industries are expected to gain traction. In 2025, our focus remains on driving innovation, delivering unmatched client value, and addressing new-age risks with agility.

By blending technology with expertise, we aim to support businesses in navigating an increasingly complex risk environment. We are excited about the opportunities ahead and remain steadfast in our commitment to making insurance accessible, efficient, and future-ready.

Tom Eyre, co-CEO and co-founder, Loqbox

In 2025, we can expect banks, digital challengers and payment providers to focus more of their efforts on serving younger demographics with highly personalised tools to help them achieve their financial and lifestyle goals, build their credit records, and form good savings habits.

Gregor Mowat, co-CEO and co-founder, Loqbox

For those just embarking on adulthood, or those moving to the UK, not having a credit history can be a major barrier when trying to access financial products like a mortgage, even if they’ve been financially responsible elsewhere. It’s estimated that around five million people are “credit invisibles”, affecting newcomers to the UK and people who have lived here for years without ever building a traditional credit profile. This leaves them trapped in a cycle where they’re paying rent, often more than they would on a mortgage, but unable to access one due to a lack of visible credit history. It also prevents them from accessing loans or other financial products that could help them improve their financial situation.

Without better pathways to build credit – such as factoring rental payments into credit assessments – these individuals remain stuck, unable to break free from the limitations imposed by their lack of credit history. In 2025, we hope to see more inclusive and creative solutions that open up financial opportunities for everyone, not just a select few.

Bilal Hafeez, CEO, Macro Hive

Grey swans for 2025: From AI monetary policy, US-China peace, UK elections

Improbable but possible events for the year ahead. Last year, I said that Biden would drop out of the Presidential race, which turned out correct!

Central banks become independent (of humans)

Central banks are increasingly using AI to inform policy decisions, but should they go further and delegate the entire process? After years of inflation shocks and reactive rate hikes, it may be time to let machines handle the complexities of monetary policy.

Dollar loses its dominant reserve status

The US dollar has dominated global trade and central bank reserves since WWII. But with shifting geopolitics, declining trust in US-led systems, and Donald Trump’s return to the global stage, is dollar dominance on the brink of collapse?

Back to zero interest rates policy

Until recently, central banks were addicted to low interest rates. They boost asset prices, make funding the government easier and keep the public happy. So why are economists only expecting modest cuts in 2025

The US gets a fiscal surplus

The US faces a spiralling deficit, but could Elon Musk’s plans to curb spending and raise revenue rebalance the ship of state?

The UK goes back to the polls

Almost 3mn people have signed a petition calling for a fresh general election. Only Kier Starmer holds the power to call one, but is there anything that could force his hand?

US-China trade war ends

Elon Musk and Vivek Ramaswamy’s elite task force aimed to revolutionise US government spending. But as optimism faded behind closed-door meetings, DOGE came up with its boldest proposal yet – ending the trade war with China.

PBoC and NDRC jointly declare 3% inflation target

As China faces economic gloom and mixed market sentiment, could a bold inflation target turn things around? Drawing lessons from Japan’s Abenomics, economists are calling on the PBoC to shift focus inward and reignite growth. Is 2025 the year of this transformation?

The US expels 11 million illegal migrants

The Trump administration’s ambitious 2025 deportation programme achieves its goal of expelling 11 million undocumented migrants. But the economy is left reeling from supply shortages, inflation, and political fallout.

European joint issuance

With geopolitical pressures mounting and integration at a crossroads, could Germany step up as saviour of the Eurozone? A historic shift could see them embrace joint debt issuance to strengthen the bloc.

Next year will be out of this world

Speculation around UFOs is soaring, with possible revelations from governments, including the Trump administration, on the horizon. What might we learn, and how could it reshape our understanding of technology, geopolitics, and markets?

The great decorrelation

In 2025, the US revels in an inflationary boom, while the rest of the world suffers a deflationary bust. Geopolitical tensions and fractured supply chains create a stark economic divide, leaving global markets uncertain and highly volatile.

Best of frenemies? Powell makes a pal at the White House

On 24 December 2025, Treasury Secretary Bessent gives Fed Chair Powell a surprising gift: Jerry Garcia’s Gibson guitar. But what on earth could have prompted such a friendship?

Man City to finish eighth and miss out on Europe entirely

With injuries to key players, poor form, and rising competition, Manchester City’s path to recovery looks increasingly uncertain. Is an eighth-place Premier League finish on the cards?

Perminder Grewal, Director of Solutions Engineering, Mambu

Alternative lending is reshaping the finance sector. Economic turbulence and the rise of fintechs have intensified demand beyond traditional lending models, increasing competition. [In 2025,] Business leaders must offer services that attract borrowers, making a robust core banking platform essential.

Alexis Valdez Gonzalez, Manager, Risk & Compliance, Mambu

Technological change [in] this decade is unprecedented, posing significant regulatory challenges. As AI-driven financial advice and Embedded Finance become global, concerns about risk and regulation grow. Financial institutions must adopt robust governance to protect customers. To prioritise compliance in 2025 and beyond, they must also leverage platforms aligned with compliance goals.

Maciej Pitucha, VP of Product & Data, Mangopay

In 2025, fraud tactics will continue to evolve, presenting new challenges for payment service providers (PSPs) and retailers. The rise in APP fraud has led to additional regulation in the UK, and I predict that other regions will follow. However, these reimbursements will likely cause a dramatic increase in first-party fraud (friendly fraud), which will demand more sophisticated fraud prevention strategies. Technologies like AI, dark web insights, and device fingerprinting will become integral in detecting and preventing fraud, particularly during high-traffic purchasing periods. A multi-layered approach to fraud prevention will become essential to safeguard against increasingly complex schemes. 

Consumer awareness will also become a key component in the fight against fraud. As social engineering scams like phishing proliferate, businesses will prioritise educating consumers on how to protect themselves, such as by verifying URLs and avoiding suspicious offers. Collaboration between the private sector, regulators, and consumers will be critical in fostering trust and ensuring a safer digital environment for all parties involved. 

Meanwhile, AI will continue to support enhancing a range of services, from fraud detection to personalised financial products, but its widespread use will also prompt regulators to catch up. As AI becomes a central part of financial services, new regulatory frameworks will emerge to address concerns like privacy, algorithmic bias, and accountability, shaping the future of both fintech and AI technology.

Juan Bernal, Chief Investment Officer, MAPFRE

First, political developments (in particular economic policies) remain pivotal, with the US government’s new policies expected to reshape global trade, capital flows, and potentially bolster domestic growth. Economic policy challenges are particularly tough in France too, but also Germany and China are adding to market concerns. Globally, fiscal and trade decisions will play a decisive role in shaping the economic outlook, in a still unknown manner.

Secondly, inflation could regain prominence over growth as a key investor focus. Recent US data on prices, fiscal deficits, and liquidity suggest a potential inflationary wave. Such a scenario would significantly alter expectations for interest rates, the USD, and asset classes across the board. In any case, CPIs will remain volatile based on energy prices developments.

Lastly, liquidity remains a critical but underappreciated driver of asset prices. Despite central banks pausing balance sheet expansion and a strong USD signaling tighter conditions, markets are counteracting with heightened optimism, creating a net liquidity boost. While this supports asset prices in the short term, it risks fueling inflation and, more worryingly, leaves markets vulnerable to a sharp liquidity reversal if sentiment shifts.

While risks dominate the outlook, not everything is negative. Potential positives include an end to the Ukraine conflict or stronger-than-anticipated European growth.

Alan Carlisle, Chief Compliance Officer, Marqeta

Proactive compliance strategies will lay the foundation for fintech in 2025

With banking and fintech partnerships under increasing regulatory scrutiny, the stakes around compliance have never been higher. In this environment, fintechs can no longer afford a reactive approach to compliance. Instead, they should adopt proactive compliance strategies that go beyond simply seeking to avoid fines and that are embedded into the everyday makeup of their culture and product strategies, helping to build trust, ensure stability, and foster sustainable growth. 

At Marqeta, we’re committed to embedding compliance into our company’s culture, helping to mitigate risks and create a foundation for long-term success for us and our customers. Proactive compliance strategies allow organisations to leverage advanced tools and position themselves to adapt to shifting regulatory demands while showcasing a genuine commitment to transparency. 

Marcin Glogowski, SVP Managing Director for Europe and UK CEO, Marqeta

In 2025 payments will turn fully personal, with tailored credit, rewards, and BNPL at scale

In my opinion, a major global payment trend of 2024 has been hyper-personalisation, with a new generation of customers driving a shift toward personalisation at scale, expecting their financial services to be unique and tailored to individual needs. Modern consumers want a future where financial services integrate seamlessly into their digital lives and keep pace with their evolving needs. 

As a result, we are seeing trends, such as personalised credit offerings and rewards booming. In an industry with increasingly low consumer loyalty, brands and financial institutions must go beyond traditional interactions. For example, the recent Marqeta State of Credit report found that of UK consumers who use more than one credit card, 43% confirmed that they would use a credit card more frequently if better rewards were offered. By moving to a dynamic, rather than set rewards structure, consumers can earn benefits tailored to their spending habits and preferences in real time. 

Increasingly with innovations like Buy Now Pay Later (BNPL), consumers are guided to credit options specifically suited to them and their needs. In 2025, I expect we will increasingly see personalised BNPL payment plan options being offered in real time, often within existing payment apps and products we already use daily. We are also seeing B2B payments emerging as a strong trend. Ensuring gig workers, sellers and partners get paid efficiently while offering robust expense management and financing. I anticipate we’ll see more demand for innovative B2B payment solutions that enable seamless money management across 2025.

Nicholas Holt, Head of Solutions and Delivery, Europe, Marqeta

2025 will be a year of rapid innovation in financial services  

In today’s digital-first world, traditional payment infrastructure is no longer enough to keep up with the demands of consumers. The front door of a bank is now an app, digital wallet usage is increasing, and new, flexible services have a growing prevalence on the market.  In 2025 and beyond, customers will continue to drive a shift toward modern services which keep up with the rate of digital and mobile innovation.

The ramifications of changing consumer trends could lead to the traditional roles of banks, such as ATMs and as physical branches, disappearing. To ensure continued customer loyalty, all financial service providers will be forced to innovate and offer consumers the embedded, seamless and instantaneous services that they desire. 

Consequently, across 2025, we are likely to see new technology and solutions being offered to reduce unnecessary friction for consumers trying to pay and get paid. We are already seeing increased demand for Accelerated Wage Access (AWA), with a Marqeta study showing that 74% of gig workers ages 18-34 would be interested in an employer who offered an option to get paid immediately. As businesses and workers grow tired of cash flow restrictions and having to wait for monthly pay slips in an otherwise instant, digital world. As new services evolve, competition in fintech will be enhanced and the financial industry will be forced to grow and evolve.

Paul Ellis, UK MD, Medius

Avoidable internal fraud will continue unless companies review internal attitudes to whistleblowers 

In 2025, internal fraud will remain a critical threat unless companies take proactive steps to empower whistleblowers. Despite 56% of financial professionals in the US and UK having identified or suspected fraud within their organisations, 81% have chosen to stay silent due to the fear of retaliation or lack of support.

If organisations want to combat this in 2025, they will need to overhaul their internal policies, fostering a culture that values and protects whistleblowers. Not only that, but organisations will also need to add technology-driven solutions to their arsenal. These solutions are emerging as pivotal tools for enhancing transparency and fraud prevention, offering improved visibility into cash flow and invoice processing while providing whistleblowers with robust evidence to support their claims.

Immad Akhund, CEO, Mercury

Major VC trends

VC fundraising will be more selective but grow for the first time since 2022

The venture capital climate will remain cautious in 2025, with investors being more selective and scrutinising valuations closely (except for rare hot AI companies). Seed stage funding will stay strong, but Series A and B rounds will continue to be trickier, especially for companies without product-market fit or operational efficiency.

Despite inflation concerns and economic uncertainty, VC fundraising will stay resilient for startups that show clear growth potential and strong unit economics.

The AI hype cycle may stabilise, but AI investments will soar as companies move beyond experimentation and start implementing AI for real-world use cases, especially in areas like customer service, sales, and finance. Companies will use AI to boost productivity — especially in back-office tasks and document management — helping small teams scale quickly and operate more efficiently.

The tailwinds behind deep tech (physical tech, defence, robotics) will drive huge growth in 2025

There’s a confluence of trends at play: dedicated funds and dry powder to invest in these huge markets, and the government’s willingness to buy from startups with procurement models designed for non-legacy government contractors. Companies like SpaceX and Anduril are leading this charge and there will be more startups entering the field.

Fintech will see a resurgence after IPOs from companies like Stripe, Klarna, Chime, and Plaid. VC funding in fintechs cooled after the bubble of 2021, but once these big players go public, we’ll see renewed investment in the space for companies that learned the lessons from the last bubble – i.e. smart growth and strong unit economics.

Regulation will support greater innovation

In 2025, a regulatory shift is expected to benefit both the fintech and tech industries. The new administration plans to prioritise efficiency and remove growth barriers. If more simplified guardrails are implemented, this could create more opportunities for entrepreneurs, particularly in fintech and crypto, to innovate responsibly. While sectors like healthcare and defense may continue to face challenges, the regulatory landscape seems to be trending toward enabling innovation.

The US economy will keep growing in 2025, but inflation remains a concern

The economy will stay relatively strong in 2025, with inflation easing and interest rates potentially falling. While inflation will likely be lower than in recent years, it won’t disappear, and labor inflation, driven by immigration policies, will still be a challenge. This will create a more balanced environment, supporting both big companies and emerging startups, but with cautious optimism.

Labour markets will evolve, but AI and automation won’t lead to widespread job loss

Instead, we’ll see efficiency gains in industries that automate repetitive tasks, but humans will still be needed for complex decision-making and creative work. 2025 is the year we really see many using AI as a core part of their job and enabling more productivity.

Expect big tech growth — but not through AGI

I’m not sold on the idea that artificial general intelligence (AGI) is imminent. Yes, AI will make significant strides in specific applications, but we’re far from superhuman intelligence. AGI won’t be a game-changer for startups or investors in the next year, and the myth of AI replacing all jobs or creating billion-dollar companies with only one employee won’t come true. The focus will stay on AI’s practical uses for automation, with humans still playing a key role in driving innovation.

Jason Gaywood, Head of Corporate Solutions, MillTechFX

Rising hedging costs

Since the beginning of this year, market volatility has noticeably increased. This uptick in uncertainty has been driven by a complex interplay of global economic challenges, fluctuating monetary policies, and significant geopolitical events, which has led corporates to implement hedging to effectively mitigate the risks posed by volatility.

Inflation has remained relatively high off the back of these events, leading the cost of doing business to continue rising this year –including hedging. In fact, 70% of UK corporates and 73% of North American corporates reported an increase in the cost of FX hedging over the last year, demonstrating that this is an issue being felt worldwide.

Due to rising costs squeezing budgets across the board, many corporates now deem hedging too expensive, leaving themselves exposed to currency risk. With these macroeconomic challenges set to persist into 2025, it is vital that firms look to onboard new technologies and FX partners to navigate this landscape and ensure that they are protected from adverse currency movements.

James Hull, COO, MillTechFX

Outsourcing

FX is one of the largest and most liquid markets globally, but its inherent complexity poses significant challenges. From onboarding new counterparties and centralising price discovery to navigating the intricacies of post-trade processes, managing FX operations can become a substantial administrative burden, diverting time and resources from critical business priorities.

In response, many corporates and fund managers are increasingly turning to external FX solutions to streamline these processes. By outsourcing, they gain access to greater scalability and flexibility, while freeing up internal resources to focus on strategic initiatives and core expertise.

External providers offer not only operational efficiency but also enhanced transparency through tools like transaction cost analysis, enabling firms to better assess execution quality. These solutions also consolidate FX management under a single, specialised framework, reducing complexity and driving operational clarity.

The outsourcing trend in FX is far from new, but its adoption is accelerating as firms seek to leverage specialised expertise to navigate market complexities and concentrate on delivering value in their core areas of business. This shift reflects a growing recognition of outsourcing as a strategic enabler, not just a cost-saving measure. 

Eric Huttman, CEO, MillTechFX

Geopolitics and corporate hedging

As 2024 draws to a close, UK and US corporates may finally find a moment to catch their breath after a year marked by turbulent conditions on multiple fronts. Geopolitical tensions, major elections, inflationary pressures and global economic imbalances have come in unpredictable waves, fuelling market volatility that challenged them to actively manage risk in an unpredictable environment. 

The US election’s dramatic and immediate market impact drove many UK and U.S. corporates to reassess their FX hedging strategies. Over nine in ten (94%) are changing their FX hedging programmes due to the outcome of the election. The most popular moves are increasing hedge ratios, which means buying more protection and extending hedge lengths, which means buying protection for longer. This underscores a desire among businesses to secure certainty amid market volatility. 

While overall hedge ratios and lengths remained relatively stable compared to Q1 and Q2, subtle regional differences emerged. UK corporates are gradually trimming their hedge lengths but US corporates are extending their hedge lengths, which increased to over seven months. This suggests they’re gearing up for a period of uncertainty and want to lock in rates for longer.

With geopolitical and economic concerns showing no sign of slowing down, in 2025 we expect geopolitical tension to persist as a key concern within the FX market. We predict that corporates and fund managers alike will continue to ramp up their FX hedging activity in an effort to mitigate volatility in currency markets.

Automation and AI 

In 2024, 34% of UK corporates still use phones to instruct FX transactions, while 32% still use email. Relying on outdated processes for transactions in today’s tech-driven world is not only inefficient but leaves companies highly susceptible to human error, putting strain on operational resources and making it harder to mitigate the impact of currency volatility.

However, change is afoot. This year, firms continued their shift away from traditional providers and legacy infrastructure, replacing them with tech-enabled solutions. 100% of finance leaders at UK corporates now report to be exploring AI in some form. 

Automation and AI solutions digitise and automate end-to-end workflow, enabling greater transparency and helping businesses to streamline their FX functions. The key areas where AI was deployed by UK businesses this year were risk management, FX operations and process automation, while automation efforts were focussed on price discovery, risk identification, and trade execution.

As businesses become more aware of the negative impacts that manual processes have on their FX processes’ efficiency and costs, we expect to see more adoption of automation and AI in 2025. By automating FX operations, businesses can access comparative prices from multiple liquidity providers in a single marketplace, enabling them to bypass inefficient phone call and email exchanges. This vastly increases the efficiency with which businesses can find best execution on FX trades, empowering them to more effectively lock in a price.

Nick Wood, Head of Execution, MillTechFX

Strong Dollar

At the start of 2024, the outlook for the dollar was uncertain. Analysts expected a dovish shift from the Fed, decreasing the attractiveness of dollar-denominated investments and opening the door for other global currencies to gain against the greenback.

However, this was not the case as the Fed stood its ground, causing the dollar to rally against its G10 peers and maintain this strength throughout the year. This sustained strength has caused issues for North American corporates, 93% of whom reported that it had weakened their company’s position in economic markets.

The dollar looks like it will stay stronger for longer, with Donald Trump set to take office in January. Despite his vocal preference for a weaker currency, his proposed policies tell a different story. Introducing tariffs on imports and resetting the macroeconomic framework to achieve a looser fiscal policy may in-turn lead to tighter monetary policy which will likely cause a strengthening of the dollar.

The risk is that the US dollar – which is expensive already – becomes more obviously overvalued, increasing the risk of global financial instability.

Strong pound

It has been an eventful year for the pound. It showed unexpected strength earlier this year, outperforming over 90% of global currencies, before hitting a five-month low in April. It then rallied in Q3 2024, reaching a two-and-a-half-year high against the dollar.

The impact of this unforeseen strength has resulted in a mix of outcomes. Whilst 83% of UK corporates said the stronger pound impacted their bottom lines – sentiment on whether it was a positive or negative impact was split down the middle.

For exporters, a strong pound makes their goods more expensive for foreign buyers, making it hard to compete international. Whereas, for importers a stronger pound allows them to purchase foreign goods at a lower cost, improving their profit margins.

It looks like the pound will continue to divide opinion as we enter the new year. As the inflation release in November showed a rise in the UK, the Bank of England looks likely to maintain its 4.75% interest rate in December. With the ECB and Fed being priced as a higher probability to cut rates, the UK will likely see an influx of foreign investment, ensuring sterling remains buoyant.

Julia Khandoshko, CEO, Mind Money

Since 2018, the world has seen an increase in the frequency of “black swans” — unexpected and serious crises that affect the economy and society. However, 2025 is seen as a period of recovery. After many global shocks, the world economy, like an organism after an illness, begins to develop “immunity” — the ability to adapt and respond to challenges. This will manifest itself both in strengthening regulatory mechanisms and in more thoughtful approaches to risk management for the stock markets.

Despite the attention to geopolitics — military conflicts or political crises — their impact on key economic trends will not be so significant. The main changes will take place under the influence of internal market mechanisms, technologies and regulatory changes, rather than external shocks.

Significant development has been observed in the field of decarbonisation and green technologies. Abandoning internal combustion engines, increasing battery life, and new approaches to energy are all becoming an important part of the agenda. For example, BWM continues to produce both traditional cars with internal combustion engines (ICE) and electric ones.

As the EU plans to abandon ICE by 2030, the industry faces a transitional stage. Given this, either technologies are moving into mass use, or it becomes obvious that their current level is insufficient to solve problems. This game-changing moment is likely to come in 2025, and the direction of development of the global market will depend on it.

George Gerchow, Head of Trust, MongoDB

Looking ahead to 2025, I anticipate a surge in nation-state insider threats, with ‘fake’ employees infiltrating companies to exfiltrate data or hold organisations ransom. We’re seeing the dawn of a new era where the combination of AI-driven attacks, deepfake technology, and heightened regulation will make cybersecurity more complex than ever.

AI will be instrumental both as a threat and a defense in 2025. From enhancing internal and external bots for automated GRC and audits to helping security teams scale against sophisticated threats, AI’s influence on cybersecurity will be both powerful and unavoidable.

The shared responsibility model for cloud security is proving insufficient as multi-cloud and hybrid environments expand. As outages and third-party supply chain attacks increase, we’ll see more reliance on developers who understand the full scope of major cloud platforms, while MFA becomes essential across all CSPs.

Matthew Hodgson, Founder, CEO, Mosaic Smart Data

Ten trends shaping AI-driven data analytics in 2025

2024 has been another year of unprecedented growth for AI and machine learning across the financial services industry, with a staggering 80% of trading firms now using this cutting edge technology. As we head into 2025, what will be the trends that dominate the industry as firms continue to leverage this technology and harness the power of transaction and market data? 

AI-driven decision-making

Investment banks will increasingly rely on AI-driven insights for decision-making, moving from historical data analysis to predictive analytics. AI models will be used by a growing number of trading firms to process vast amounts of unstructured data, improving forecasting and strategic planning.

Hyper-personalised client engagement

Using data analytics, investment banks will continue to improve their ability to offer hyper-personalised experiences tailored to clients’ investment preferences, risk profiles, and financial goals. This kind of personalized advisory will enable banks to deliver tailored solutions, deepen relationships, and anticipate client needs, boosting engagement and retention.

Real-time decision-making

Real-time data platforms will drive quicker, more informed decisions in trading, risk management, and client interactions, optimising performance and reducing latency in execution. Coupled with machine learning, this will enhance risk assessment, allowing banks to manage risks on a transaction-by-transaction basis. Predictive analytics will increasingly be used to flag potential risks before they impact the bank’s portfolio.

Digital transformation in sales and trading

Digital tools and advanced analytics will automate workflows, optimise trade execution, and provide insights to increase sales performance and maximise profitability across asset classes.

Optimised liquidity management

Banks will use data to better predict liquidity needs, align inventory with client demand, and improve balance sheet efficiency, particularly in fixed-income markets. Promoting inventory to the most probable client demand will become table stakes.

AI-powered compliance and surveillance

Machine learning will enable the integration of transaction and communication surveillance, enabling better detection of fraud, insider trading, and other compliance risks to increase the identification of bad actors.

Cross-silo data integration

Investment banks will focus on breaking down internal silos by integrating data across business units, enabling holistic insights into client activity, profitability, and operational efficiency.  This will significantly improve sales effectiveness to cross sell products across asset classes.

Client profitability analytics

Banks will adopt more sophisticated client profitability tools, analysing granular transaction data to identify high-value relationships and allocate resources more effectively.

Expanding use of alternative data

Non-traditional data sources, such as social media sentiment, satellite images, and climate data, will play a more significant role in investment strategies. Banks will leverage this alternative data to gain insights into market trends and investment opportunities to drive alpha generation.

Harnessing innovation to drive cost-effectiveness

Rather than viewing innovation as a ‘nice to have’ expense, firms will increasingly look to new technologies to drive the efficiency and cost-effectiveness of their operations, with a laser focus on ROI for any new solutions they deploy.

Tom Lenihan, Director of Marketing, MuchBetter

2024 marked a turning point for contactless payments as wearable technology took centre stage, redefining convenience and style. This year saw innovative strides in wearable payment solutions, from sleek, fashion-forward rings to versatile smart bands, offering consumers a seamless way to pay on the go, whether at coffee shops, festivals, or during their commute. These devices, designed for simplicity and security, eliminated the need for wallets or smartphones, placing unparalleled convenience at customers’ fingertips.
The year’s highlights included the launch of the Samsung Galaxy Ring and the latest Oura Smart Ring, which brought attention to the multifunctional potential of wearables by combining payment capabilities with health-tracking features. While these devices pushed the boundaries of technology, their high costs and reliance on batteries highlighted the need for more affordable and practical alternatives.

Looking ahead to 2025, we anticipate a growing demand for smarter, more affordable wearable tech as early adopters advocate for widespread innovation. Businesses will increasingly recognise the shift toward integrated contactless solutions as a way to enhance customer experiences.

Mario Shiliashki, CEO myPOS

In 2024, we have been impressed with instant settlement and immediate access to funds remaining top priorities for small and medium-sized enterprises (SMEs). These capabilities have become essential for maintaining cash flow and operational efficiency in an increasingly competitive market. Additionally, many SMEs highlight the need for easier access to funding options, such as merchant cash advances or credit, to support growth and manage challenges. Recognising these demands, we have introduced innovative solutions to deliver faster settlements and flexible financing, empowering SMEs with the tools they need to thrive in a dynamic business environment.

We are sure we will see a continued shift towards cashless payments, driven by both consumer preferences and local regulation. This is especially true in the SME segment where cash is still higher as % of turnover than in the rest of retail consumer spend.

The growing adoption of AI in business will continue, driving fraud prevention, compliance automation, faster customer service, and highly personalised financial solutions, particularly for SMEs. These small businesses will benefit from smarter tailored solutions that were so far only available to larger enterprises. Real-time insights, analytics, automation will be accessible to millions more businesses with the power of AI.

Andrew Ellis, CEO, NatWest Boxed

Embedded finance and the re-bundling of financial services 

In 2025, the great re-bundling will accelerate – driven by financial institutions themselves, but also increasingly by non-financial services (FS) brands.

Previously only available directly from the source, the growth of embedded finance has seen financial services embedded directly into the ecosystem of popular brands. So far, we have seen businesses such as retailers integrate select services, initially with a focus on convenient payment options — BNPL being the most obvious example. Over the next 12 months, expect to see brands introducing new offerings to build a patchwork of convenient products and services that enhance customer choice.

We’ve already seen brands like Shopify and Apple build out their financial services to the point they now operate, in effect, like a bank. Other leading brands will follow suit, collaborating with FS providers to establish a new normal where customers can turn to their favourite brands for all their finance needs.

Make no mistake, banks will continue to play an integral part in this journey. Regulatory scrutiny continues to raise the bar for compliance, and non-FS businesses on an embedded finance journey will increasingly seek providers that have their own banking licence and compliance expertise.

Tom Byrne, General Manager of EMEA Commercial & Mortgage, nCino

2024 has been an exciting year in the world of banking, particularly with advancements in data management and AI. Banks have sharpened their focus on data cleaning and standardisation allowing them to gain clearer insights into their operations and informing their decision-making. As organisations utilise AI to surface insights faster and more effectively, “knowledge efficiency” will be more important than ever in creating actionable AI outcomes.
Looking to next year, private credit disruptors are reshaping the lending industry, responding to opportunities with speed and accelerating the growth of private credit, which is expected to top $3.5 trillion globally by 2028, according to Deloitte. For traditional financial institutions, this means stepping up their credit portfolio management to compete with these non-bank players.
How banks approach their balance sheet strategy will also be crucial in 2025 as economic and political factors continue to impact the sector. These organisations will need to find an equilibrium between loans and deposits to weather market volatility and protect their bottom lines. Above all, relationships will continue to anchor success next year. Focusing on strengthening client partnerships alongside innovating is not only a smart growth strategy—it’s vital for long-term trust and resilience in an evolving landscape.

Laurent Descout, co-founder and CEO, Neo

PSPs moving away from banks

PSPs have historically relied on traditional banking partners to operate their businesses and to deliver their core services. However, these relationships have been fraught with challenges, hindering their ability to operate efficiently and meet market demands.

At a time when digital payments are accelerating, PSPs can no longer afford to accept the outdated and slow processes which traditional banks continue to provide.

More concerningly, they also can’t accept the uncertainty of potential account closures or restrictions which new research has found that 95% of PSPs have faced, often without clear communication.

The good news is that PSPs now have alternative options with fintechs reshaping the market, driving competition, and setting new benchmarks for efficiency and service. In 2025, we should expect more PSPs to shift towards fintech partners, with 75% of PSPs actively exploring fintech solutions this year.

Stablecoins

Many financial institutions and industry stakeholders now see the huge potential of stablecoins and the benefits they could bring from bypassing the inefficient and slow processes of traditional payments to the increased security, recordkeeping and transparency.

As a result, legislation is coming down the tracks fast. The UK has stepped up its efforts to redefine the rules around staking and there’s hope that the US Congress could advance stablecoin laws before the end of the year.

While it’s too early to say if stablecoins will eventually replace traditional forms of payments, treasurers must be prepared for increased adoption in 2025. They should read up and stay abreast of the latest developments and start having conversations about their viability and digital wallets which allow them to hold and utilise them. Those who don’t, risk being left behind.

Adoption of AI in finance 

While 2023 saw the boom of AI and large language models, this year we saw how industries are being transformed by using the technology and the payments industry is no different. AI is improving the analytic capabilities of payment firms, meaning thousands of transactions can be checked in a couple of seconds.

The technology now extends beyond chatbots and digital assistants, encompassing areas such as fraud detection and prevention, as well as investment management. However, achieving the right balance between human interaction and maturing technologies requires careful thought.

We should also look to 2010 when banks spent huge amounts to cope with the first wave of fintech innovation, which didn’t exactly work out for them. Given banks are risk-averse institutions, there are also plenty of challenges around AI that need to be thoroughly examined first, such as data protection, before banks commit to further AI adoption in 2025.

FX hedging remains essential 

In 2024, currency volatility remained a top concern for businesses as geopolitical tensions, monetary policy shifts and economic uncertainty shaped the global landscape. From the pound’s challenges post-U.S. election to rising hedging costs, FX risks are pressing—and treasurers must shift from reactive to proactive FX risk management strategies.

Traditional reliance on banks often results in poor pricing, slow execution, and outdated tools, leaving SMEs particularly exposed to currency fluctuations. Thankfully, fintech solutions offer a smarter alternative, providing real-time insights, better pricing models, and seamless integration with financial systems. These innovations empower treasurers to lock in exchange rates, hedge effectively, and align risk management with cash flow forecasting.

In today’s volatile markets, robust FX hedging is essential for financial resilience and sustainable growth. In 2025, we will continue to see the adoption of modern tools so businesses can protect profitability, navigate uncertainty, and seize opportunities. The stakes are high—those who fail to adapt risk falling behind.

Neil Thacker, CISO EMEA, Netskope

In 2025, agentic AI will significantly impact businesses, requiring security and privacy professionals to rethink their businesses’ current protection systems. Safeguarding these systems involves securing data, reasoning engines, and outputs while implementing fully automated protections to enable true business autonomy. However, many organisations are not yet ready for this leap. To stay ahead, leaders must adopt robust frameworks, much like those used for GenAI, ensuring innovation and security go hand in hand as agentic AI reshapes operational landscapes.

Greg Sullins, Leader, US Banking CoE, Newgen Software Inc

As we enter 2025, we foresee a transformative year for the banking industry. With the rapid advancement of digital technologies and evolving customer expectations, financial institutions must prioritise agility, innovation, and seamless customer experiences. AI-powered low-code automation platform is designed to meet these demands head-on. By enabling end-to-end process automation, enhancing regulatory compliance, and fostering a boundaryless workplace, we empower banks to modernise their legacy systems and workflows. The three Ds – dynamic, dependable, and digital-first banking – ensures that banks stay competitive and deliver unparalleled customer satisfaction.

Tommaso Jacopo Ulissi, Head of Strategy and Transformation, Nexi Group

Five payment trends to expect in 2025

The pandemic accelerated the adoption of digital payments, driven by a surge in online commerce. Today, digital payment methods, especially mobile payments, have matured across Europe as consumers embrace diverse digital channels with ease.

Convenience and a wide range of options have emerged as key purchasing drivers, providing significant opportunities for innovation to ensure more inclusive and seamless payment experiences.

With this in mind, what can we expect from payments in 2025?

Mobile as a primary facilitator of payments

The smartphone is rapidly cementing its position as the number one payment form factor, for both consumers and merchants alike.

Consumers value the ability to leave their physical wallets behind, relying solely on their smartphones. Adoption will continue to grow, in part because consumers also value the added layer of security offered by mobile payments, leveraging facial or fingerprint biometrics to authenticate contactless transactions.

In 2025, merchants will increasingly adopt SoftPOS solutions, which effectively turn smartphones into trusted payment terminals. These systems will complement existing payment terminal setups, enhancing flexibility and enabling ‘roaming’ sales. SoftPOS can also serve as a back-up solution or a queue-buster during busy periods, ensuring scalability and flexibility increasing acceptance and conversion.

Digital payments enabling seamless, smart mobility

Travel payments are undergoing a revolution, with card-based payments unlocking new levels of convenience. Consumers now expect innovative solutions that support seamless journeys, and payment technology must support this transition to smart mobility.

Digital and app-based solutions are a great way to ensure travellers get a “best fare guarantee” so the consumer is charged in the most cost-effective way, based on actual travel activity, which in most cases cannot be precisely determined before travelling.

Key advancements in smart mobility payments during 2025 will include integrating payment functionality directly into travel cards and mobile wallets, mobile in-app payments, and fully automated options like license plate recognition for tolls or parking.

Sustainable solutions growing in importance

Consumers in 2025 will be more conscious of “localisation” in terms of where they conduct their online purchases, and the conditions under which products are made, also considering the CO2 emissions related to intercontinental transport.

Half of consumers surveyed by Nexi believe sustainable online shopping options are lacking and they would actively choose them if they available. Merchants who provide these options can differentiate themselves with a “green profile”, such as incorporating eco-friendly packaging and transport methods to attract and retain customers.

In the Nordics, the shift to digital receipts is an example of how payment innovation can directly reduce environmental impact, offering convenience and reducing waste. Payment providers like Nexi are also integrating sustainability into value chains to reduce environmental impact. By digitalising processes and fostering innovation, this will help businesses unlock their ESG (Environmental, Social and Governance) potential while achieving their own sustainability goals

Verticalised, personalised payments

Catering to diverse customer preferences is critical in today’s market. Payments will play a pivotal role in shaping retail and hospitality experiences in particular, moving beyond transactional utility to become a key driver of customer engagement.

Payment solutions will become increasingly embedded into industry-specific software, enabling businesses to streamline operations and leverage value-added services that can transform how they operate. For instance, a restaurant can integrate reservation systems, table management, post-sale analytics and payments into a single platform.

In retail, online and physical environments are merging into a seamless, omnichannel experience, where a customer may browse items online, reserve them, and complete the purchase in-store. Integrated payment systems ensure consistency across channels, with no discrepancies in pricing, discounts, or loyalty rewards.

Frictionless payments are critical in hospitality settings, where delays or complications can create negative experiences. For example, table-side payment systems and contactless options will reduce wait times and enable customers to split bills easily, leaving a lasting positive impression.

CBDCs: not ‘if’ but ‘when’

We’ve been talking about CBDCs for a few years now, and 2024 saw significant momentum build: so far, 11 CBDCs have been launched and most European countries are engaged in initiatives and/or developing projects.

From Nexi’s unique perspective, being involved in relevant working groups at a pan-European level and supporting the European Central Bank (ECB) in developing front-end prototypes, we can say that the Digital Euro is approaching fast and could be launched as soon as 2027.

In the short-term though, 2025 will be a year of continued advancement, with new user research and experimentation, innovation partnerships to test and explore other potential use cases, and the development of a methodology for setting digital euro holding limits.

CBDCs are not intended to replace other forms of money, but rather to complement them, stimulating further digitisation of payments, driving innovation, promoting financial inclusion, and broadening access across the consumer payments ecosystem.

James O’Sullivan, CEO and Founder, Nuke From Orbit

While technology cannot physically prevent issues like shoulder surfing, AI is advancing in detecting behavioural anomalies to prevent fraud. Future innovations could even include hardware solutions, such as a type of smart glass that activates a “privacy” mode for sensitive tasks. This concept seems achievable, given the availability of technologies like folding screens. However, reducing false positives remains challenging, as overly cautious systems can frustrate users. The goal is to develop adaptive systems that balance vigilance with understanding individual user behaviours, enabling proactive security without compromising usability.

The rising threat landscape-how can consumers stay protected?

Mobile payments, which enable high-value, biometrically authorised transactions, have heightened risks. Unlike contactless cards with transaction limits, phones allow seamless access to substantial funds, increasing the stakes if compromised. Consumers should treat phones as critical security devices, enable biometric locks, monitor app permissions, and promptly update software to protect against vulnerabilities.

New threats within the FinTech and Payments industry

AI-driven fraud, including voice cloning and data aggregation, is an emerging threat that leverages personalisation to deceive victims. The industry must invest in sophisticated AI tools for behavioural analysis and multi-layered authentication to counter these threats. User education will also play a vital role in helping people recognise and avoid highly personalised scams.

Kevin Levitt, Global Director of Financial Services, NVIDIA

AI agents boost firm operations

AI-powered agents will be deeply integrated into the financial services ecosystem, improving customer experiences, driving productivity and reducing operational costs.

AI agents will take every form based on each financial services firm’s needs. Human-like 3D avatars will take requests and interact directly with clients, while text-based chatbots will summarise thousands of pages of data and documents in seconds to deliver accurate, tailored insights to employees across all business functions.

AI factories become table stakes

AI use cases in the industry are exploding. This includes improving identity verification for anti-money laundering and know-your-customer regulations, reducing false positives for transaction fraud and generating new trading strategies to improve market returns. AI also is automating document management, reducing funding cycles to help consumers and businesses on their financial journeys.

To capitalise on opportunities like these, financial institutions will build AI factories that use full-stack accelerated computing to maximise performance and utilisation to build AI-enabled applications that serve hundreds, if not thousands, of use cases — helping set themselves apart from the competition.

AI-assisted data governance

Due to the sensitive nature of financial data and stringent regulatory requirements, governance will be a priority for firms as they use data to create reliable and legal AI applications, including for fraud detection, predictions and forecasting, real-time calculations and customer service.

Firms will use AI models to assist in the structure, control, orchestration, processing and utilisation of financial data, making the process of complying with regulations and safeguarding customer privacy smoother and less labour intensive. AI will be the key to making sense of and deriving actionable insights from the industry’s stockpile of underutilised, unstructured data.

Jeff Brummette, Chief Investment Officer, Oakglen Wealth

As reactions to the US election continue to roll in, there has not yet been a negative market reaction to the proposed tariffs or mass deportation of undocumented immigrants announced by President-elect Trump. Tariffs can be implemented at pace so an impact could be felt by the end of the first quarter, while tax policies would be unlikely to occur until late in 2025.

US markets have outperformed the rest of the world – even when excluding the ‘Magnificent 7’ stocks – with the outperformance accelerating in November. It is too early to pinpoint which factors, if any, might stop or reverse this sustained outperformance of US assets.

President-elect Trump’s economic team have made remarks which suggest the new administration would not necessarily increase the US budget deficit. This has encouraged a decline in longer-term yields. Across the Atlantic, European yields have seen a dip, caused by economic weakness in Germany. Meanwhile, UK yields retreated from recent highs due to favourable inflation data. The global investment environment remains positive, bolstered by stable economic growth and moderating inflation.

Both the US Federal Reserve and the Bank of England lowered their policy rates in November, with further cuts possible so long as inflation remains curbed. Similarly, the European Central Bank has signalled its intention to further reduce interest rates, showing potential for more moderate monetary policy throughout next year. Energy prices continue to decline and labour markets remain tight, which as a combination supports business and household spending and could lead to further positive performance in risk assets. Fixed income also generated positive returns in November, after poor returns in the previous two months.

In response to the Trump presidential win, we have added exposure to US small cap stocks and increased our holdings in US financials – two areas which are poised to benefit from lower taxes and regulatory reforms. The US energy sector could also benefit from a more relaxed regulatory environment. We naturally anticipate greater volatility next year due to President-elect Trump’s unpredictable leadership style. Nonetheless, we remain optimistic.

Jerry Mulle, UK MD, Ohpen

2024 has been a tumultuous year for fintech and financial services. With significant elections in the UK and the US, shifting inflation rates, base rate cuts, evolving regulations and growing consumer scepticism, the year has proven to be both turbulent and unpredictable.

As we look ahead, 2025, the volatility of the past year is expected to persist. Coupled with rising consumer demand for mortgages in the UK – fuelled by Labour’s plan to build new homes – and the evolving demographic of mortgage applicants, particularly Gen Z, who increasingly have multiple sources of income from freelancing and side hustles, will push mortgage providers to adopt new strategies, and offer more niche mortgage packages and products.

This shift won’t be limited to the neo-banks, however. These comprehensive external pressures will catalyse traditional big banks through to small building societies to modernise their legacy systems or face the risk of alienating consumers and losing their market share.

It’s very likely that 2025 will see what are currently considered “niche” mortgage products start to become standard offerings in the industry. Organisations must embrace such change and move forward by adopting new, more effective solutions, or risk falling behind.

Barry O’Sullivan, Head of Banking and Payment Infrastructure, OpenPayd

Cross-border payments

I expect to see continued advancements in cross border payments in 2025 – we have already seen countries like Singapore & Thailand and Malaysia & Thailand working together to join payment systems for real-time cross border payments. Not only will there be more collaboration in regions, but also growth globally in real-time. The use of stablecoins in payments will play a big part in this.

Fraud and compliance

With new regulations in the payment industry, APP Fraud for example, companies are going to have to ensure that they are compliant and have the right measures in place to deal with the growing amount of fraud attacks globally. Fraud is becoming increasingly more challenging to spot and protect against, with criminals using very sophisticated ways to scam individuals and businesses out of their money. AI and deepfakes are becoming scarily accurate.

Embedded finance

We will see companies starting to understand what will be best for them in terms of offering services related to their business and then embedding the right solutions in 2025. For example, it wouldn’t make sense for a supermarket to offer vIBANs to clients, but if you’re an online store who only takes cards as payment method, considering providing a branded credit or debit card, it would make sense to add new revenue streams.

We will continue to build our offering of rail agnostic payments, so that our clients have more choice and more solutions to offer to their end customers. We are seeing a lot more focussed and customised offerings within the market, embedded payments, lending, banking, insurance etc and I think this will continue to grow under the overall “Embedded Finance” badge.

AI and machine learning 

No doubt, internal AI tools will advance and evolve further in 2025 to support many in-house departments to streamline processes and reduce cost and time for the tasks that do not need a human.

I can see internal AI tools advancing and evolving to support many in-house departments to streamline processes and reduce cost and time for the tasks that do not need a human.

Open banking and banking-as-a-service

Open Banking will continue to grow as the market matures with businesses and merchants being key to growth here. Yet there still needs to be more education on the end user as they will ultimately be the ones that decide the adoption. This for me is down to the merchants, business etc to drive this education and even offer incentives for customers. There is a nervousness for an individual to have another app open their banking app and many get scared off by the process and choose another payment method. Education around safety and security is paramount for success.

Lux Thiagarajah, Director of Growth, OpenPayd

In 2025, we can expect cryptocurrency to grow significantly for a couple of reasons, primarily, macroeconomic and regulatory factors. Trump’s anticipated policies could provide support for the crypto market, especially with global interest rates levelling off and potential investor interest in higher yields. Stripe’s acquisition of Bridge has already pushed stablecoins further into the mainstream, signalling stablecoins becoming a central part of the payments ecosystem.

Another key theme is tokenization, although it may be less prominent than stablecoins. Tokenization could revolutionise asset classes by allowing broader accessibility to investments. Additionally, clearer regulations from Washington may bring stability, encouraging more institutional involvement. However, there is a risk that if the administration does not fully support crypto as anticipated, the regulatory landscape may remain unpredictable​.

This is going to be an exciting year for the industry with mainstream cryptocurrency adoption being in sight! This adoption will be driven by regulatory clarity, a crypto-friendly US government, and increased institutional investment. As regulations build trust, major institutions and banks may feel more secure entering the crypto space. This could lead to substantial asset allocation from major funds, legitimising crypto as a competitive asset class, causing essentially a domino effect. With fewer “bad players” like SBF, the market will hopefully gain stability, inviting broader public and institutional engagement.

The use of stablecoins in cross-border payments and FX trading could shift traditional EUR/USD trades towards EUR/USDC transactions, where the exchange rate remains EUR/USD but at least one leg is settled using stablecoins.

Regulations will affect market dynamics

Regulation is going to be key in 2025, likely bringing legitimacy, resiliency, and, most importantly, trust to the crypto market. With regulation increasing, the crypto market will begin to become more appealing to major institutions. While crypto traditionalists may fear the idea of tighter regulation, it’s essential for crypto to compete with established asset classes and attract significant investment, ultimately stabilising and growing the market.

Blockchain innovation

In the coming years, stablecoins and CBDCs will likely transform payments and financial stability. However, we are also excited to see how blockchain in gaming will drive user ownership and new revenue models, accelerating blockchain’s mainstream adoption across various industries.

Sam Liang, CEO, Otter.ai

The three ‘A’s’ of AI: AI avatars, agents and assistants, will transform workplace productivity in 2025. By the end of the year, at least 20% of C-level executives will regularly use AI avatars to attend routine meetings on their behalf, allowing them to focus on more strategic tasks while still maintaining a presence and making decisions through their digital counterparts. Use of AI Agents to conduct tasks will also accelerate, with 25% of sales calls, recruiting interviews, and customer support calls conducted by voice agents, instead of humans, in 2025. And AI-powered meeting assistants will become standard in most enterprise settings over the coming year. This can save teams an average of four hours a week and increase productivity by automatically generating action items, summaries, and follow-up emails.

Huw Davies, CEO & Co-Founder, Ozone API

This year we’ve seen significant developments in open banking regulation globally. In the UK OBL released the first major upgrade to the standards in quite some time (OBLv4) which is mandated for a number of banks including the CMA9 banks; the US launched Section 1033 of the Dodd-Frank Act, marking North America’s first official open banking laws; and countries across MENA including the Kingdom of Saudi Arabia and the UAE made remarkable progress on their open finance roadmaps.  

As we enter 2025 I expect more significant advances in the global open banking landscape in 2025. Following the publication of the government’s payment vision and the evolving smart data roadmap the UK may start to see renewed momentum as it works to regain its early global leadership position, bringing new consumer-focused applications, particularly in mortgages and sustainable finance. However, competition from global markets will only increase as a number of markets look to move quicker and more broadly with the open finance agendas, in particular markets like the UAE.  

Meanwhile, I suspect in the US we’ll see the market moving as they prepare to deliver open banking APIs in response to 1033. And whilst not confirmed it’s probable that they’ll be building to the Financial Data Exchange (FDX) standards. I’ve no doubt the new political leadership will create some further twists and turns. We’ll also see a number High-growth markets, in Latin America, Asia and possibly even Africa start to adopt open banking rapidly. We’ll likely see these regions more quickly building on learnings from other markets in order to get there faster and at a lower cost. One very important development is that I expect we will see the first real moves towards connecting national open banking ecosystems to create cross border interoperability.

Ozge Celik, Head of Product, Papara

It’s no secret that the trend for personalisation in financial services is only continuing to grow, and fintechs are largely driving it. Ultimately, highly tailored experiences for users are no longer a ‘nice to have’ but an expectation. This begins with leveraging customer data insights to gain a deeper understanding of users’ habits and preferences, and with the implementation of AI across the industry – particularly when it comes to data analysis at scale – the ability to deliver hyper-personalised solutions and offerings will become the standard in 2025. By building financial experiences in this way, both fintechs and more established banks alike can become further ingrained into their customers’ lifestyles and will put themselves in a position of no longer responding to their demands but anticipating them.

Manpreet Haer, CEO and co-founder, PayFuture

In 2025, we will see fintech making a tangible and positive impact on improving financial inclusion. Globally, there are 1.4 billion unbanked people who can’t access financial services, while around 345 million micro-enterprises are informal and struggle to get formal banking services. This is a financial literacy and exclusion gap that needs filling – fast.

Without financial inclusion, the world economy will stagnate, and underbanked populations will suffer – but fintech is the key to unlocking a new era of prosperity for all. Look at local community and microcredit cooperatives in rural Africa that help women to engage with financial services, the success of local payment methods in Africa, to national digital transformation programmes like Saudi Arabia’s Vision 2030 initiative. New technologies have helped emerging markets make great strides in closing the financial exclusion gap, which is getting smaller by the day, but much more needs to be done.

But this means that fintechs and other ecosystem players have a responsibility to understand what market they’re operating in, understand what customers need in those markets, and localise their solutions accordingly. That also means speaking in the local language, offering clear and transparent pricing, and forging reliable partnerships with the right providers to ensure people have a wide choice of payment methods available to them.

Hristo Borisov, CEO, Payhawk

AI will help CFOs transition from gatekeeper to strategic partner

Today’s CFO faces immense pressure to manage an increasingly complex role, and shift from being seen as a gatekeeper to a strategic business partner. Yet many are still grappling with disconnected systems that make it difficult to surface the most useful and accurate data and drain efficiency, leaving them stretched thin and unable to focus on driving the business forward.

Investments in new and improved CFO technologies are on the horizon for 2025, and AI will play an instrumental role in helping finance teams break out of the gatekeeper role. 48% of finance leaders plan to integrate AI into business intelligence (BI) and data analytics tools, with financial forecasting solutions (52%) and spend management software (45%) high on the priority list.

Armed with the ability to improve their core advantage — bringing together and analysing all the business’ key data — will elevate the role of the CFO from gatekeeper to strategic partner. Thanks to the introduction of modern tools we will see finance teams grow, not shrink, become key strategic players within the business, and develop better working relationships with their organisation.

Raquel Orejas, Impact Director, Payhawk

ESG tracking will become embedded into financial management

With the Corporate Sustainability Reporting Directive (CSRD), we’re witnessing a change in how businesses measure and report their environmental and social impacts.

2025 will be a turning point for ESG transparency and accountability, as reporting and assessment becomes more standardised. While currently only medium to large businesses are required to report under CSRD, SMEs will soon begin to prepare for these future regulations.

With that in mind, we can expect to see more businesses leveraging new carbon tracking solutions that are embedded directly into spend management platforms. Armed with the ability to automatically track carbon emissions on all card spend, businesses will feel more empowered to identify potential carbon-saving initiatives, evaluate suppliers based on sustainability criteria, and integrate ESG into decision-making.

Randy Modos, CEO, PayJunction

Surcharging

In 2025, with continued increases in credit card processing fees, surcharging will become more common as a way for businesses to offset costs. As businesses look for ways to protect margins in a high-fee environment, surcharging will play a critical role in maintaining profitability while offering customers a choice of payment methods. However, in 2025, businesses will face stricter regulations around data privacy and security. Businesses must be mindful of evolving legal standards, which can differ from state to state, when implementing surcharges. Additionally, as businesses across industries increasingly adopt subscription services, having efficient recurring billing options will be crucial. These companies will also be looking for solutions that add the ability to apply surcharges to credit card transactions, reducing the impact of processing fees for businesses operating subscription models.

AI in payments
While AI and automation have played roles in fraud detection and personalisation in 2024, we’ll see a broader integration in transaction analytics, predictive payment systems, and workflow automation. AI might enable businesses to anticipate payment issues or optimise transaction times, leading to more proactive payment management and costs.

Consolidation
As industries like veterinary care, healthcare, and automotive continue to consolidate in 2025, streamlining operations will be key to maintaining profitability. As businesses consolidate, they often face challenges integrating multiple systems. Consolidated organisations will be looking for solutions that not only reduce overhead, compliance, and costs but also provide more transparent insights into payment data, enhancing decision-making across the organisation. Additionally, maintaining compliance across multiple locations and jurisdictions becomes a critical concern for consolidated businesses. Organisations will have to ensure payment workflows—whether through surcharging or data handling—remain compliant with local and federal regulations. Consolidated businesses in particular should focus on leveraging automations and integrations to drive operational efficiency and improve overall customer experiences in 2025.

Kyle Ouzts, Director of Strategic Partnerships, PayJunction

Payments trends

In 2025, I expect to see an increase in embedding, AI, and distribution partnerships in the fintech space. Embedding will rise not only in payments, but in merchant lending, consumer lending (BPNL), financial management — more integrated payment solutions will result in more efficient operations for merchants and a seamless transaction experience for consumers. In an even more prominent role than we saw in 2024, AI will inform quoting, onboarding, servicing, and fraud protection & detection. Finally, distribution partnerships like card schemes and an increase in bundled technology will result in wide expansion, both geographically and in the global payments ecosystem.

Compliance

When it comes to compliance in 2025, we’ll continue to see increased regulation surrounding surcharging. As credit card processing fees increase, merchants are likely to turn to surcharging to offset and manage costs. Like we saw in New York legislation earlier this year, surcharging regulation will likely encourage price transparency for consumers. Other areas I expect to see regulatory shifts include GDPR, debit routing, and consumer financing options.

Partnerships

In the veterinary, automotive, and healthcare industries, navigating consolidation will be a challenge in 2025. Businesses need to ensure that they’re managing operations and workflows efficiently. Surcharging will be a vital tool for businesses looking to offset processing costs. Additionally, these industries will still be dealing with latent technology that doesn’t meet the consumer where they are in their payments journey. Without flexible payment options, businesses in these industries risk missing out on revenue.

Ivo Gueorguiev, co-founder, Paynetics

As embedded finance continues to evolve, 2025 promises to be a defining year for the sector. The key to its success will lie in businesses prioritising regulatory compliance, adopting new technologies, and addressing the needs of underserved markets, particularly SMEs.

With regulatory scrutiny on the rise, businesses must embed compliance measures like KYC, AML, and transaction monitoring directly into their financial products. This ensures that convenience doesn’t come at the expense of security. While APIs have traditionally been the go-to solution, Software Development Kits (SDKs) are poised to take centre stage. SDKs offer a secure and practical option for businesses without in-depth financial expertise, as they package both the financial service and its regulatory components together. This will make it easier for businesses to navigate complex compliance requirements without compromising on user experience.

At the same time, the industry will see a resurgence of white-label solutions. Initially, fintech companies focused heavily on creating unique user interfaces and experiences, but as the market matures, businesses will recognise the value in leveraging established, compliant white-label financial products. This shift will enable companies to offer seamless services without shouldering unnecessary risks or costs.

AI will also become integral to compliance in 2025. By using AI to monitor transactions in real-time, businesses can detect fraud, ensure compliance, and improve operational efficiency at scale. This will be critical as the volume and complexity of financial transactions increase.

Lastly, embedded finance will empower SMEs, giving them access to sophisticated financial services that were previously out of reach. With integrated financial offerings, SMEs can enjoy better cash flow, reduced costs, and faster settlements, allowing them to compete more effectively with larger players in the market.

Patrick Lemay, Head of Corporate Development, PayRetailers

CBDCs in 2025

As we move into 2025, the conversation around CBDCs will likely intensify, with countries continuing to explore their potential for transforming payment systems. China and the Bahamas have demonstrated the viability of CBDC pilots, and it’s likely we’ll see others follow. CBDCs offer the promise of enhanced financial inclusion and payment efficiency by providing stable, regulated alternatives to cryptocurrencies, which remain volatile and complex to integrate into mainstream systems.

While challenges such as regulatory frameworks and consumer adoption persist, the evolution of CBDCs could simplify domestic and cross-border payments, reducing costs and settlement times. As the ecosystem grows, financial institutions may increasingly integrate CBDCs into their services, paving the way for more seamless and secure transactions globally.

Biometric authentication in 2025

In 2025, biometric authentication is set to become more embedded in financial services, addressing the need for secure and convenient user experiences. Technologies like facial and fingerprint recognition are increasingly seen as reliable methods for identity verification, providing frictionless access to accounts and transactions.

The trend toward multi-modal authentication, which combines various biometric methods, is expected to gain traction, further reducing fraud risks. However, global adoption remains in its early stages, with limited providers offering mature solutions. As biometrics become more prevalent, a strong emphasis on data privacy and compliance will be key for ensuring secure implementation and consumer trust.

Open Banking in 2025

Open banking is poised to remain a significant driver of innovation in financial services in 2025. In regions like LATAM, solutions such as PIX and SPEI have showcased the potential to replace traditional payment methods by offering faster, more cost-effective alternatives, especially in markets with low credit card penetration.

In Europe, the focus will likely shift to refining API standards and advancing regulations to improve integration and consumer protection. Open banking’s ability to enable secure data sharing across platforms is driving collaboration between banks, fintechs, and technology companies, fostering innovation and the development of personalised financial services. While adoption rates vary by region, open banking holds the potential to redefine how consumers and businesses interact with financial ecosystems.

Fernando Costa-Cabral, SVP Branded Payments, Paysafe

As the digital payments landscape continues to evolve, eCash will play a critical role in bridging the digital divide. Despite the rise of online payments, consumers still value cash due to the fact that it provides increased financial security and greater control over spending. In fact, our research has shown that 63% of consumers would worry if they lost access to cash. This is where eCash can drive real value for consumers, addressing the same pain points, while offering an innovative and secure digital alternative for cash-dependent consumers.

In 2025, we’re going to see greater focus on leveraging AI to improve eCash security, expanding payment flexibility, and enhancing the user experience. By offering merchants and users access to previously untapped customer segments and creating seamless payment options, eCash ensures that cash remains relevant in an increasingly digital society.

Keren Ben Zvi, Chief Data Officer, PayU GPO

As the financial sector prepares for the implementation of the Digital Operational Resilience Act (DORA), institutions will need to strengthen their defenses against ICT risks. By introducing a standardised, EU-wide framework for digital operational resilience, DORA mandates specific measures to ensure the financial sector is equipped to withstand and recover from ICT related disruptions. As a result, financial institutions and fintechs will need to rethink their approach to risk management. These strategies need to encompass everything from cutting-edge cybersecurity measures to incident response protocols. However, putting the framework in place is not enough – once implemented, financial institutions and fintechs must conduct regular reviews and adapt them as needed based on real-world incidents and evolving regulations.

While the initial transition may be challenging, the long-term benefits promise a more resilient financial landscape that can withstand evolving threats.

DORA also acknowledges the growing reliance on third-party IT providers and seeks to improve overall operational resilience by improving third-party relationships. Therefore, we can expect a shift in how companies manage these relationships. Financial institutions will reevaluate existing partnerships, invest in more secure third-party providers, and develop comprehensive due diligence processes and exit strategies. This could lead to a consolidation in the financial services vendor landscape as institutions prioritise partners that demonstrate DORA compliance. We may also see the emergence of specalised DORA compliance certificates for third party service providers to prove they meet the required standards.

Arnon Borensztajn, Head of Enterprise Platform & Product Enablement, PayU GPO 

Optimising revenue through data-driven payments

Data is already the cornerstone of payments revenue optimisation, and in 2025 this trend will accelerate even further, with enhanced actionable insights driving business growth. Merchants demand a clear understanding of their payment performance, including how approval rates compare to benchmarks, the effectiveness of specific payment methods, and the root causes of any fluctuations. By leveraging this data, merchants can implement strategies that maximise approval rates, enhance payment flows, and streamline customer experiences.

Next year we’ll see merchants and providers looking to understand regional preferences and market dynamics to help optimise their offerings and remain competitive in increasingly diverse environments. AI-powered tools will also provide predictive insights, helping businesses stay ahead of market trends and adopt the most effective payment methods for their customers.

However, the success of this depends heavily on data quality. High-quality, accurate data will enable businesses to optimise fraud detection, minimise false positives, and adapt to evolving regulatory demands.

The future of payments requires a data-first mindset. Businesses must prioritise data-driven analytics and remain agile in adapting to new challenges. Those that harness advanced data-driven strategies will thrive in a competitive landscape, unlocking revenue growth and ensuring resilience in a rapidly evolving financial ecosystem.

Payment innovation will unlock new opportunities in emerging markets

Payment methods will continue to expand across emerging markets, driven by both the need to accommodate younger generations with more purchasing power and growing SME economies within the region. Innovations like BNPL, instant payments and A2A payments will play a critical role in breaking down barriers to entry to other key verticals ripe for growth including travel, education and healthcare.

In regions like Latam and CEE, BNPL adoption is accelerating, offering flexible payment options that cater to consumers with limited access to traditional credit systems. Meanwhile, the development of instant payment systems and A2A transfers will reduce friction in financial transactions, ensuring seamless, real-time payments for goods and services. Further, we’re seeing newer innovations like QR code payment solutions enabling individuals and businesses to participate more fully in the global economy.

In some markets, governments and institutions are taking proactive steps to create proprietary instant payment systems, enhancing economic resilience and reducing reliance on international payment networks. As these methods gain traction, they will not only empower individuals but also catalyse growth in underserved sectors, unlocking opportunities that were previously out of reach for many. The expansion of payment methods in emerging markets is a pivotal step towards a more inclusive and connected global economy.

Simona Covaliu, Chief Risk Officer, PayU GPO

The future of AI-driven risk management will rely on good data quality  

AI has already proven to be transformational and over the next year, it is poised to reshape fraud detection and risk management in payments, driven by advancements in machine learning and data integration. AI will allow for more accurate and contextual fraud detection models, leveraging diverse data sources to identify and respond to threats more efficiently. Automated fraud detection will reduce the time and resources required to pinpoint fraudulent activities, allowing organisations to act swiftly against new and evolving methods of attack. 

Real-time dynamic risk assessments will also be critical. By integrating pools of contextual and predictive data, AI can continuously refine risk indicators, offering financial institutions the ability to anticipate and mitigate potential vulnerabilities. Additionally, AI-driven automation will extend to compliance monitoring, where advanced tools will scan regulatory changes and perform gap analyses to ensure ongoing adherence. 

Despite these advancements, this relies heavily on data quality – poor or fake data can undermine the effectiveness of AI systems, making robust data governance essential. With regulatory developments in the EU influencing how AI can be used, the pace and extent of its adoption will depend on how well organisations adapt to these new requirements.

The spotlight on regulations will shift to risk management 

Heightened requirements around digital resilience, supply chain stability, and cybersecurity will lead to an explosion in compliance obligations, substantially increasing costs for organisations. Traditional approaches to risk management will no longer suffice, and the cost to business would be insurmountable if they don’t implement robust controls by design, that minimise technical and compliance debt.  AI will play a dual role as both a solution and a regulatory focus area. In the EU, anticipated regulations will place stricter constraints on AI’s role in business decision-making and consumer protection. These changes will dictate the integration of AI-related risks into existing risk management frameworks, ensuring that AI technologies are implemented responsibly and transparently. 

ESG guidelines will further drive regulatory innovation. Companies will need to embed ESG considerations into their risk management processes, moving beyond compliance to address societal expectations. Risk scenarios tied to ESG will demand vigorous identification, assessment, and mitigation strategies, changing how organisations approach long-term planning and investment frameworks.

However, that’s not all. Global privacy regulations, increasingly aligned with EU standards, will add another layer of complexity. Companies operating internationally must develop real-time compliance systems and prioritise “compliance by design” to manage cross-border regulatory demands. Organisations that proactively adopt integrated, AI-enhanced approaches will be better positioned to navigate these shifts, ensuring resilience and competitiveness in the evolving financial landscape.

Steve Morgan, Global Banking Principal, Pegasystems

2024 saw banks initiate technology projects that leveraged generative AI (GenAI), machine learning and automation, and 2025 will be the year where banks will continue to explore that technology.

What will be different in 2025 is how GenAI will become much more externalised and touch customers. This year GenAI has, in the main, been used for internal processes. Results from testing this will lead to greater confidence in all teams – including risk and compliance teams – about applying to customer facing processes. There will still need to be rigorous testing and controls in place, but they will take the technology much further afield in their operations.

Tariffs and margin pressure

The biggest influence on how banks approach their technology investments will be falling interest rates and the potential for economic fallout if American tariffs are introduced at high levels. With more margin pressure, banks will focus their technology spending on how to reduce their costs and improve efficiency. This will lead to continued moves to the cloud and as-a-Service solutions. However, it will also see increased targeting of legacy systems due to the high cost of running and constraints on change agility. As financial services institutions race to modernise, a top priority will be this aggressive slashing of technical debt. On a macro-economic level, if high tariffs are introduced or there is further political instability, then this has the potential to impact trade, cashflows for clients and ultimately the end consumer also. Banks will focus on assisting clients to mitigate risks in terms of currency, cashflow and debt.

DORA-deadline is ticking

As always there will be regulatory changes to navigate for banks. Most prominent is the Digital Operational Resilience Act (DORA) which goes live on 16 January. Complying with this is a critical area linked to operational resilience and efficiency. There is also the progression in AI governance, both driven internally by banks as well as through external guidelines and regulations such as those laid out by the EU AI Act. Banks outside the EU may not be directly affected by these regulations, but the EU AI Act will act as a guide for how other geographies regulate AI.

Brad Hyett, CEO, phos by Ingenico

As we approach 2025, software point-of-sale (SoftPoS) technology is set to transform the payment industry. With its adoption accelerating and ability to allow merchants to accept payments on any NFC-enabled device, the technology is bringing significant changes to business operations and customer interactions. SoftPoS solutions are expected to incorporate more card schemes and Alternative Payment Methods (APMs), increasing their versatility, while integration with value-added services will further enhance their utility.

The global transaction value for SoftPoS is projected to rise substantially in 2025, driven by increased adoption from major financial institutions as they gain clarity on certification developments. The evolving regulatory environment, including the release of MPOC v1.1, may present challenges, particularly for larger organisations. However, these regulations are expected to ultimately increase merchant confidence in new payment technologies.

2025 will likely see more sophisticated bundling of SoftPoS with other business tools, creating a more comprehensive operational ecosystem for merchants. This integration will significantly boost the overall value proposition for businesses by embedding payment acceptance within existing digital channels.

This growth will be particularly impactful in emerging markets, facilitating the expansion of contactless payments without traditional hardware costs. As we enter 2025, SoftPoS stands ready to revolutionise the payment landscape, offering businesses new opportunities for growth, efficiency, and enhanced customer experiences in an increasingly digital and mobile-first world.

Pri Nagashima Boyd, VP of data, analytics and AI, Pleo

2025 will see AI-driven tools become standard for real-time spend insights, identifying inefficiencies and suggesting actionable steps to cut costs, eliminate redundancies, and optimising budgets. AI will also empower businesses to shift from reactive budgeting to proactive financial planning, including automated triggers for budget reviews or renegotiations based on market benchmarks. Due to this rising prevalence of AI, businesses will need to develop smarter data strategies. Storing and processing excessive data has both financial and environmental costs, which businesses will need to work around. In response, we’ll see businesses leveraging only the most relevant data to solve specific problems, reducing waste, and lowering server emissions.

Soren Westh-Lonning, CFO, Pleo

As we move into 2025, businesses will continue to face uncertainty, driven in part by global political uncertainty. For financial teams, this means doubling down on financial and risk planning to navigate potential surprises. With budgets shrinking and scrutiny increasing, collaboration across departments will be critical. In fact, 60% of UK businesses attribute poor spending decisions to a lack of interdepartmental communication, understanding, and alignment.

The increasing importance of data is going to heighten the importance of having the right tech stack in place. AI tools will be key in taking the heavy lifting and freeing up teams to do more strategic work but the challenge will be figuring out how to really get value out of AI without getting bogged down in the hype.

The hunt for finance talent will focus more on data competence and business acumen and collaboration to increase the impact to business. Finance teams will put greater focus on candidates with strong technological expertise alongside traditional financial skills. Upskilling current team members in data analytics and business storytelling will also be key to staying competitive.

Ben Goldin, Founder and CEO, Plumery

Banking trends to watch: AI, BaaS and neobanks

The past 12 months has seen the shine come off several dominant trends in financial technology, but will they bounce back in 2025?

Artificial intelligence (AI) – specifically generative AI (GenAI) and the wonderful things that can be done with large language models (LLMs) – has dominated headlines over the past two years, following ChatGPT’s public release in November 2022. While the hype cycle has not yet run its course, conviction in AI as the technology solution for every problem has waned. The challenges at the forefront in banking include data privacy and quality, bias in historical data, and a skills shortage.

Banks are generally laggards when it comes to adopting new technology, mainly as a result of the strict regulatory environment they operate in and their legacy technology stacks. Yet, AI solutions are being deployed successfully across different areas of banking, from fraud detection and other compliance tools to hyper-personalisation and financial advisory services.

Due to the overwhelming hype around GenAI, we are seeing growing interest and curiosity from both traditional banks and neobanks. But the digital-first neobanks and fintechs that have taken the lead in rolling out solutions, as they don’t face the same legacy tech issues as incumbents.

For example, Swedish buy now, pay later platform Klarna – which also has a banking licence – reported that 87% of its staff use its in-house developed GenAI engine, Kiki, in their daily work activities. It recently announced plans to abandon software-as-a-service giants like Salesforce and Workday, opting to build its own tailored AI systems using LLMs.

Klarna also plans to increase efficiency and cut costs by reducing the number of call centre staff. In January 2024, it released an AI assistant for customer service, which it reported was handling the equivalent workload of 700 full-time agents within a month of the launch.

Many in the financial services industry are looking to follow suit and have experimented with delegating customer support to GenAI. However, there is a growing realisation that the technology is not yet mature enough to completely take over this critical customer-facing function. Instead, they are exploring hybrid solutions, whereby GenAI helps facilitate the conversation but a person remains on hand to step in if need be.

BaaS woes

Banking-as-as-service (BaaS), which has been at the top of Gartner’s Hype Cycle since September 2022, also saw its star fade in 2024. And as market sentiment changed, development in this niche area started to slow down.

While a plethora of BaaS providers sprung up across the world over the past few years, the regulatory environment in most jurisdictions was slow to catch up with potential additional risks they could introduce into the market, including KYC and compliance, data security, third party and financial. This allowed these new players to thrive with little regulatory constraints. However, many regulators have turned their attention to the most prominent BaaS players and are monitoring them to ensure consumer protection and financial stability.

In the past 12 months, several well-known providers have either gone out of business – including Synapse and Dock Financial’s German entities – or were threatened with fines or forced to suspend new customer onboarding, such as Solaris and Modulr. The fall out in this space has fuelled caution among investors, who are much more reluctant to put money into new BaaS platforms.

Interestingly, this has created an opportunity for traditional banks to enter the BaaS market. Banks have finally realised that APIs can be monetised and deliver an additional revenue stream of revenues. An emerging trend we are seeing is traditional players launching BaaS propositions themselves, instead of relying on third-party companies.

Instead of building a BaaS offering from scratch, several banks are looking to accelerate their journey by buying an existing player and rebranding it, such as UniCredit’s acquisition of Vodeno and Aion Bank.

Neobanks fail trust test

Neobanks experienced a decline in customer satisfaction over the course of 2024, as names like Revolut, Starling and Monzo hit the headlines more often for fraud violations and poor customer support.

Many have been criticised for pushing the responsibility for compliance onto their customers. Incumbent banks, on the other hand, are seen to take more of the burden on themselves, paying out compensation to customers and protecting their brand more than protecting their revenues.

Consequently, the lack of customer care on the part of some neobanks has given traditional players an opening to step up their game and position themselves closer to the customer in the look, feel and functionality of their digital banking offering. They are seizing the opportunity to double down on their strengths: anti-money laundering compliance, fraud prevention and more complete and trustworthy customer support.

The incumbent banks’ holistic approach provides multichannel engagement, including call centres and branches, while the neobanks are digital-only. Even if customers are not actually receiving better support by the incumbent high street institutions, there is the perception that they are being heard and are able to connect.

What will happen in 2025?

Clearly, there remains a lot of hype around GenAI in the market, fuelling enthusiasm about its capabilities. Some banks are rushing ahead to fully delegate responsibility for specific jobs and tasks. But we haven’t reached the point of artificial general intelligence, where GenAI can match or exceed human cognitive abilities.

In 2025, we expect the industry to adopt a ‘meet-in-the-middle’ approach to GenAI. As the hype and frenzied activity fades away, banks will begin to identify the “killer” use cases, as well as the real value, that the technology can deliver – effectively using GenAI in the right context for the right purpose.

We predict that there will be some consolidation, recalibration and stabilisation in the market and, as a result, a much higher quality of GenAI applications across the banking sector from improving the customer experience to optimising back-office processes. Deployment will provide more valuable insights, as well as reduce the time and cost to execute different processes within the bank.

In terms of BaaS, we believe that more consolidation among the digital-first providers is likely in the coming year. In addition, traditional banks will increasingly embrace BaaS.

With neobanks still trying to reach parity with incumbents when it comes to trust and customer support, traditional players will be able to seize different opportunities to improve their market position and customer experience.

Therefore, neobanks will need to rethink their approach to customer support to remain competitive. Historically, they have eschewed call centres or other assisted interactions with customers, but this might change given customer sentiment around fraud and scams, as well as overall expectation.

The era of a dozen or more consumer-focused neobanks launching per year is over. Some may still crop up in regions that are lagging behind or in niche segments, such small and medium-sized enterprises, which have been historically underserved by traditional banks.

Fundamentally, investors are reluctant to finance neobanks. As such, even if a neobank wanted to get off the ground, it’s difficult to attract investment today and is unlikely to change in the next year or so. Once again, this gives traditional banks an opportunity to ramp up their offerings and enhance customer experience.

Gabriel Le Roux, CEO, co-founder, Primer

2025 will be the year of open and unified payments

Our research shows that eight in ten (79%) payment leaders worldwide believe that their company requires significant updates, or a complete overhaul, of their payment technology stack. This indicates a growing dissatisfaction with the status quo and a push for increased flexibility and agility to shift payments from transactional to truly transformational.

Five years ago, it was common to use one Payment Service Provider (PSP) for everything. Today, multi-PSP is a necessity for scaling across borders and ensuring payment system reliability. As a result, we’re likely to see more merchants leveraging advanced infrastructure in 2025 to turn payments into a competitive advantage.

Doubling down on redundancy

Recent payment outages at major retailers like Greggs, Sainsbury’s, McDonald’s, and Tesco have highlighted a troubling trend merchants face:  payment system failures are increasingly frequent, exposing the vulnerability of a single PSP.   Even a five-minute outage, especially during peak seasons, can be detrimental to revenue.

In response, more merchants will look to add redundancy to their payment stack in 2025. This builds operational resilience while enabling businesses to continue processing transactions smoothly, even if one processor experiences problems.

The balancing act of large PSPs

Following the shift in the payments narrative – from a cost center to a growth driver – next year will force large payment service providers (PSPs) to rethink their business models to become more open and collaborative. However, this is easier said than done, as their main revenue stream relies heavily on core processing products. The real challenge will lie in balancing openness with championing their own offerings.

The multi-decade shift in trade policy

With Trump winning the election, exporting to the US may become more challenging due to the proposed tariff increase. Merchants, therefore, will need to assess the potential impact on their businesses – should they absorb some of the costs or pass them entirely to consumers? How will this affect their competitiveness in the market? Merchants may also need to explore alternative markets to mitigate the impact of increased tariffs, but do they have appropriate payment systems in place? Trump’s proposal marks a multi-decade shift in trade policy, requiring merchants to remain agile as these changes take effect – and payments will be at the heart of this transformation.

Maximising payment success with AI

89% of payment leaders plan to invest in their payment stacks in 2025, with UK merchants planning to double down on automation and AI. These technologies will not only help merchants identify payment trends more effectively than the human eye, but also keep malicious activities and fraudsters at bay. This will enable merchants to avoid repeating the challenges faced over the last couple of years, when losses from payment fraud exceeded £11bn – a number that is growing.

Alasdair Anderson, VP of EMEA, Protegrity

2025 predictions – navigating through the challenges and opportunities ahead

As we enter 2025, the global economic landscape remains a mix of challenges and potential shifts that will shape markets and industries worldwide. From high interest rates to the evolving impact of AI, there are several key factors that will define the year ahead. While there will be friction in some areas, persistence, agility and out-of-the-box thinking will ensure a competitive edge.

Europe and the UK – slow growth amid high interest rates

The economic slowdown in the European Union (EU) and the UK will likely persist into 2025, with high interest rates continuing to weigh on consumer spending and business investment. Central banks’ inflation-control measures are dampening growth, making a swift recovery unlikely. Governments will be under pressure to boost the economy through fiscal policies, increasing social program spending and infrastructure investments. The success of these efforts will depend on how quickly businesses adjust to a more cost-conscious climate and how consumers respond to rising financial pressures. The balancing act between controlling inflation and sustaining growth will be the key to success in 2025.

Growing and new regulations like DORA

We live in a world where there is ever-growing and new regulations such as the EU Digital Operational Resilience Act (DORA), which will take effect on 17 January, reshaping cybersecurity and operational resilience in financial ecosystems. DORA will impose stricter requirements and also encourage resiliency in organisations, which will hopefully address the issues of securing insurance.

The positive consequence of this growing regulatory landscape is a shift toward outcome-based compliance, as current regulations are seen to focus on ticking boxes. This will ultimately lead to enhanced data security within sectors, and mitigated risk of major consequences from continuously scaling cyber-attacks. In 2025 organisations must be proactive in compliance, treating regulatory requirements as a baseline and building upon them to enhance customer experience and trust.

We will also see more regulations coming out that haven’t yet been predicted. 

Companies should treat these regulations as the minimum requirement that guides the usage of technology and look to build on these requirements. Maximising cybersecurity investments isn’t just about protection—it’s about creating a positive, trust-driven experience for customers in the long term. Security should go beyond compliance, ensuring that every interaction leaves customers feeling safe and confident. In 2025, the businesses that excel will be the ones that seamlessly blend robust security with exceptional user experiences.

The breakout Year for AI

Finally, this year will be the breakout year for Artificial Intelligence (AI). In 2024 AI had to navigate the “trough of disillusionment” as early excitement met the reality of limitations. However, as organisations rethink their strategies, this phase of setbacks will unlock new opportunities. In 2025 AI is set to shift into the “plateau of productivity”: with refined AI models, scaled projects, and practical, high-impact applications. This will be a considerable shift in comparison to the toe-dipping and experimentation we’ve seen in 2024.

Against a backdrop of financial uncertainty and regulations adding further potential costs, organisations will be seeking cost-effective, efficient methods to remain compliant and reach their goals. This is likely to be a main area of opportunity for the AI industry, due to its practical applications of automating tasks, aiding teams in quickly analysing vast sets of data, and helping companies make smarter decisions without hiring more people. In 2025 refined, practical uses such as this will give organisations a major edge. This is especially true in sectors such as healthcare, finance, and manufacturing, where AI-driven automation and analytics are poised to transform operations.

2025 – a year of transition

In 2025 the global economy faces a mix of challenges and opportunities. Europe and the UK will see a slow recovery, hampered by high interest rates and weak demand. The U.S. may get a short-term boost under the Trump presidency, but rising debt and global trade tensions remain major risks.

Where AI is concerned, 2025 is a turning point and by the end of the decade, AI is set to become a powerhouse for real productivity gains. With challenge comes opportunity and by focusing on efficiency, smart investments, and embracing new technologies, businesses can expect to grow. Now is the time to innovate, adapt, and position for future success.

Mario Vargas, VP of Global Technology Alliances, Protegrity

As markets worldwide are undergoing a major transition due to macroeconomic developments that have unfolded over the past year, we expect 2025 to be a year where more board members seek ways to more accurately predict the market and increase profit margins. As such they are more likely to embrace AI technologies to unleash the value of their data by analysing customer touchpoints, determining customer behaviour and improving decision-making to provide an overall better service and customer experience.

Data security is important and should be a priority for organisations as unfortunately, the security of the past will not carry through to the security of the future, and certainly not in the age of AI. While we expect companies to increase AI adoption, they will be less likely to change their data security profiles to counter the risks associated with these technologies. Intrinsically we anticipate seeing more headline breaches in 2025 impacting organisations’ reputations and eroding customer trust as threat actors adapt their tools and implement new approaches to breach the existing security profiles of organisations.

Further, as governments introduce new regulations to improve data privacy and keep customer information secure, we anticipate seeing several more organisations be penalised with fines due to noncompliance and, at the same time, lose customer trust.

In the search for improved predictability and profitability in 2025, boards may put their organisations at risk of breaches and regulation noncompliance if they don’t enforce measures to safeguard their data. This means implementing robust security frameworks that allow them to leverage AI and maintain stringent security, which is also key to building customer trust and protecting their reputations.

Dharmesh Ghedia, Technical Director, Qodea

In 2025, the banking experience for customers is going to undergo further transformation. Rather than the limited, one-size-fits-all digital interactions of the past, banks will offer customers hyper-personalised experiences to retain customers from the threat of challenger brands. By leaning on AI, banks will be able to tailor services based on an individual’s banking habits and preferences. For instance, AI will allow banks to recognise specific budgeting behaviours or recurring activities, offering tailored advice and guidance. Moreover, banks will be able to use AI agents to alert and provide customers with information to reduce fraud or make them aware of new services and features.

Hyper-personalisation in banking opens up a great deal of new possibilities. Customers will be able to have greater control over the services they receive, which feel not only be personalised but also protective. However, striking the balance between automation and trust will be key. Banks will need to help customers feel confident in interacting with AI agents while still giving them the option to speak to a representative. In 2025, the banks that leverage AI to empower customers without completely taking away human interaction will offer the best experience.

Joey Glazer, Director of Sales – SME, Quadient

2025 will be the year open banking redefines payments

In 2025, AP teams will increasingly rely on open banking to meet the growing demand for faster, more accurate, and secure payments. AI-powered tools within open banking will give AP teams a decisive advantage, whether through real-time transaction verification or advanced analytics that detect suspicious patterns early. Together, AI and open banking will allow AP professionals to operate with new levels of efficiency, freeing up time for higher-value tasks such as managing supplier relationships. Ultimately, AP teams that are reluctant to fully embrace open banking and AI will continue to find it challenging to identify fraud patterns or eliminate data entry mistakes. This in turn will see them fall behind competitors who can take advantage of faster, more accurate, and secure payment processes.

Sarah-Jayne Martin, Director of Financial Automation, Quadient

More finance teams will go all-in on blockchain

In 2025 more finance teams will turn to blockchain for accurate financial transaction logging, reporting and analysis. So far, blockchain adoption in traditional businesses has been limited due to its complexity and a lack of specialised knowledge. However, there is a growing awareness of its advantages. In part, this is due to an acceptance that the benefits of blockchain extend beyond cryptocurrency and outweigh the perceived complexities.

In practice, the increased level of transparency can play a pivotal role for finance teams. For example, blockchain’s accurate record keeping can transform areas like credit risk analysis by enabling instant access to transaction histories and credit data. On top of this, blockchain’s built-in chronological audit trails streamline compliance reporting and ensure regulatory alignment. Ultimately, embracing blockchain will help finance teams mitigate risk and improve financial precision, which will help drive wider growth in a competitive landscape.”

Accounting will become a dying profession if education doesn’t change

In 2025, the already declining number of students studying finance and accounting will see a significant drop. Coupled with an ageing population in finance, we are going to see a serious skills gaps. Accounting and finance roles simply aren’t alluring anymore. These roles were previously considered a “safe” profession, but graduates simply don’t value this in employment anymore. Why would a graduate want to then spend another three more years doing exams, when their peers are getting stuck into the working world?

The whole industry, from educators to employers, need to reassess what will attract graduates to pursue a finance profession. For example, are three years of additional study really necessary, or could this be condensed so that new recruits can spend more time on developing their practical skills? Likewise, younger generations now demand the latest technology and tools when they enter the workplace. Employers need to ensure they provide automation solutions that reduce the manual burden on graduates, so they are less likely to feel burnout. Without this understand of what graduates want and investment in technology, employers will see a sharp decline in applications in 2025.

2025 will be the year of instant cash flow

In 2025, real-time payments will become the expected norm in business transactions, as the corporate world takes a leaf out of the consumer banking playbook. Companies, no longer content with waiting days for funds to clear, are demanding instant transfers to enhance cash flow across the credit-to-cash cycle. The rise of digital invoicing, automation, and advancements in payment infrastructure mean that delays in the payment process will increasingly be seen as an avoidable friction.

We’ll see financial leaders prioritising these systems to gain a competitive edge by freeing up working capital faster. Reduced payment delays will also help to build stronger vendor relationships, smoother operations, and a more agile response to market changes. This shift, supported by the continued evolution of Open Banking and real-time payment networks, promises a more transparent, efficient financial landscape where immediate payments aren’t a luxury but a baseline expectation. Businesses that use these capabilities will stand to significantly improve liquidity, resilience, and overall financial health, driving a new standard for the industry.

Andrew Stevens, Industry Principal, Banking and Financial Services, Quadient

Businesses will engage the unengaged by dazzling customers with rich communications

In a bid to reach customers who are less impressed by relatively simple text messages, banks will use more eye-catching ways to share critical financial information. Information on mortgages or interest rate changes will more resemble iMessage or WhatsApp messages, as banks and other FS organisations use advanced smartphone push notifications and rich communication services to create eye-catching and engaging communications. The new format will pack high-res imagery and interactive features into easy-to-read messages that give consumers more control and allow them to take the next step on their customer journeys.

Using these channels effectively will be a balancing act. While grabbing a customer’s attention can yield immediate benefits, organisations need to ensure that the entire customer journey is as engaging and satisfying as the beginning. Sustaining engagement over the long term will hinge on delivering the right message, through the correct channel, at the right time – ensuring that every interaction feels like part of an ongoing conversation.

Banks will shift from “segmentation” to individual-focused approaches to selling

In 2025, financial institutions will need to move beyond the traditional sales-driven approach, where identical products are marketed to broad customer groups. The product-first philosophy of offering a wedding loan to a customer in their 20s or mortgage plans to someone in their 30s without considering individual needs or circumstances is no longer viable. As customer expectations evolve, banks must prioritise long-term relationships over short-term wins, focusing on giving meaningful advice to consumers instead of chasing their next sale.

To achieve this, financial institutions should rethink their segmentation strategies and move away from ‘one-size-fits-all’ product offerings. Instead, they should use data to deeply understand their customers’ financial needs and pain points. By using advanced data analytics, banks can provide more relevant, personalised insights. Businesses that guide people to services right for them (and that do not necessarily lead to a lucrative short-term sale) will be the true winners in this new era of personalised communications.

Simon Yaxley, Accounts Receivable Solutions Consultant, Quadient

AR teams will become a driving force in business decision making

In 2025, businesses facing economic pressures surrounding taxes, inflation and interest rates will increasingly rely on finance teams for strategic insight. We will see AR teams elevated from a back-end collection function to a strategic advisory role, empowering finance to guide decision-making and contribute directly to business resilience and growth. As a result, AR teams will be expected to use predictive analytics and AI to analyse payment data with greater accuracy. This will help forecasting cash inflows, identifying cash at risk, and suggesting process improvements.

Guy Harrison, CEO, Quantios

While 83% of firms agree that digital transformation is vital for staying competitive, many are still held back by outdated processes, immediate issues and infrastructure challenges.

These barriers often lead to a cycle of reactive “fire-fighting,” where immediate operational issues overshadow long-term strategic goals. As 2025 brings even tougher market conditions, underinvestment in technology risks exacerbating bottlenecks and tightening budgets further, leading to outdated systems staying in place.

The firms that’ll come out on top in 2025 will be those that shift their focus from short-term fixes to creating scalable, adaptable digital systems. Investments in cloud-based solutions and Software-as-a-Service (SaaS) platforms will prove to be particularly impactful, as they offer flexibility, scalability and long-term cost efficiency for those looking to remain competitive.

Alex Bradford, CEO, Rain

Fintech and workplace dynamics
Fintech and workplace dynamics will become increasingly intertwined as employees continue to prioritise companies that offer innovative financial solutions. Companies that adopt innovative financial solutions, such as comprehensive financial planning tools, earned wage access (EWA) platforms, and personalised budgeting resources, will position themselves as forward-thinking employers. By increasing their commitment to improving the financial well-being of their employees, companies can expect to attract and retain top-tier professionals who prioritise holistic workplace benefits.

Legislative discussions

Legislative discussions are increasingly aligning with the growing consumer demand for earned wage access (EWA) with new regulatory frameworks and precedents emerging and shaping how these solutions will be classified and utilised in 2025. Lawmakers are expected to address critical issues in the new year, including the proper categorisation of EWA, the establishment of transparency requirements for fees, and the protection of consumer rights. As seen with California’s recent EWA legislative changes, these new laws will provide clarity for employers and EWA providers, encouraging broader understanding, and adoption, of employee-sponsored models. As these models become more widespread, they will redefine the standard for financial wellness benefits in the workplace, promoting responsible usage and ensuring that employees and employers can maximise the advantages of these innovative tools.

Fintechs will become integral to banking providers

In 2025, fintech companies can expect to see their influence increase within the wider finance industry as they become essential partners for banking providers. Traditional banks have seen the success of companies embracing the fintech space, like JPMorgan’s partnership with Chase, and the impact it has had on their ability to improve consumer experiences and increase consumer loyalty. Banks are interested in utilising cutting-edge technology to offer solutions like seamless digital payments, personalised financial planning tools, and real-time fraud detection – and fintech companies can expect an influx of interest for these services. As the number of tech-savvy consumers increases, it’ll be increasingly necessary for banks to innovate. Fintech companies that distinguish themselves as innovative will see the most growth and success within this space.

Tom Hewson, CEO, RedCompass Labs

The rate of change in payments has never been this fast and will never be this slow again. 2025 will be no different.

Next year, AI models that can draw from formerly untapped human expertise will arrive. Payments knowledge that lives behind firewalls (regulatory and bank documentation) and within payment experts’ heads will be used to train large language models. With the help of AI assistants, payment experts will prepare, review, and deliver documentation for payments modernisation projects in half the time and at half the cost. 

Multi-agent AI models tuned for accuracy, not speed, will work 24/7. Free from the mundanity of typing, analysts can focus on design and review. The productivity and time benefits will be enormous – but they will be enjoyed only by those who have Applied AI, trained and tuned specifically for payment modernisation, led and guaranteed by payment experts.

As a bank, if you don’t embrace AI in 2025, you will face bigger costs and slower change than those you are competing with. But if you leverage the billions invested in AI, use the tools available, and gather industry knowledge, you have a chance to keep up with the rate of change.

Silvija Krupena, Director of Financial Intelligence Unit, RedCompass Labs

This year marked a turning point in the global discussion around fraud prevention. The UK Payment System Regulator’s landmark move to mandate reimbursements for APP fraud up to £85,000 represents a huge step forward in protecting consumers from financial losses. However, it will do little to solve the problem.

Splitting consumer losses between banks does not prevent fraud. We need to stop it at the source. Given that 76% of fraud originates online, particularly on Meta-owned platforms like Facebook and Instagram, social media firms should be held accountable. Whether through penalties, financial contributions, or awareness campaigns, social media must take responsibility for the role they play in enabling fraud. This approach demands the commitment of every stakeholder in the ecosystem which includes banks and social media platforms, but also technology companies, regulators, law enforcement, and consumers. Unfortunately, we’re still far from this kind of collaboration in the UK.

As we look to 2025, Australia’s approach may serve as a better model. Its proposed unified scam-prevention network shows that an integrated, ecosystem-wide effort is not only possible, it’s essential. It’s time to move from subsidising criminals to proactively preventing fraud through collaboration, technology, and public awareness.

Pratiksha Pathak, Head of Payments Services, RedCompass Labs

2024 has been a transformational year for instant payments. Europe’s banks have been racing to prepare for the SEPA Instant Payments Regulation, which entered into force in April. In the U.S., RTP and FedNow set new transaction volume records. And in Canada, banks were given a clear path toward the launch of the Real-time Rail which is due to launch in 2026.

The year ahead promises progress, but banks will face even greater challenges with major deadlines for SEPA Instant and ISO 20022. 

To get ready, banks must overhaul core payment systems, upgrade client-facing channels, modernise fraud detection tools, and enhance middleware. They must do so while maintaining system uptime and ensuring seamless, real-time data synchronisation across multiple platforms. Scalability, interoperability, and security will be critical benchmarks for success, as will managing fraud. It’s a massive challenge.

But the rewards are transformative. UPI in India and Pix in Brazil boast 300 million and over 160 million users, respectively. These systems have shown to boost financial inclusion, strengthen supply chains, and release billions currently tied up in inefficient payment networks.

Leo Labeis, CEO, REGnosys

2025 will be a year of continued reporting challenges and subsequent growth of the RegTech industry – predicted to be worth $85bn by 2032 – as financial firms look to technology to stay ahead of regulatory changes.

This year saw the implementation of version 3.2 of the CFTC Rewrite, EMIR Refit (both the European and UK versions), JSFA, MAS and ASIC. This has come with challenges from an implementation perspective, with the EU Refit being particularly difficult for market participants and trade repositories. 

However, these changes are broadly welcome as they will accelerate the pace of data harmonisation across jurisdictions. Next year will see a continuation of these reforms with Canada and Hong Kong scheduled in the next 12 months. Eyes are also on the U.S. with the new administration’s potential to adopt a new regulatory agenda, and Europe with several consultations regarding MiFID and SFTR.

Shawn Du, Founder and CEO, Revenir

 The spirit of collaboration in the financial services ecosystem has enabled it to evolve fast over the last decade, powered by both the latest tech advancements and driven by a keen consumer appetite for convenient, self-serve financial services apps.

Next year we’ll get closer to seeing how quantum computing can be harnessed to more accurately predict financial crises and improve trading outcomes via algorithmic trading. We’ll also see more SaaS platforms offering global and cross-border payments and through the use of AI, we’ll see how advanced analytics will help financial services providers understand on a more granular level how people are using, and how they want to use, products, allowing banks to develop exciting new products and services accordingly.

With the rise of global ecommerce, particularly in developing markets, banks must be ready with services that reduce the typical merchant and consumer pain points that come with global transactions and trading.

Ian Bell, head of pensions, RSM UK

2025 may well be the year that public awareness of pensions goes up a notch, as pensions saving becomes more visible with the launch of the first pensions dashboards. It’s hoped pensions dashboards will be a game changer for pensions, improving pensions literacy and encouraging more people to save greater amounts at an earlier age, something we know must happen to avoid the current prospect of poverty at retirement for many.

As more people become aware of what pension savings they have, how they are performing and what income they might expect at retirement, public pressure on the government to do more to support pensions savings will likely increase. People are also more likely to actively seek advice on how best to invest to get the most out of their retirement savings and how they can best use their pensions pot at retirement to give them an income for life.

It remains to be seen what the Pension Schemes Bill will deliver, but it’s hoped savers will get better value for money and will receive better service and more support from their pension providers. This should lead to bigger pensions pots and better investment choices in future.

Digital technology and AI will come to the fore for pensions providers, streamlining processes and reducing administrative tasks, freeing up employees to focus on other tasks. AI may support consumers in making decisions about what to do with their pension pots, but at the moment this is no substitute for qualified human financial advice, and the two will work together for the foreseeable future.

We are likely to see the demise of the ‘finfluencer’, as the FCA cracks down on those giving financial advice on social media platforms without any qualifications, or recommending dubious high-risk investments.

Unfortunately, with the increased use of digital tools and customer data comes increased risk of cyber threats and scams. Scammers could make use of government initiatives such as pensions dashboards as an opportunity to trick consumers out of their pensions savings. While consumers are continuing to wise up to the types of tricks scammers use and are much more sceptical of unsolicited offers to improve returns by transferring their pensions savings, there is still work to be done to raise awareness of this ever-evolving threat.

We will also see the acceleration of many DB (defined benefit) schemes derisking through buy in and buy out products with insurers. This is the result of better scheme funding and more players coming into the market, increasing capacity and improving pricing. It will take many years for all DB schemes to reach this stage, but we will see the market accelerate on this front next year. We will also see the interest in superfunds increase, with more players entering the market now that the Clara superfund has demonstrated there is demand for a further derisking option.

Hugh Fairclough, financial services audit partner, RSM UK 

As the FCA orders motor finance companies to compensate consumers affected by discretionary commission arrangements, this raises questions around the transparency of commission arrangements more widely. We may therefore see the FCA examining commission arrangements on other financial products in 2025, in line with 2021 rule changes, which required major creditors to disclose the nature of their commissions.

The UK market for non-bank lending, where finance is embedded in the sale of a product, is likely to grow in line with the US market, and as we see more of this type of financing here in the UK, questions around transparency for consumers will need to be addressed.

Having seen some banks fined by the FCA last year for failings in their financial crime prevention controls, we are likely to see the FCA stepping up scrutiny of financial services and payment providers’ anti-fraud and anti-money laundering measures to ensure consumers are adequately protected. This is already evident from the letter the FCA sent to CEOs of retail banks in October, which stated ‘Managing financial crime risks will be especially important and challenging for banks in the context of their offerings of, or participations in, ‘banking as a service’ or ‘embedded finance’.

Greater regulatory scrutiny of social media

We are also likely to see greater scrutiny of social media ‘finfluencers’ from the FCA in 2025, as it seeks to put a halt to those offering unqualified advice and spurious claims regarding risky investments and scams, including crypto investments.

As the value of crypto surges following the Trump election win, we will continue to see increasing institutional interest in cryptocurrencies in the UK, both as an investment opportunity and as a viable form of payment. We may start to see an increase in retailers and service providers accepting payment for goods in Bitcoin, and possibly some other major cryptocurrencies too, such as Ethereum. Expect to see a rapid increase in FCA authorisations for blockchain and digital asset-based infrastructure businesses, as this technology starts to replace and enhance traditional financial services infrastructure. This new technology will vastly increase processing speeds and efficiency.

Enhancements in open banking will allow third-party companies to use and process a huge array of accumulated data using machine-learning technologies. Some banks and payment service providers already gather data on spending habits from customers, but we should expect to see this move to the next level, with the introduction of predictive capabilities to promote tailored financial services solutions based on saving and spending habits of consumers. We should also see more financial education and wellbeing recommendations built from this same data, allowing customers to budget and see the consequences of their spending patterns.

AI is growing exponentially

We will certainly see greater use of AI in financial services throughout 2025 and beyond. AI is transforming how institutions manage risk, intercept fraud or crimes, personalise customer experiences, improve efficiencies across their operations, make investment decisions, and many more uses which are still being developed. Rather than implementing a single, overarching regulatory framework for AI, the UK Government white paper on AI regulation proposes that existing sectoral regulators (such as those in finance) take the lead in applying a principals-based approach within their respective domains.

The industry will face challenges in its AI adoption including, AI biases, high development costs, cyber security, and compliance issues. AI isn’t yet a substitute for a qualified human financial adviser though, and clients with complex financial needs will still need a human advisor for the foreseeable future, particularly when it comes to servicing vulnerable customers.

M&A activity to ramp up

Private equity investors with significant capital view wealth management, insurance, specialised lending, and fintech sectors as attractive due to resilient markets and scalability through consolidation and operational improvements. We expect to see further consolidation by large trade acquirers and PE investors to strengthen their portfolios and capitalise on the opportunities created by technology and regulatory changes.

Deal activity will continue to pick up, driven by greater political certainty in the UK and US, anticipated lower interest rates (albeit slower than initially predicted) and narrowing price expectation gaps between buyers and sellers. Additionally, there is a need for PE to return capital to investors, with a backlog of portfolio companies that are overdue their disposal. With limited room for banks to grow their lending revenues as we move into a declining rates environment, we are likely to see more private credit lenders funding deals.

Andrew Burman, Principal of Tax Technology, Ryan

As we approach the end of 2024, it’s the perfect time to reflect on the impact AI, particularly generative AI, has already had on tax and finance functions, and how swiftly people’s attitudes towards it have evolved. There has been a surge in adoption by accounting and tax teams, and we have seen many change their perspective on AI from threat to opportunity. From smaller businesses using public models to ask basic questions and expect standard answers to help with basic research, to large companies, consulting firms, and software companies investing heavily in their own private AI models to glean simple yet powerful insights, we are seeing many organisations start to use AI to some extent.

As the tax world becomes more real-time and complex, AI will become increasingly valuable in helping track data and performance, identify potential areas for investigation, and suggest opportunities throughout the year to optimise tax decisions, which a human simply would not have the capacity to identify. However, humans will remain in the loop for some time, contributing to the changing perspective of AI as an opportunity for people to “supercharge” their impact, rather than a threat to jobs. Any concerns we are seeing are probably less about the technology itself and more about the confidence tax professionals have in AI’s outputs, concerns over bias, the security of data, and, of course, cost. We are also seeing interest in understanding the basics – what is AI, how can it work for me, and what are others doing?

When companies invest early and prudently in AI, they have a better chance of maximising the benefits and learning from different use cases. Over time, we will be able to evolve and create increasingly relevant, accurate, and trustworthy use cases as we embed AI more deeply into our technologies and ways of working. As it interacts with us and becomes “part of the team,” this evolution will not happen in one step. Rather, we are seeing clients try a variety of ways of using AI in their work. As always with technology, its capabilities are rapidly evolving, and the potential is significant. However, it’s important for companies to first understand which use cases create the most value for them and the most cost-effective ways to capture that value before jumping “headfirst” into using these tools.

Steve Round, co-founder, SaaScada

Multi-Generational banking will support families and bolster banks’ balance sheets 

Multigenerational households are on the rise in the UK, and next year banks will rush to capitalise on this growing market and reap the rewards of a rare win-win situation. Multigenerational banking offers a huge opportunity for banks to retain, and expand, their existing customer base in a more cost-effective way than traditional, costly new business acquisition.

By lending to younger generations while taking care of savings for the older generations, banks can strike the balance between their growth and profitability – growing balance sheets and keeping net interest margins healthy with a single product. However, to do this effectively, banks must have access to real-time, accurate customer data so they can offer hyper-personalised services that meet the complex needs of a multigenerational customer base.

Banks will finally begin to understand that ESG isn’t a department, but a way of doing business

In the vast majority of organisations, ESG exists in a vacuum, as a separate team or in the form of CSR initiatives. In 2025, as the industry tries to tackle rampant climate breakdown, banks will start asking themselves: why shouldn’t every product have an ESG element baked in? Even if it comes at the “cost” of a fraction of a percentage point of reduced interest on a banking product to incentivise customers, the benefits of these products will far outweigh their costs.

What’s more, banks don’t need to try to do everything environmentally-friendly all at once. Sometimes grey – making a small move in the right direction – is better than green, especially when perfection is a barrier to progress. Banks can no longer afford to bury their heads in the sand when it comes to values-driven banking. We need to transform mindsets across the industry to support any green innovation. ESG-friendly products aren’t all or nothing, and the media – as well as other banks – must support efforts to drive green banking products forward, even if they don’t cover every base at the same time.

Nelson Wootton, CEO and Co-Founder: SaaScada

DORA will push banks to (finally) focus on speed-to-report

As ever more stringent regulatory and reporting requirements push banks to the edge, DORA will be the catalyst banks need to modernise their core systems and overhaul their outdated reporting processes. Long gone are the six-week reporting windows banks are used to, with 24 hour reporting the new norm.

One crucial aspect of DORA for banks is the need to report on 3rd party risk to ensure resilience. Ensuring compliance will be a time-consuming process as banks must vet every technology vendor that plays a part in delivering their banking services, to ensure that their infrastructure remains robust – and fully compliant.

In this new regulatory landscape, those banks – and other financial entities – who don’t move with the times will be buried under increasingly demanding regulations. So, while compliance may hit short-term profits, it is vital for banks to secure their long-term viability. What’s more, while instant reporting may pose financial institutions an additional burden in the short term, the ability to access real-time insights on banking activity also gives banks the tools they need to make more informed decisions and create personalised offerings to secure an increased share of their customers’ wallet.

Cloud banking will breach the final taboo by making ‘Core Banking as a Service’ a reality 

In 2025, the way core banking systems are delivered and consumed is going to change dramatically. Soon, you will be able to spin and swap core banking just as you would your CRM – something that would have been unthinkable 10 years ago, given the critical role core banking plays in the finance world. The move to ‘as a service’ core banking consumption models will signal a major watershed moment for cloud banking – offering banks and fintechs a much more flexible, cost effective and data-driven core to build solutions on.

Core banking systems are the beating heat of finance. Core banking infrastructure enables all the back-end magic that helps banks to process transactions, providing the system of record that ensures that books are balanced, reports are accurate, and the ledger is healthy. But there’s no margin for error in the core. This has made it difficult for core banking to be delivered ‘as a service’ as so many other areas of businesses today are. But we are finally approaching the tipping point. By the end of 2025, early adopters will gain a significant lead on the competition as they move to a “Core Banking as a Service” model.

The move to a CBaaS model will be a game-changer and unlock huge opportunities for fintechs and challenger banks looking to disrupt the established order. CBaaS gives organisations a self-service way to rapidly build best-in-class banking products, while de-risking the implementation process, and using real-time data to reduce compliance risk and ensure transparency and confidence. All of this combines to create flexible, highly adaptable FS organisations who can meet customer needs as they arise and carve out their competitive niche.

Dan Barta, Principal Industry Consultant for Enterprise Fraud and Risk Strategy, SAS

Generative AI is both a curse and a blessing, used by both the fraudster and the fraud fighter. As fraudsters use GenAI to create voice and video deepfakes that are increasingly difficult to detect, liveness tests will become more commonplace as part of banks’ multifactor digital identity authentication processes. This technology assesses a biometric sample to distinguish a live person from a potential fake representation, such as from a photo, video or mask. While forms of liveness detection have existed for decades, 2025 will see fraud fighters embrace next-gen liveness testing among the latest anti-fraud technology trends.

Stu Bradley, Senior Vice President of Risk, Fraud and Compliance Solutions, SAS

Businesses have long run on siloed systems, each serving a different function or customer segment. IT teams are buckling under the weight of cumbersome integrations, unable to provide the agility their enterprises need. A great IT rationalisation is on the horizon, where business leaders will use the cloud to simplify their IT infrastructures and vendor relationships, gain critical speed and cut costs. Those who modernise on an AI platform that drives multiple functions will derive the greatest value. They can achieve integrated, democratised data and decision-making that spans the customer life cycle and the enterprise at large.

Thomas French, Senior Financial Industry Consultant for Fraud, SAS

The Digital Industrial Age of Fraud has dawned, fuelled by a perfect storm of social, economic and technological factors that have made fraud more common – and easier to commit – than ever. In one recent survey, 42% of Zoomers (Gen Z) admitted to disputing legitimate transactions. At the same time, fraud as a service has come to the fore, buoyed by the prevalence of inexpensive, readily accessible GenAI tools to automate phishing attacks and other digital schemes. The barrier to entry to criminal activity has never been lower. Banking leaders must evolve their thinking and adapt quickly to meet consumers’ expectations for fraud protection – the sooner the better.

Stephen Greer, Banking Industry Consultant, SAS

Banks’ interest and investment in ESG initiatives will wane as they struggle to show concrete value. Declining investor enthusiasm and ‘greenwashing’ concerns will also diminish its relevance in financial markets. Without clear financial benefits, banks will view ESG as a cost burden rather than a revenue driver, and it will be primarily regarded as a reputational safeguard, not a strategic priority for growth – unless and until it’s mandated by regulation or demanded by consumers.

Ian Holmes, Director and Global Lead for Enterprise Fraud Solutions, SAS

Industry struggles to balance demand for AI’s power with the energy it requires to run
“As industry clamours for AI to drive greater speed, automation and productivity, AI demands GPUs to satisfy the higher levels of processing. Banks and other businesses face the paradox of consuming more energy while facing pressure to enhance their own environmental sustainability and promote ESG measures. The sustainability-related disclosures mandated by IFRS S1 and S2 will only increase scrutiny of energy consumption as a major contributor to global warming.

Quantum computing will likely be the next big demand on resources. But without the emergence of a sustainable source of energy to power all that computing, will the industry be forced to forgo innovation to meet environmental restrictions and maintain consumer confidence?

Alex Kwiatkowski, Director of Global Financial Services, SAS

We will see an international regulatory divergence on how to handle AI in financial services. I expect Europe (and developed Asia) to take a stringent approach, whereas the US will likely be looser.

Stas Melnikov, Senior Director of Quantitative Research and Risk Data Solutions, SAS

In 2025, the AI revolution will drive unprecedented productivity gains but will amplify disparities across sectors and countries. US-led advances in AI adoption will widen economic gaps, favoring industries and nations that rapidly operationalise these technologies. Companies unable to maintain positive cash flows or secure robust funding will be at heightened risk, particularly as inflationary pressures from green energy costs and shifting trade policies strain financial resilience. Keeping a close watch on corporate and sovereign exposures will be crucial, as this bifurcation will create both high-reward opportunities and severe risks for those unprepared to adapt.

Julie Muckleroy, Global Banking Strategic Advisor, SAS

Big data has the potential to become the next big oil – or the next big debacle – for global banking. The explosive growth of data, driven ever higher by accelerating AI implementations, presents both opportunities and challenges. Whether their vast stores of structured and unstructured data become an asset or a liability depends largely on banks’ ability to effectively evolve and implement their data framework and governance processes. Working toward deployment of a unified decisioning platform can help banks dismantle data silos and gain cross-functional insights that drive strategy and transformation.

Adam Neiberg, Senior Product Marketing Manager, SAS

Basel III Endgame will not premiere in 2025. In fact, Basel III Endgame might not even make it to the big screen. Out of a fear of sending economies into a recession, a different version may be planned, specifically looking at what risks (credit risk, market risk, operational risk and financial derivative risk) truly need standardisation.

Cornelia Reitinger, Head of Advertising Business Development, SAS

In 2025, consumer banks will make a significant move into retail media, following models set by Chase, Revolut and PayPal. By incorporating personalised third-party offers using their high-quality, first-party data, financial firms will be able to offer tailored promotions that blend with in-house offers and services. This will not only deepen customer engagement but also create new revenue streams and position banks as important players in the evolving retail media landscape.

Terisa Roberts, Global Lead for Risk Modelling and Decisioning, SAS

AI’s overhyped reputation as a silver bullet to automate any task will come down to earth as banks start to see where AI can and cannot enhance operations. In particular, financial firms, with appropriate human-in-the-loop oversight, will establish AI as an indispensable risk management tool. They’ll also put greater focus on implementing effective AI governance frameworks as AI pilots move to production.

Further, with a skyrocketing number of models under development and in production, model risk management will come into sharper focus. Financial services leaders are seeing convergence between data governance, model development and deployment, and model governance – and with multiple touch points along this value chain, the lines between model governance and the model life cycle are blurring. Firms will seek ways to improve efficiency and automation in model validation, model documentation and model monitoring.

Martim Rocha, Global Head of Risk Banking Solutions, SAS

Market volatility is here to stay in 2025. Banks will respond with continued risk management investment, taking advantage of cloud and AI advances or simply modernising their current risk systems. Asset and liability management capabilities will be a particular focus given ongoing interest rate risk and liquidity risk. Faster-evolving conditions require more timely risk analysis to quickly anticipate impacts and correlations between risk types and financial measures. They also demand greater integration capabilities to achieve a more holistic view of risks across the balance sheet.

Naeem Siddiqi, Senior Risk Advisor, SAS

Watch for robot assistants to begin replacing branch staff and customer service desks. Less sophisticated versions of these have been used by Japanese retailers for many years now, answering simple queries like ‘where can I find No. 3 screwdrivers?’ The AI-driven smarter assistants used in banking will be able to converse with customers much like chatbots, and they’ll provide better guidance than an ATM. This could prove a boon to banks and their customers alike, but these advances will necessitate a higher level of governance and control at financial institutions.

David Stewart, Director of Financial Crimes and Compliance, SAS

Anti-money laundering practitioners will cautiously evolve their responsible innovation practices due to lack of regulatory clarity on effectiveness. Many innovative firms will apply machine learning methods to tune and optimise incumbent monitoring strategies rather than incur the model governance overhead of pure AI-based detection strategies.

JB Orecchia, co-founder and CEO, SavvyMoney

There has been a lot of buzz around AI in the last couple of years and for good reason. It is going to vastly improve not only the consumer experience but has numerous valuable applications for the financial service industry. With that said, it is very early in its development cycle. Even though some form of AI has been implemented across nearly all business sectors, it’s important to keep in mind that these tools need to be tested and validated for consumer consumption and advice. That doesn’t mean they can’t be useful, but that does mean they should be leveraged carefully and intentionally as long as precautions are taken.

Because these tools will have an impact on how financial advice is delivered to the end consumer, you have to be extra careful you get the advice and messaging right. By processing vast amounts of historical information, AI can generate more nuanced recommendations, simplifying the advisory process. As the tech is utilised more extensively, its predictive capabilities will likely improve, benefiting both consumers and financial institutions. The AI revolution in finance is just beginning, it will not only transform financial advice, but how financial institutions run their business.

Dana Lunberry, Head of Data Strategy, SBS

Data analytics, fuelled by advanced AI, will grow as a core executive priority for banks and financial institutions.

Although banks have ample data, they have historically lacked the systems and processes to leverage it effectively. However, recent technological advancements have changed this landscape. In the coming year, we’ll see financial organisations investing more heavily in modernising their data infrastructure.

For many, this will include enhancing data management capabilities so that AI-driven tools, such as generative AI and machine learning models, can effectively personalise customer experiences, optimise risk management, and automate compliance—enabling a shift from reactive data handling to proactive, predictive decision-making. AI-powered data warehouses and real-time analytics platforms now allow institutions to derive deep customer insights rapidly, scaling and adapting services at speeds unimaginable a decade ago. This evolution will enable banks to transform decades of legacy information and new data streams into innovative products, services, and experiences, creating a significant competitive advantage.

Robert Kraal, co-founder, Silverflow

The payments industry is standing at a pivotal crossroads. In 2024, the European Payments Acquiring market processed over $6trn in transaction value—a staggering 13% year-on-year growth. Yet this remarkable expansion reveals a stark divide: while newer players are thriving with modern, cloud-native systems, many traditional providers are falling behind, shackled by outdated, legacy infrastructures.

These legacy systems, once adequate for domestic, cash-and-card transactions, now act as barriers in a world where global, real-time, and digital-first transactions are the norm. Merchants and consumers demand faster approvals, seamless cross-border payments, and flexible integrations—features that legacy infrastructures simply cannot deliver without a spiders-web of patches and work-arounds.

Rather than patching outdated systems, the focus must shift to building entirely new, cloud-native infrastructures. These systems offer the scalability, speed, and adaptability necessary for real-time processing and the flexibility to integrate with emerging payment methods. For providers willing to embrace this transition, the rewards are clear: faster product launches, smoother operations, and a stronger ability to meet the expectations of tomorrow’s merchants and consumers.

2025 must be the year when we stop letting legacy system hold us back. This isn’t just a technological transformation—it’s a mindset shift. By prioritising modern infrastructure, the industry can unlock the true potential of payments innovation, ensuring no business is held back by the constraints of yesterday. I predict that those who act now will define the future of payments; those who hesitate risk being left behind.

Julian Taylor, Senior Partner, Simmons & Simmons

The year ahead will bring further and welcome disruption in the legal sector as progressive technological, societal and cultural forces continue challenging the status quo and reshaping our profession.

Reskilling and upskilling trend to increase

2025 will see an increased focus on lawyers upskilling and reskilling, accompanied by a gradual but tangible shift in hiring practices. Digital proficiency and AI literacy, including a solid understanding of generative AI and coding, is emerging as a prerequisite for legal professionals – and not just apprentices or those early in their careers. This evolution has the potential to bring fresh impetus to the legal sector, drawing talent from non-traditional backgrounds and fostering a more innovative, inclusive and diverse legal landscape.

AI to alter pricing models

AI could serve as a catalyst for change in one area that has remained a constant: the legal sector’s pricing model. In the coming years, AI will undoubtedly disrupt this model. Firms should be open to having internal conversations and with their clients about the merits of alternatives.

Delivering more societal value must be a priority

Technological disruption and alternative operating models could drive a cultural shift and deliver greater value to society in 2025 and beyond. Together, they could not only support lawyer wellbeing, but also allow more time to be dedicated to meaningful pro-bono work and initiatives that harness the power of technological innovation. By doing so, the sector can expand access to legal services, particularly for underserved communities, and make a lasting, positive impact.

Tim Warrington, chairman of SKAGEN Funds

Concentration risk remains the evident challenge with the US constituting two-thirds of the MSCI ACWI and the ten largest US stocks being more than one fifth of the global index. While opportunities will always present for active managers, especially in the EM, making the case for diversification against such a narrow bull market will continue to challenge advisors. It’s a cliché to cite geopolitical risk as heightened, but persistent volatility and war and the threat of war in several regions is generating an excess of grey swans – high-impact low probability risks. Many of these cannot be as easily overlooked as they were in the past. And this will further complicate the case for diversification.

The consensus tail risk remains inflation so, here in SKAGEN, our advice remains much the same; diversify sensibly, know where and in what you are invested, and follow it up regularly.

Paul Taylor, Vice President of Product, Smarsh 

This year has shown that non-financial misconduct (NFM) persists as an issue for the financial services sector, particularly following The House of Commons’ Sexism in the City report. Our own recent research into this found that 63% of employees in the sector aren’t completely confident in their organisation’s ability to detect instances of NFM. In 2025, leaders will need to rebuild trust with their employees and establish effective systems that can identify NFM instances. 

With our research showing that 66% of employees in the sector are supportive of AI being used to help detect NFM in their organisation’s workplace communications, a clear use case for the technology emerges. As firms build out their strategies to combat NFM in 2025 and onwards, there is an opportunity to deploy purpose-built AI to analyse the communications data they are already storing for recordkeeping and detection of financial crime, to also detect NFM instances at scale. While AI has widespread uses across this industry, this is one area in which it can make a real impact and help stamp out issues that threaten organisational culture, reputation and bottom lines.

Andrew Martin, CEO and founder, SMEB

Despite predictions of a cashless society, cash continues to hold a significant role in the payments landscape. Fintechs and banks are adapting by maintaining or enhancing cash services – for example, Revolut’s entrance into the ATM market – ensuring broad customer accessibility. This highlights the critical need for businesses to be flexible and ready to accommodate evolving customer preferences.

Businesses must have the infrastructure to accept all payment types. What matters most is ensuring a seamless and consistent payment experience across platforms.

Benoit Dageville, president of products, Snowflake

In 2025, the challenges hindering AI implementation – including concerns around trust, inaccuracies, synthetic data, and AI rights – will largely be addressed across various applications. For example, significant progress will be made in developing chatbots that reliably cite their sources, enhancing the dependability of user interactions with data. Synthetic data might be an issue if you’re talking about training future generations of models, but the current generation of models are actually quite good for a whole set of applications that we can build right now.

There are also innovative solutions emerging that address the ongoing GPU shortage, particularly as developers and startups are drawn to the expanding significance of inference. One approach is to enable customers in regions with limited or no GPU access to utilise GPU capacity available in other locations or deployments. As these technical challenges are resolved, attention will progressively turn to using AI for applications that provide tangible value, ushering in a phase of meaningful and impactful progress across the field.

Arik Rashkes, Head of the Financial Institutions Group, Solomon Partners

I am quite optimistic about Mergers & Acquisitions in the Financial Institutions Industry in 2025.

The financial system is poised for a strong year, with significant consolidation expected across insurance distribution, wealth management and financial technology—particularly after a few challenging years for FinTech broadly. This momentum could create a flywheel effect, driving further growth.

Several factors support this outlook, including the resolution of election-related uncertainties in the U.S. and the anticipated gradual decline in interest rates, both of which point to a promising future for the financial sector.

Stéphane Dehaies, CEO, Spendesk Financial Services

The payments landscape is evolving rapidly: propelled forward by technological innovation, changing consumer behaviour, and industry-wide shifts to digitalisation in the drive to achieve greater operational efficiency. Thanks to the convenience of online payment apps, we have already seen the demand for digital wallets skyrocket in key markets like the UK and I anticipate mobile technology will continue to dominate the space next year.  Payment options like Buy Now Pay Later (BNPL) will also remain popular, with consumers preferring these flexible and customer-friendly modes of transaction.

It’s no surprise then that the future of the digital payments industry is dynamic and customer-centric. The increasing availability of fast, real-time payment options is reshaping customer expectations and 2025 will, no doubt, witness the growth of embedded finance, allowing every company to provide a seamless fintech experience.

This year, the economy was marked by volatility, resulting from geopolitical risks and political changes across the globe. We witnessed more than 50 elections that I expect will shape the economy in 2025. 

Fintechs will have to navigate this new environment – including the high level of national debt in the UK, anaemic growth, and growing risk that inflation stays higher for longer – and enter a new era of value creation where the focus from investors will be on sustainable, profitable growth.

I anticipate the coming year will be marked by intense scrutiny from investors on realistic growth and profitability targets. The financial services and fintech industries will remain cautious in 2025; continuing to focus on retention, diversifying revenue, and controlling costs.

Despite the funding slowdown, the quality of M&A deals has improved as have quarterly results as companies report strong growth and will continue to do so into the new year. I expect this to go hand-in-hand with investment into generative AI to drive operational excellence, a critical aspect for scale and profitability.

Deniz Johnson, Chief Operations Officer, Stratyfy

Over the past year, stricter regulations drove financial institutions to view fintech in a different light. Some looked to fintechs to solve various pain points – especially around compliance. Overall, the demand for automation and efficiency continued to drive most partnerships with fintechs. Financial institutions of all sizes continued to analyse their core infrastructures to remove friction in operationalising fintech partnerships and integrating new technologies with legacy systems. Smaller institutions, in particular, have increasingly looked to fintechs to enhance their operations. In 2025 and beyond, we expect community banks to lean on fintech partnerships to keep pace with the larger institutions that have the resources and manpower to innovate in-house. With its proliferation across more industries than ever, AI adoption will be fundamental for financial institutions to stay relevant and create new openings for greater innovation. However, FIs will also need to adopt their own strategies for developing and implementing AI to ensure proper guardrails and protect against risk.

Michael Von Bevern, Co-Managing Director, Suntera Fund Services

Risk-adjusted returns for private credit will remain a compelling alternative to private equity for institutional investors.

Private credit, especially direct lending, has the potential to offer greater risk-adjusted returns for institutional investors in 2025 compared to other asset classes. With base rates staying elevated longer than many investors expected in 2024, and as central bankers in developed markets prepare to initiate easing cycles, private debt has emerged as a compelling alternative to private equity for institutional investors, offering attractive risk-adjusted returns.

We could see private credit outperform private equity when it comes to absolute return allocation. Some LPs could even see the best risk-adjusted returns they have ever had in 2025. We should anticipate this higher-for-longer rate environment to persist.

Private credit borrowers will benefit from lower interest rates and lower defaults.

In Q3 2024, private credit defaults were significantly lower than in Q2 2024, signalling improving borrower stability. While lower interest rates can further reduce defaults, their impact often takes time to filter through the system. Over time, lower interest rates provide substantial relief to borrowers, improving affordability and reducing default risk. Although lower rates may lead to reduced income for lenders, the trade-off comes with decreased risk. We anticipate even lower private credit default rates in 2025. We also expect the fed to cut interest rates again, which we predict would be 100 more basis points.

There will be no significant regulatory changes that will impact private credit fund managers in the near-term.

In recent years, there has been increased regulatory scrutiny of lenders who lend money to private credit funds typically in the form of NAV-based or subscription-based loans. Because of this, there has been a notable shift of traditional lenders scaling back their involvement in private credit lending leaving a gap for non-bank lenders to step in, who too will face increased scrutiny from regulators. However, private credit fund managers themselves will not necessarily face significant regulatory changes in 2025.

Despite these changes, the continued growth of private credit is attracting greater interest from institutional investors. As private credit funds expand and institutional LP participation increases, regulatory discipline and reporting requirements are expected to intensify. For Private fund managers, maintaining a focus on transparency and risk management oversight will be required to keep pace with the sector’s growth.

There will be heightened emphasis on private credit loan administration technology leveraging AI and machine learning.

In 2025, AI and machine learning will present new opportunities to streamline manual processes in private credit. Within the private investment community, GPs have seen a 52% increase in AI adoption, while LPs plan to grow their AI allocations by 75% in 2025.

However, private credit loans are inherently nuanced with terms tailored to each deal. Credit agreements often vary significantly between lenders, incorporating covenants specific to individual transactions, which makes training AI to accurately interpret and extract critical information from these agreements a complex challenge. This variability creates a gray area in how loan terms are interpreted and applied in the market, limiting AI’s ability to operate independently in these contexts.

Despite these hurdles, technology is steadily advancing in the private credit space.

There will be more competition for private credit deals for both lenders and service providers.

There will be increasing competition among private credit lenders in 2025, as evidenced by the flexibility of debt documents. Even during recent periods of heightened competition in lending markets where tighter covenants and stronger lender protections might typically emerge, there was only a slight shift away from borrower-friendly terms. To retain market share, we can expect private credit lenders to uphold these borrower-favourable terms and agree to provisions that are negotiated in the syndicated loan market.

The Private credit market is poised for growth in 2025 and, despite interest rate cuts and ongoing volatility, it remains a compelling option for institutional investors, offering returns that rival private equity. However, very few people are still focused on the private credit market. As it evolves, one of the key challenges will be finding solutions to keep pace with change.

Randall Degges, head of developer relations, Snyk

For developers, AI agents are poised to streamline processes within GitHub apps and pull requests, executing tasks such as code formatting, style standardisation, vulnerability detection, patching, and more. This trend points towards a near future where AI-powered tools help development teams achieve consistency, efficiency, and security in their codebases, providing automated, scalable solutions for both productivity and security needs. While AI agents will not replace human developers anytime soon, we will see them enhancing human capabilities in 2025 by tackling repetitive tasks, ensuring consistency, and offering real-time feedback.

Faisal Husain, CEO, Synechron

Next year’s business environment will demand sharper focus and faster adaptability as technology advances and market demands shift. Businesses will need to think beyond immediate challenges and prepare for long-term growth.  

On the economic side, interest rates, which have remained high for the past two years, should boost investment as the Fed likely continues to cut. This will help fuel more mergers and acquisitions, modernisation projects by large companies and renewed spending on innovation, all of which should help drive business for technology consulting firms.  

With the incoming administration, there are some potential opportunities depending on how AI and crypto regulations potentially change. At the same time, we also expect more of a focus (and spending) on cybersecurity. 

As many of our clients are moving from experimentation to adoption of AI, this new landscape will require much more advice and support as they strive for implementation of these new products.  

For us, this means helping our clients anticipate change and seize opportunities. After the most significant transformation in our company’s history – expanding into new geographies and capabilities via several strategic acquisitions – we’re exceptionally prepared to address the growing need for innovative, AI-driven solutions and robust cybersecurity strategies.

Konstantin Kruglov, Head of AI, TBC Bank Group

Until this year, generative AI has been largely off limits to banks and too difficult to incorporate into their daily operations. Recently though, some banking institutions, including TBC Bank Group, have been able to build their own AI infrastructure and use open-source pre-trained models to incorporate Gen AI into their operations. This is a real step change for our industry, precipitated by the falling cost of innovation, and its effect is going to get even more pronounced in 2025.
More and more banks will be leaning into Gen AI in the coming year. For example, TBC Bank Uzbekistan, the country’s leading digital bank, is already leveraging AI to make payment reminder calls to customers with loans that are up to 30 days overdue. Customers normally cannot differentiate the AI calls powered by our tech from calls made by humans, even as the AI calls are much more efficient for our bottom line. This is just one example, as we plan to launch other AI-enabled products and services in the coming year.

Harshul Asnani, President and Head of the Europe Business, Tech Mahindra

 The year 2025 is set to be a defining moment for agentic AI, driven by advancements in accessibility, affordability, and integration capabilities. AI’s ability to automate decision-making processes will enable faster and more precise responses to dynamic market demands.

From predictive analytics in finance to personalised customer engagement in retail, agentic AI will shift from being a cutting-edge innovation to an everyday operational necessity. Its scalability and adaptability will allow companies across industries to leverage it for trend analysis, resource allocation, and real-time problem-solving. 

Workplace productivity will also reach new heights as agentic AI takes on repetitive and complex tasks. AI-powered assistants will streamline scheduling, data processing, and client interactions, freeing employees to focus on innovation and work that contributes to strategic goals.

Industries like logistics and retail in particular will see major efficiency gains with autonomous delivery systems and AI-driven inventory management, reducing costs and improving efficiency. By the end of 2025, a combination of technological maturity, lower implementation barriers, and proven results will cement agentic AI as a foundational tool amongst businesses. 

Simon Axon, Financial Services Industry Director, International, Teradata

The third wave of AI in banking

The first two waves of AI in banking focused on enhancing credit risk portfolios and driving digital transformation. These advancements automated many processes, creating a “zero touch” experience for customers but also leading to a lack of personal connection between customers and their banks. In 2025, the UK will enter the third wave of banking, where AI will become truly transformative, restoring the personal touch once offered in branches.

Historically, banks have excelled at contextualising structured data but have yet to fully capitalise on unstructured data sources, such as customer insights from emails and voice calls. This will change in 2025 with the proven capabilities of Generative AI (GenAI), which can identify powerful signals of customer intent. By creating a comprehensive 360-degree view of each customer’s behaviour and needs, banks can deliver personalised services in real-time, now both online as well as in branches (where they still exist).

To succeed, the future of banking will rely on a highly data-driven approach that integrates AI-powered decision-making into application workflows. This will enhance backend efficiency and enable the provision of tailored services to customers. Successfully embracing AI will be a core differentiator for banks.

Innovating within regulation – is this the 2025 juxtaposition for financial services?

In 2024, we’ve witnessed stricter AI regulations being established with the financial services being one of the sectors that has been affected. One of the main challenges that many within that sector voiced was how to balance innovation whilst adhering to regulatory requirements.

In my opinion, regulation does not stop innovation, rather it ensures that it is done in a safe and ethical way, which protects both the business and their customers. For example, 2025 will be the year in which banks continue to deploy and deepen their use of AI, machine learning and big data analytics to further innovate their operations. Following the AI regulations closely will help them to easily unlock new potentials and opportunities for the business.

Additionally, due to the regulation, the year will see stronger human oversight and control of the technology. This will create a framework for financial services organisations to both protect customers and unlock growth.

Sal Karakaplan, Chief Strategy Officer, The Clearing House

In 2025, we will see an increase in the presence of instant payments for B2B transactions. Currently, many payments are being embedded into software as businesses need more data and workflows to run their businesses. This also leads to the trend of verticalisation in 2025. We will see this as vertical-specific independent software vendors (ISVs) becoming a significant trend as they help businesses run their operations, including embedding payments. We expect to see an increase in B2B and SMB transactions in these ISVs as they will provide straight-through processing, efficiency and cash flow to support businesses.
Another trend we will see in 2025 is an increased focus across the payments industry on fraud, which is already a primary focus for financial institutions. Real-time payments bring a lot of strength in protecting against fraud and scams because they enable the end user to authenticate and authorise a transaction from a bank channel. From that perspective, there are a lot of controls already built into the network.
While B2B transactions and fraud prevention are top of mind for 2025, we are also watching for additional trends which might emerge around stablecoins, immediate cross border payments, artificial intelligence, particularly regarding combatting fraud, and pay-by-bank.

Yaron Hazan, VP of Regulatory Affairs, ThetaRay

Regulators will shift from asking if financial institutions use machine learning, to focusing on how they leverage it for more proactive, data-driven compliance management. Law enforcement will find more value in AI-powered reports, as these will provide richer, more relevant data, improving their ability to detect and respond to financial crime more effectively. AI-driven reporting will improve the timeliness and accuracy of suspicious activity reports (SARs), allowing financial institutions to meet regulatory deadlines and reduce the risk of compliance failures or penalties. Machine learning will become a key tool in compliance as financial institutions increasingly leverage AI to drive more accurate, efficient, and effective compliance processes.

Peter Reynolds, CEO, ThetaRay

Compliance leaders will shift from being gatekeepers to playing a strategic role in driving business growth and innovation. AI in financial crime compliance will evolve into intelligent systems that understand data in context, delivering more accurate results and smarter decision-making. CEOs will recognise AI-driven, cost-effective, and regulator-approved compliance as a critical differentiator in the market. Improved risk management and tailored strategies will allow businesses to foster deeper and more trusting relationships with their customers.

David Segev, Chief Scientist, ThetaRay

AI in banking will become smarter at understanding the financial world. Advanced models will combine diverse types of data—such as transaction histories, customer interactions, market signals, and numerical financial data—to uncover relationships, enhance financial insights, and generate more precise, relevant, and accurate recommendations. We’ll see AI systems that can create personalised banking experiences, evaluate creditworthiness, detect fraud, and optimise investment strategies, all while self-correcting and improving without human intervention. Smaller, faster generative AI models will emerge, delivering sharper insights with fewer errors. As AI becomes more autonomous and adaptive, it will respond to market changes and evolving customer needs with minimal human input.

Chloe Mayenobe, President and COO, Thunes

RTPs

Real-time payments have surged in recent years, with huge growth in cross-border transactions – however, the B2B space remains relatively untapped. In 2025, we anticipate significant growth in B2B real-time payments, driven by enhanced interoperability and the growing need for streamlined corporate operations. This will help bolster market competition but also enhance transaction security and efficiencies – a critical demand as businesses move faster than ever in the global economy.

Stablecoin

We’ve seen strong advancements in blockchain technology this year, with the use of regulated stablecoins opening up huge possibilities for cross border transactions. What’s exciting here is their ability to boost business efficiencies – through reducing volatility, speeding up transactions, and improving liquidity. And while we’ve seen some early adoption in this space, we see 2025 as a turning point for stablecoin use, which will redefine how businesses and individuals move money across borders.

Digitisation

As we look ahead to 2025, it’s clear that the global payments landscape will continue its rapid shift toward digitisation. In particular, we see mobile wallet adoption continuing to scale at pace, democratising access to payments technology and fostering economic participation at an unprecedented scale. At the same time, partnerships between fintechs and traditional financial giants focused on expanding payments networks will further fuel financial inclusion. With digital wallets expected to account for over 50% of e-commerce transaction value globally by 2025, the implications for economic participation are immense.

Regulatory change

As geopolitical complexities intensify, robust compliance frameworks will be non-negotiable in 2025. Companies operating across multiple geographies will need to be quicker on their feet to respond to regulatory change, and we expect to see corporates ramping up their compliance investments in 2025 to stay ahead. Adapting to this rapidly changing landscape will be key to driving trust and operational resilience in a more interconnected yet uncertain world.

Lucy Grant, Director, Tink

In 2025, we expect to see quality trumping quantity as many cost and climate-conscious consumers choose to invest in higher-quality goods, even if that means purchasing fewer items overall. Our recent research reveals that 60% of consumers would rather opt for higher-quality but fewer items, rather than many lower-quality items.

Customer expectations are also at an all-time high, and payments remain a sticking point. Among consumers who purchase high ticket or luxury goods, an estimated 58% worry about payment security, while 31% of high-end merchants say the high cost of managing fraud is a key challenge.

Merchants investing in solutions like Pay by Bank – often with payment service providers such as Adyen – can help turn these expectations into a strategic advantage, transforming common pain points into loyalty-building moments that set them apart from fierce competition.

Brandon Spear, CEO, TreviPay

From tech advancements to evolving buyer expectations, the B2B payments landscape will be an exciting space to watch in 2025. Forrester projections indicate a surge in B2B e-commerce to $3trn by 2027, signalling a sizeable opportunity for businesses looking to expand their reach. To scale successfully and cement buyer loyalty, merchants must consider that B2B buyers have unique buying trends and preferences to be met. The future of B2B payments isn’t just about transaction efficiency – it’s about creating intelligent, adaptive financial ecosystems that understand and anticipate business needs.

One B2B trend to watch is the rise of automation. Businesses cannot tolerate slow, error-prone payment methods like checks. We’re seeing a shift toward digital solutions that streamline processes, reduce costs and improve cash flow management. Merchants are implementing technologies, like e-invoicing and real-time payment tracking, that eliminate operational bottlenecks.

Second, there’s a convergence happening between consumer and business payment experiences. Business buyers now expect the same seamless, personalised interactions they encounter in consumer transactions. Flexibility with payment options is so important that a recent Murphy Research study found 78% of global business buyers claim it is necessary for merchants to offer invoicing, and 51% would switch to a different merchant if it offers flexible net terms (30-, 60-, 90-days to pay). We’re not just moving money; we’re crafting convenient experiences that build lasting relationships.

Strategic partnerships are also becoming commonplace. No single company should have to navigate the complex B2B payments landscape alone. By collaborating with fintech innovators, financial institutions and technology providers, merchants can access specialised expertise and scalable infrastructure. These partnerships enable more sophisticated risk assessment, expanded payment solutions, like trade credit and A/R automation, and seamless integration across business functions.

Alex Reddish, Head of Market Expansion & GTM Strategy, Tribe Payments

Apple unlocking its iPhone NFC chip and Secure Element to allow for third-party contactless payments, separate from Apple Pay and Apple Wallet, will be a game-changer in 2025. But this move could spur innovation beyond just payments, particularly in digital identity applications like car keys, student IDs and hotel keys. It also opens up a vast array of possibilities for merchants and payment providers to integrate their own apps or services more deeply with Apple’s hardware. It’s important to note though that developers will need to enter into a commercial agreement with Apple and pay associated fees to incorporate this new solution into their iPhone apps. While the fee structure hasn’t been published yet, this could be a factor in determining which merchants and providers can take advantage of these changes.

Francesco Simoneschi, Co-Founder & CEO, TrueLayer

2024 reflections

This year, we’ve seen a remarkable rise in the adoption of Pay By Bank, with it being embraced by merchants, consumers and regulators.

Among merchants, ecommerce has been a standout sector. Industry leaders like Ryanair, JustEat and Lastminute.com have embraced Pay by Bank, underscoring the market’s readiness for change. From our perspective, it’s about more than getting our foot in the door – it’s about disrupting the legacy payment systems and offering more choice, more competition and lower costs to both merchants and consumers.

Consumers have truly embraced Pay by Bank. In the UK alone, Pay by Bank transactions have tripled over the past three years, reaching 21 million in 2024. TrueLayer itself has more than 9 million customers, with a new customer joining every 3 seconds. Since partnering with JustEat in October, we’ve processed nearly a million sales, demonstrating the growing preference for better payment solutions.

Regulators are also supporting the shift towards Pay by Bank. The UK Government’s National Payments Vision aims to make account-to-account payments ubiquitous across the country.

This collective shift among merchants, consumers and regulators reflects the growing demand for better payment solutions. It’s clear that Pay by Bank is no longer just an alternative to card payments – it’s a revolution in reducing the cost of payments. The removal of exorbitant fees puts money back in the pocket of merchants and consumers alike.

Predictions for 2025

As we head into 2025, it feels like the payments industry is on the brink of transformative change and there are two major forces that will shape the future of the payments landscape.

The first is consumer adoption. Whether it’s the incredible growth of Pix in Brazil or UPI in India, or the rapid growth we’re seeing here in the UK and EU, the global trend is clear: consumers want the simplicity and security of account-to-account payments and are shifting behaviours to embrace it.

The second force is the “Battle of the Checkout”. Merchants are increasingly seeking alternatives to traditional card networks, pushing back against the Visa and Mastercard duopoly. Solutions like Pay by Bank are stepping up, offering payments that are faster, more secure and more reliable. So, 2025 will be a battle for checkout share among Pay by Bank, BNPL, Card payment schemes and others. Expect to see a dogfight that brings long overdue innovation and pricing competition to consumers and merchants.

Siva Narendra, CEO and Founder, Tyfone

Digital Banking++ is the next frontier in financial technology. It transforms digital banking into a platform that delivers efficient, secure, and convenient financial experiences. This strategy is built on the principles of Moore’s Law, Nielsen’s Law, and Huang’s Law, which predict exponential growth in computational power, network speeds, and AI capabilities. 

For Tyfone, these insights have guided the creation of our digital banking platform and invention of over 140 patents, driving solutions in fraud prevention, real-time payments, and AI-powered personalisation. Digital Banking +Instant Payment +Intelligence Framework ensures financial institutions stay ahead of technological progress while setting new benchmarks for trust, convenience, and resilience.

Deterministic Security: The end of account takeover fraud

Cybercriminals’ use of sophisticated social engineering tactics is growing. AI-powered tools allow them to clone voices, simulate human behaviour, and craft highly personalised attacks. These advancements make traditional security measures increasingly insufficient.

To counter this, deterministic security has become the only unfair advantage for financial institutions. Deterministic security uses decentralised secure elements already embedded in consumer devices like smartphones and payment-enabled wearables. These tamper-resistant environments perform cryptographic operations that bind credentials to specific devices. This ensures user identities and transactions remain protected from unauthorised access. Moore’s Law makes these secure elements scalable and efficient, while their integration into everyday devices provides resilience, even in offline or low-connectivity scenarios. For instance, dynamic tokenisation replaces static credentials with real-time cryptographic tokens, rendering stolen data useless outside its intended context. 

What Generative AI is not

Generative AI in Digital Banking++ isn’t about creating chatbots. Chatbots often fail to meet user expectations, as people don’t visit digital banking platforms for long conversations. Instead, the focus should be on efficiency and precision—providing one question, one answer seamlessly. 

With Huang’s Law, AI capabilities now interpret user intent with unparalleled accuracy. Generative AI systems use vector embeddings instead of work lookup, eliminating the need for labour-intensive programming of specific intents. For example, when a user asks, “How do I change my address?” the system instantly understands the intent and provides a deep link to the address update page. This approach avoids unnecessary friction. Chatbots are better suited for complex, multi-step interactions or escalation scenarios. They should be the end state, not the starting point.

3-Tier MVC architecture: Standards-driven innovation for open banking

The 3-tier MVC architecture forms the backbone of Digital Banking++, enabling financial institutions to stay agile while meeting evolving regulatory demands. It separates core systems, integration layers, and user interfaces to ensure seamless compliance with open standards like FDX, ISO 20022, and OAuth. 

Moore’s Law supports the development of API wrappers that standardise legacy systems, enabling institutions to adapt quickly to new requirements. Nielsen’s Law ensures decoupled UX layers take advantage of increasing network speeds, delivering faster and more responsive generational updates like UX3 without backend disruptions. Standards like OAuth provide secure authentication and data sharing, ensuring compliance with regulations such as Section 1033 of the Dodd-Frank Act. This modular approach allows institutions to innovate continuously while maintaining operational stability and resilience.

Instant payments: speed meets security and efficiency

Instant payments are not just about payments; they are about security and efficiency, much like mobile phones are no longer just about phone calls – they are a productivity tool. However, achieving this transformative impact requires building systems from scratch.

At Tyfone, we began this journey five years ago with Star One Credit Union and have now extended it with the launch of a dedicated CUSO, Payfinia, focused on providing open payments frameworks. The adoption of instant payments is transforming financial transactions, making them the new standard for 2025. These payments are not only the fastest option but are also the affordable, secure and efficient, with the potential to significantly boost institutional productivity by reducing reconciliation overhead to near zero. 

Nielsen’s Law ensures that increasing network speeds enable real-time transactions with near-zero latency, meeting consumer expectations for seamless payment execution. Beyond speed, instant payments deliver unmatched cost efficiency. By transitioning over 33% of same-day ACH transactions to instant payments, institutions have achieved 50% lower fraud rates than same-day ACH and 4.25x lower fraud rates than P2P transactions. Moreover, instant payments result in 4x lower reconciliation overhead, streamlining back-office processes and increasing operational productivity. Meanwhile, deterministic security ensures that transactions are cryptographically validated in real time, preventing fraud at the pace of instant payments. This powerful combination of speed, cost savings, fraud reduction, and operational efficiency positions instant payments as the cornerstone of trust and innovation in modern financial systems.

Ransomware and the expansion of resilience solutions

Ransomware remains a significant threat, targeting both core systems and digital banking platforms. To address this, the scope of resilience frameworks like Sheltered Harbor must extend to include digital systems, ensuring continuity across the financial ecosystem. Moore’s Law supports the development of advanced cryptographic methods for secure, decentralised data storage and recovery. Sheltered Harbor’s tamper-proof backups allow institutions to restore operations quickly after an attack. While traditionally focused on core systems, these solutions must now encompass digital banking to provide comprehensive protection. At the same time, deterministic security ensures that credentials, transaction data, and backup integrity remain uncompromised, reducing the risk of ransomware exploits.

Preparing for 2025

The year ahead presents both challenges and opportunities for the banking and payments sectors. By leveraging Moore’s, Nielsen’s, and Huang’s Laws, financial institutions can predict trends, innovate effectively, and deliver meaningful change. Through Digital Banking++, institutions are addressing today’s needs while shaping the future of financial services. Whether through deterministic security, instant payments, or AI-driven efficiency, this strategy sets a foundation for trust, resilience, and transformation. In 2025, the financial sector won’t just evolve—it will lead the way forward.

Matt Baker, Strategic Advisor, Uplinq

2024 saw a continued push towards digital transformation in small business lending. The FDIC’s Small Business Lending Survey found that nearly half of U.S. banks were using or considering using financial technology in their small business lending operations. This trend is expected to accelerate in 2025, with AI and data analytics playing an increasingly central role in lending processes.

AI-driven underwriting: Banks leveraging AI and machine learning in their underwriting processes reported improved risk assessments and more efficient loan decisioning. This technology allows for processing large volumes of data quickly, identifying patterns, and assessing creditworthiness with greater accuracy than traditional methods.

Automated processes: Modern fintech providers can now underwrite, originate, and approve small business funding in less than 30 seconds, with automated underwriting having “nearly zero marginal cost.” This efficiency is likely to become a standard expectation in 2025.

Sandeep Raithatha, Head of Strategy, Innovation & 5G IoT Products, Virgin Media O2 Business

Private network adoption will significantly accelerate in 2025, with the market projected to reach $6.4bn by 2026. Standalone private 5G networks are expected to capture 40% ($2.8bn) of investments, while the Shared Rural Network extends 4G coverage to 95% of UK landmass.

As a result, we will see businesses increasingly adopt private 5G networks for secure, high-performance communication, specifically in industries like manufacturing, healthcare, education, and smart cities, which will leverage private 5G networks for secure automation and real-time operations.

When it comes to private networks, we will also see the emergence of network slicing as the next evolution of private networks, enabled by 5G standalone architecture. This technology will allow for the creation of multiple virtual networks on a shared physical infrastructure, each tailored to specific business needs. This will provide high-quality connectivity and also empowers organisations to continue delivering exceptional service, while ensuring their connectivity solutions are both scalable and cost-efficient.

Deepak Gupta, EVP Product, Engineering & Services, Volante Technologies

In 2025 and the years ahead, the convergence of B2B and B2C payments will become more prominent in reshaping corporate payment strategies. It’s primarily driven by shifting customer expectations. Business customers, who are also consumers in their personal lives, demand the same seamless, intuitive experiences they’ve come to expect from platforms like Uber or Deliveroo. In the consumer world, payments have become almost invisible, with speed, integration, and automation as the norm. Now, B2B transactions are heading in the same direction.

Corporate customers increasingly expect real-time settlements and frictionless processes. This has accelerated the adoption of instant payments in the B2B sector, enabling businesses to access liquidity faster and conduct transactions with greater ease. Banks and financial institutions, however, face a dual challenge: modernising their payment systems to meet these demands while managing risk and cost.

Incremental transformation offers a practical path forward. By replacing siloed payment systems such as ACH, wires, and SWIFT with unified, microservices-based platforms, banks reduce inefficiencies, simplify infrastructure, and enhance their ability to compete with agile challengers. Ultimately, retaining corporate customers depends on delivering high-quality, integrated payment solutions. As the lines between B2B and B2C payments continue to blur, the ability to offer seamless, efficient services is no longer just a competitive advantage. It’s a necessity.

Peter Horadan, CEO, Vouched

2025 Will Be the Year of ‘Know Your Agent’

Banks have KYC: Know Your Customer. Doctors have KYP: Know Your Patient. Soon, anyone offering internet services will need KYA: Know Your Agent.

We’ve heard plenty about AI’s dark side: deepfakes impersonating users, bots overwhelming systems. But we’re on the cusp of an era where AI also works for good—automated agents that book travel, manage finances, and organize schedules on our behalf. Sounds convenient, right? But here’s the hitch: when your travel bot tries to book a flight, how does the airline know it’s genuinely acting on your behalf? They can’t send a one-time passcode to your phone—you might be asleep while your bot works.

As the utility of these AI agents explodes, we face a pressing challenge: inventing new protocols so service providers can trust these agents. It’s an emerging frontier, and 2025 will be the year we begin to navigate this fascinating landscape. Watching how we develop systems to authenticate not just humans but their digital proxies will be phenomenally interesting.

2025 Will Ignite the Fusion of Online and Physical Authentication

Get ready for a paradigm shift in how we verify our identities online. We’re all familiar with logging into services using a username and password, but as cybercriminals have become adept at cracking these codes, we’ve layered on multi-factor authentication—like one-time passcodes sent to your phone—and even introduced passkeys. Yet, these measures are no longer enough.

Case in point: hackers recently stole over $1m from DoorDash by flawlessly impersonating drivers, replicating every detail down to their selfie photos. This heist underscores a chilling reality—the sophistication of digital deception is escalating.

So, what’s the solution for safeguarding high-value online transactions? The answer lies in blending the virtual with the physical. Imagine going to a kiosk in a mall where you verify your identity in person. This physical authentication then links to your online profile, creating a robust digital identity that proves you’re genuinely you.

As the tug-of-war between cybercriminals and security experts intensifies, physically proving your identity may become a routine part of our online lives. In 2025, don’t be surprised if stopping by a verification kiosk becomes part of high value online interactions. The battle for digital trust is pushing us to bridge the gap between the online world and the real one, making personal authentication a cornerstone of internet security.

Yanki Onen, CEO and founder, wamo

In the past few years, we have seen a fluctuating macroeconomic environment and changing political conditions in the UK, which has the third-largest venture capital (VC) market. It’s seen investors here adopt a more cautious attitude that will likely continue into 2025. 

Tough market conditions and scarcity in cash have resulted in a mindset shift amongst VC investors, from ‘growth at all costs’ to ‘sustainable growth’, with an emphasis on the longevity of their investments. 

There is, however, an upside to taking a risk-averse path and prioritising startups with extended runaways. For those businesses, it’s a good sign of financial health and allows for more flexibility to delay raising additional capital down the line until there is a favourable deal climate.

Investors in the coming year will continue to want to see profitability, not ultra-fast growth, so those who can gain investment can have confidence that they are expected to do well in the future and sustain that.

For the approximately 25.8 million SMEs across Europe, 2025 will signal a bid for growth as they look to tap into new markets, particularly as business confidence in certain home territories proves low. But those taking the plunge and looking to do so must account for the challenges that come with cross-border trade. 

One of these is the need to navigate multiple currencies. This can be tricky for SMEs whose expertise understandably may not lie in knowing the intricacies of this, from the most effective processes to risks and the associated regulatory red tape. This is why in 2025, it will be critical for SMEs to build an ecosystem of support partners that can take away the worry, so they can focus on their core: running their business. 

The ability to make and receive payments in local currencies will be fundamental to the success of market expansion and having a support team on hand – ideally one with human expertise, not just an automated chatbot – that can be accessed from anywhere will be key to removing growing pains.

Nicholas Hyett, Investment Manager, Wealth Club

2024 was a year of significant political risks, with elections taking place around the world. 2025 is the year we see how those political risks play out in markets.

The incoming US administration is set to cut taxes and increases tariffs. Both have the potential to push up prices and kick start another round of inflation. An inflationary surprise could cause an upset when markets are pricing in a gradual easing of monetary policy. It also highlights likely tensions between the Trump White House and Federal Reserve – with fiscal loosening potentially undermining the Fed’s planned rate cuts.

The potential for significant disruption to international trade from tariffs, institutional infighting, and interest rates getting stuck at a higher level, could lead to volatility in currency markets and a repricing in US assets – ending the period of US exceptionalism we’ve seen recently.

All that makes a global portfolio essential. It’s impossible to know which way the macro-economic winds are blowing, but those with a diversified portfolio will be best placed to weather any storms.

On the plus side, the Biden administration was perceived as a barrier to corporate activity by many and the change of President could pave the way for an uptick in dealmaking in 2025. The new administration is likely to usher in an era of deregulation and lower corporate taxes. For a corporate America in good health and with substantial dry powder, that would create the conditions for a return of animal spirits.

This leads us to the final theme likely to define 2025 and beyond – the increasing importance of private markets for private investors. There is an ongoing shift in capital markets away from public markets and towards private. Companies are choosing to stay private for longer or not list at all. Founders of listed firms are increasingly willing to be taken private with private equity now seen as a valuable source of capital to accelerate growth and add value. Institutional investors have long recognised that they cannot afford to ignore private markets – in 2025 that realisation will hit the broader investment market.

Viren Patel, Financial Services Industry Strategist, Workday

Businesses in the financial services industry need to tackle siloed data if they are to drive performance in 2025. To date, the industry has been plagued by disconnected point solutions, manual processes and data silos that create complexity and cost while hampering agility.

Overcoming this will require a focus on intelligence and automation. AI and predictive analytics will enable businesses to accelerate workflows, untap data insights and respond faster to market shifts. While the financial sector has often been slower to deploy new technologies than others, the proven benefits of AI – from better customer service to fraud detection – mean we can expect adoption to rapidly ramp up in 2025.

Pierre-Emmanuel Degermann, Group Head of Strategy, M&A and Public & Regulatory Affairs, Worldline

Will 2025 see an intense battle for a pan-European payment solution?

Today, there are several initiatives that aim to create a pan-European payment means. Could 2025 be the year when the battle between them intensifies and we might see who the winners will be? Perhaps. But first, let’s remember three macro trends that have led us to this point:

The globalisation of commerce, driven by e-commerce, means that merchants are more often selling to people in a country different to their own. For this, they need to accept cross-border payments in multiple currencies. It also means that consumers expect their payment means to “just work” anywhere, not only in their own country but also when they buy from foreign retailers, either online or when they are travelling.

With the continued digitisation of society digital payments are becoming ever-more essential to the functioning of society. Some countries, such as the Netherlands and Sweden, are approaching cashlessness. Consumers now become frustrated, and even angry, if digital payment options are unavailable, even for a short time.

And rising geo-political uncertainty is re-opening questions of sovereignty and independence. Countries and political blocs have to consider how much they are prepared to rely on other states for essential infrastructure (including payments).

Alongside these macro-trends, we have seen some examples of successful Alternative Payment Means (APMs): notably Pix in Brazil and UPI in India, both of which have overtaken card volumes (although largely through displacement of cash transactions). However, despite some fairly popular local APMs in Europe (such as Bizum in Spain, Blik in Poland and Twint in Switzerland), card payments still dominate the European market, seeing the highest transaction volumes of any payment means (229 billion in 2023).

These local APMs have actually served to further fragment the European payment landscape, which already had many local card schemes. The existence of so many local payment schemes across Europe does not support the needs of global commerce, with merchants facing the complexity of accepting all these different payment methods. It also means that the only truly pan-European options available for merchants and consumers today, are the international card schemes. However, it seems reasonable for European governments and legislators to ask the question of whether, from a sovereignty perspective, it makes sense to depend on them.

And this is what I think explains the recent birth of several pan-European payment initiatives: trying to solve the combined challenge of both enabling EU-wide commerce whilst also protecting the sovereignty of this essential infrastructure.

The main initiatives on the market today are each taking slightly different approaches to addressing this challenge:

EMPSA (European Mobile Payment Systems Association) is aiming to leverage the branding and local adoption of existing mobile wallets (such as Bizum, Blik, Twint) whilst adding interoperability so that consumers with one wallet can use it in countries where another is accepted by merchants.

SPAA (SEPA Payment Account Access) is seeking to foster collaboration between Third Party Providers (TPPs) and banks by providing a remuneration model for payments based on Open Banking.

EPI (European Payment Initiative), backed by European banks and Payment Service Providers, is proposing Wero, a digital payment wallet based on SCTInst rails. Leveraging existing solutions, Wero will eventually provide all payment functionalities required by European users.

Digital Euro is being proposed by the European Central Bank (ECB) as a Central Bank Digital Currency (CBDC). It would be a digital form of cash issued by the ECB, distributed by intermediaries to enable payments between individuals and businesses with all kinds of form factors.

Will any of these payment initiatives be widely adopted? Can one of them rival or overtake today’s card dominance? I think we can learn some lessons from the success of cards, Pix and UPI, which have demonstrated the four key features that are expected by businesses and consumers, and are necessary for success:

Trust is an essential part of any payment means. Not only trust that it will be reliable and that the funds will be transferred correctly, but also trust that any disputes will be resolved quickly and fairly.

A low cost which is small compared to the total transaction value. It must also scale well (to suit both high and low transaction values). Typically, it will also need to be free for the end consumer – no one wants to pay for paying!

Friendly for consumers. Of course, it should be easy to use, frictionless and simple. But a key driver for consumer adoption is also broad acceptance by merchants. It is also essential that as many segments of society as possible can use it, so it must be accessible and inclusive.

A fair business model is essential. Firstly, simply to ensure that all participants receive fair compensation for their contribution. Secondly, the model should incentivise fair competition which will stimulate innovation and, in the end, create more value for merchants and consumers.

So, returning to my question at the start: will 2025 be the year where we find out who will be the winners in the battle for a pan-European payment solution? In reality, it is too early to predict with any certainty which of these current proposals will see the most adoption. However, regardless of this, I am convinced that the real winners will be consumers and merchants. In the payments industry, there is a long history of competition stimulating innovation. To take just one small example, let’s come back to card payments. Yes, card payments have been around for decades. Yet the transformation from shops taking an imprint from an embossed card 30 years’ ago to today’s virtual cards, network tokenisation and near-instant online authorisation, means that “card” payments now look nothing like their forebears. Perhaps it’s no wonder that card payments have remained so successful, because decades of competition-fuelled innovation have made them ever-more secure and easier to use.

That’s why I believe that the initiatives that today are seeking to enable resilient, EU-wide payments, will stimulate competition and innovation, giving consumers and merchants not only more choice but also, in the end, payment options that serve them better than ever before.

James Fry, Head of Enterprise Product, Worldpay

While cash continues to be relevant for billions globally, particularly during periods of economic uncertainty, its usage is in decline. In the UK, only 8% of adults report using cash exclusively, while 76% carry cash only as a backup for emergencies.

Simultaneously, cashless approaches are making strides across the UK. Contactless methods dominate in-store payments, with growing adoption even among frequent cash users. BNPL usage has also surged, now accounting for 4% of global e-commerce transaction value in 2023—equivalent to over $316bn —and is projected to reach 5% by 2027, exceeding $452bn.

More than ever, as the payments market evolves, businesses must balance this shift with equity and choice. Offering diverse payment options is essential to ensuring that all consumer needs are met, while supporting the continued rise of cashless methods. In 2025 and beyond, companies will need to adapt to this transition, innovating to remain competitive in a rapidly changing landscape while also ensuring they don’t overlook more traditional methods that may be declining, but that are important to many still.

Cindy Turner, Chief Product Officer, Worldpay

Fraudsters techniques are more sophisticated than ever. With £1.17bn lost to fraud last year, it’s no wonder that consumers are trying to better protect themselves too, as 43% now choosing security as a key factor for selecting a payment option. This is further illustrated in the global meteoric rise of digital wallets, which feature two-factor (2FA) and biometric authentication, offering more security and reassurance to consumers.

In 2025, while businesses’ knee-jerk reaction to combatting against rising fraud may be to maximise payments security, this must be done with a clear and proportionate strategy in mind. Building the walls too high can have a negative knock-on effect as legitimate transactions may be rejected, so merchants must strike the right security balance. With the support of ecosystem partners, holistic security strategies can encompass small enhancements that can go a long way in improving security measures and reassuring customers at the same time. For example, notifying customers that their transaction has been successful, or visually confirming that secure measures are in place with lock symbols.

What makes a trusted payments journey varies between markets, so it’s important to consider what measures make consumers feel like a safe transaction is being facilitated. Fundamentally, building strong defences against fraudsters and managing risk more effectively, without adding friction into the customer experience, will be business-critical in the next 12 months and beyond.

Joey Garcia, Director and Head of Public Affairs, Policy, Regulatory Affairs, Xapo Bank

For many tech-based, fintech, or blockchain native businesses next year MiCA will represent quite a significant step into the world of regulation, and high regulatory standards being applied to a largely nascent space. However, they will also need to understand the implications of non-compliance. Soon after the 30th of December, I expect authorities will want to show the industry their capacity to take decisive measures against what would then be the unlawful provision of services. These measures may look like sanctions, operational restrictions, or administrative penalties as high as €700,000 for individuals and €5,000,000 for legal entities. Undoubtedly, any regulation prioritising consumer protection and market integrity, applied to a developing industry, will likely prompt actions to establish clear standards.

While MiCA is frequently portrayed as the financial regulatory equivalent of GDPR, setting a benchmark for the industry, I don’t fully agree with that characterisation. That said, it’s likely to be a significant reference point for countries developing their own frameworks. What will be interesting is observing whether President Trump will meet his goal of introducing the US’ first regulatory framework in his first 180 days (which feels unfeasible), as he pledged during his speech at BTC Nashville. If this does happen, it’s likely that existing frameworks, including MiCA, will be considered as part of the development process.

The UK has the opportunity to leverage its ‘second mover advantage’ to create a more balanced regulatory framework through collaboration with industry stakeholders and participants. The balance of being able to foster and support innovation, while creating a secure environment for inexperienced consumers can be a very fine line.

Roman Eloshvili, founder and CEO, XData Group

The banking industry finds itself at a turning point, and one the most definitive trends currently transforming it is artificial intelligence. By automating and speeding up various operational elements, such as compliance, customer support, and cybersecurity, AI will make banks more agile and efficient. Agentic AI, in particular, will have a role to play. Its ability to act independently could further streamline decision-making and democratise access to advanced financial tools.

Another major influence I can see is the growing presence of Gen Z in finance, who are a very tech-savvy generation and whose preferences in banking operations lean towards digital experiences. They are interested in seamless solutions that come in mobile-first packages, with instant support, and personalised perks. To connect with them, banks will have to shift gears and prioritise user-friendly apps and a strong online presence. Partnerships with fintech companies will also be beneficial if they want to roll out innovative services with greater speed.

And continuing from the previous point, the rivalry between banks and fintechs, in general, will likely give way to collaboration. Fintech teams understand the flexibility of services a lot better than many old-school banks, and the latter can leverage this feature to their benefit, minimising the need to overhaul legacy systems altogether. Such collaborations will be particularly helpful for smaller banks that do not have many resources to work with, allowing them to stay competitive even against larger-scale competitors.

Stefano Vaccino, founder and CEO, Yapily

Changes to the regulator will streamline innovation

Regulation has hindered innovation in 2024, as highlighted in the UK government’s recently published National Payments Vision. But, recommendations made in the Vision make us hopeful for what’s to come in 2025. Bringing open banking regulation solely under the Financial Conduct Authority (FCA) should fix some of the regulatory gridlock we’ve experienced in the past, providing a clearer path for open banking and its evolution into Open Finance. Next year, we’d like to see the FCA enact meaningful changes, including mandating cVRP and consulting the industry on developing open banking-specific consumer protection laws.

Commercial VRPs will step into the light

We’re hopeful that 2025 will be the year commercial VRP breaks out, particularly for e-commerce. cVRP allows merchants to take payments directly from customer accounts, similar to Direct Debit and Card On File but with enhanced security and control. This benefits both businesses (lower fees, more efficiency) and consumers (stronger security, easier management). The UK government has called for the pilot of a commercially viable model for non-sweeping VRP in the recently published National Payments Vision, so we know the appetite is there. It’s now up to the regulators to create the right frameworks and incentives for banks to get on board.

Juan Pablo Ortega, co-founder and CEO, Yuno

This year, I travelled to 24 different countries and witnessed first-hand how the payments landscape is shifting. It’s no longer just about technology—it’s about people. This shift is reshaping everything in our industry.
Consumers now have more payment options than ever, from QR codes to digital wallets, and they’re embracing them without hesitation. But this also means businesses must adapt to local preferences. What succeeds in London might completely miss the mark in Manila. Looking ahead to 2025, I believe payments will become even more diverse and user-friendly for consumers across different geographies, catering to vastly different unique preferences. However, this diversity introduces significant complexity for businesses operating internationally.

Artificial intelligence will also play a pivotal role in transforming payments, enabling businesses to optimise strategies, enhance fraud prevention, and create more personalised payment experiences. Meanwhile, the rise of real-time payments is reshaping consumer expectations, with faster transactions becoming the norm worldwide. Businesses must adopt systems that not only enable immediate transfers but also ensure robust security. Integration of embedded payments within apps is another trend reshaping the landscape, making it easier for consumers to complete transactions without leaving their favourite platforms.

This is where payment orchestration becomes critical. As the payment ecosystem becomes more fragmented, orchestrators like Yuno are stepping in to simplify and streamline operations for businesses. In 2025, I see payment orchestration evolving into one of the fastest-growing sectors in the payments industry, helping businesses navigate this complexity and thrive in an increasingly competitive market.

Simon McDougall, chief strategist privacy & AI, ZoomInfo

2025 will mark significant divergence in AI regulation between the EU and the rest of the world. The EU AI Act, with its phased implementation, will prohibit certain high-risk AI systems and regulate general-purpose AI models within the next year, with broader measures to follow. The Act’s enforcement will rely on detailed Codes of Practice and the allocation of regulatory responsibilities across multiple bodies in each member state. This picture is complicated by other EU rules on data usage, including ongoing guidance from privacy regulators, and new regulation in areas such as behavioural advertising, product liability and data portability.

This risks being overwhelming for all but the largest companies. The UK will consult on its regime within weeks, likely with much more limited focus – regulating frontier AI and asking current regulators to use their existing powers elsewhere. In the US, the Trump administration will keep everyone on their toes, with any AI regulation primarily seen through the prism of US competitiveness and trade, but possibly catering to Elon Musk’s concerns around unchecked AI as a threat to humanity.