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 GlobalData2025 Saxo Bank Outrageous Predictions
Trump 2.0 blows up the US dollar
In 2025, the new Trump administration overhauls the entire nature of the US relationship with the world, slapping massive tariffs on all imports, while slashing deficits with the help of an Elon Musk-run Department of Government Efficiency (DOGE). “The implications for the US dollar are dire for trade around the world, as it cuts off the needed supply of dollars to keep the wheels of the global USD system turning, ironically risking a powerful spike higher in the US dollar. Instead, safety valves are found, as global financial actors scramble for alternatives.”
Potential market impact
The crypto market quadruples to more than $10trn, the US dollar falls 20% against major currencies and 30% versus gold. The US economy continues to reflate, but wages keep up with goods inflation, as production resources reshore to the US, giving US exporters an advantage.
Nvidia balloons to twice the value of Apple
In 2025, Nvidia’s success is supercharged further with the availability in volume of its revolutionary 208-billion transistor Blackwell chip, a chip that drives up to a 25-fold increase in performance of AI calculations per unit of energy consumed relative to the prior H100 generation. “With the intensifying AI arms race as no giant or even government wants to be left behind, and as AI data centre electricity costs have soared, the insatiable demand for the more powerful and yet less power-hungry Blackwell chips sees Nvidia taking the crown as the most profitable company of all time.”
Potential market impact
Nvidia shares trade well north of $250, before the market begins to question its potential to grab an ever-greater share of corporate profits, and as unwelcome regulatory scrutiny on its monopoly status tempers the outlook.
China unleashes CNY50trn ($7trn) stimulus to reflate economy
In 2025, China makes a bold bet that reflation is the only answer and thinks it can manage the inflationary risks as it unleashes a gargantuan set of fiscal initiatives that add up to promises of more than CNY50trn (about $7trn) in 2025 and the following years.
“Much of the spending goes directly into consumers’ pockets via e-CNY digital currency, so that it will be injected straight into the economy rather than to pay off debt. China also adds heavy doses of social engineering in its stimulus, incentivising companies to reduce working hours to improve quality of life. This boosts leisure time, consumption, company formation, family formation and childbearing.”
Potential market impact
A strong reflationary impact in China and the world, outperformance of EM relative to DM and China in particular, higher commodity prices globally, a stronger Chinese renminbi.
First bio-printed human heart ushers in new era of longevity
In an unprecedented scientific breakthrough, 2025 sees researchers successfully bio-print a fully functional human heart, using advanced 3D bioprinting technology. “Starting with high-resolution CT scans, scientists create an intricate digital model capturing every minute detail of the heart’s complex structure. This model serves as the blueprint for a state-of-the-art 3D bioprinter, which meticulously layers human stem cells and biodegradable scaffold materials to construct the organ with remarkable precision.”
Potential market impact
The success in bio-printed organs sees growth expectations jump for the biotechnology and 3D printing sectors. Most companies in this space are in the start-up phase, but watch for a rash of IPOs in the space. More generally, this surge in innovation and investment could reshape the healthcare industry, leading to improved patient outcomes and significant economic growth.
Electrification boom ends OPEC
In 2025, with the writing on the wall on the forward demand picture since two-thirds of oil ends up as gasoline or diesel in cars and trucks, OPEC finds its relevance shrinking further and its multi-million barrel per day production limits irrelevant. “With some members already cheating production quotas to grab what income they can and export demand falling, a majority of members quickly realise the jig is up. Amidst the bickering and in-fighting, key members leave. This consigns OPEC to the ash heap of history. Former members max out production to ensure market share, driving a large drop in oil prices.”
Potential market impact
Crude oil slumps in price, a boon for airlines, chemical, paint and tire manufacturers and freight and logistics companies. But the market balances quickly and oil prices stabilise, as higher cost suppliers, especially in North America, shut down expensive shale oil production. Japanese carmakers find themselves in a desperate race to catch up with other EV players.
US imposes AI data centre tax as power prices run wild
In 2025, US power prices spike higher in several populated US areas, as the largest tech companies scramble to lock in baseload electricity supplies for their precious AI data centres. “This inspires popular outrage, as households see their utility bills skyrocket, aggravated by the huge spikes in power prices for electricity consumed at home during peak load periods in the evening. In response, many local authorities move in to protect political constituents, slapping huge taxes and even fines on the largest data centres in a move to subsidise lower power prices for households.”
Potential market impact
A massive boom in US investment in power infrastructure. Companies like Fluor rise on signing massive new construction deals. Tesla’s accelerating Megapack gets increasing attention. Long-term US natural gas prices more than double, a significant contributor to a more inflationary outlook.
A natural disaster bankrupts a large insurance company for the first time
In 2025, a catastrophic storm and rainfall event in the US catches the insurance industry unprepared, inflicting damage stretching into many multiples of the USD 40 billion in claims linked to Hurricane Katrina in 2005. “One of the largest US insurers significantly underestimated the insurance risks from climate change, leading to underpriced policies in the affected region. With insufficient reserves to cover claims and inadequate reinsurance to mitigate the costs of this extreme event, panic spreads across the entire industry. A crisis unfolds, prompting government-level discussions on whether to bail out the failing company and the other walking wounded in the industry to prevent widespread risk contagion.”
Potential market impact
Berkshire Hathaway shares rise as Buffett’s company has enough capital to weather the panic and the company gains market share.
Pound erases post-Brexit discounts versus the Euro
In 2025, sterling rises through 1.27 versus the euro, the level it traded ahead of the Brexit referendum, thus erasing its entire post-Brexit vote discount. “The UK outlook is as constructive as ever in the post-Brexit era. That is, it is the most positive relative to the sick man of Europe, which is, well…Europe, or at least the core Eurozone countries, France and Germany. Fresh fiscal policy winds are blowing in the UK, where the new UK Labour government announced budget priorities ahead of 2025 that avoided the most growth-damaging types of tax hikes on income, while trimming the least productive public sector spending in moving to shrinking its deficits.”
Possible market impact
Encouraging domestic investment and a more robust growth outlook support sterling versus the flailing euro, seeing the Euro/Sterling rate fall as low as 0.7500, below the rate the day before the Brexit vote at 0.76. The UK FTSE 100 posts a strong performance.
Past annual outrageous predictions highlights
Sometimes the world catches up and becomes just the right amount of outrageous for the predictions to become true. Saxo has checked its archives to find the Outrageous Predictions that were much closer to the truth than thought:
- [Honourable mention] A country agrees to ban all meat production by 2030 (OPs for 2023)
- The plan to end fossil fuels gets a rain check (OPs for 2022)
- Volatility spikes after flash crash in stock markets (OPs for 2018)
- Bitcoin triples in value, from the current $700 level to $2,100 (OPs for 2017)
- UK seen leaning toward 2017 exit from the EU (Brexit) on UKIP election landslide (OPs for 2015)
- Gold corrects to $1,200 per ounce (OPs for 2013)
RBI 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.
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.
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.
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.
