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.
Go deeper with GlobalData
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.
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By GlobalDataRBI 2025 forecasts (in alphabetical order by company name)
Stephen Boyer, Founder and Chief Innovation Officer, at 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.
Claire Gates, the head of payments, CAB
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.
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.
Saran Talasila, payment specialist at 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.
Andrew Bateman, EVP, Lending at 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 at 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 at 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.
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.
Zac Maufe, Global Head of Regulated Industries at 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.
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 analyzing 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.
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.
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.
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.
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.
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 at 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.
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.
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.
