TOP 2025 FINANCE & BANKING TRENDS: FINTECH, DEFI, CRYPTO AND NEW TECHNOLOGY COME INTO FOCUS

The finance and banking industry is undergoing rapid change driven by emerging technologies, evolving customer expectations, increased regulatory requirements, and new competitive pressures. As we look towards 2025, a growing hosts of shifts and trends are expected to shape the future of finance.

Core Modernization

Many banks still rely on legacy core systems built decades ago. Upgrading these outdated platforms with next-generation, cloud-based, data-driven cores will provide improved agility, insights and customer experiences. Core modernization will accelerate in 2025 as competition intensifies.

Open Banking Adoption

Open banking, which allows third-party financial services to access bank data through APIs, saw initial growth in 2023. By 2025, open banking applications will achieve mass adoption globally. Customers get more convenient services while banks benefit from partnerships with fintech innovators.

AI and Machine Learning Integration

AI and ML delivered initial benefits by 2023 like credit risk modeling and fraud detection. Over the next few years, AI algorithm explainability will improve enabling widespread deployment for chatbots, robo-advisory, predictive analytics and other use cases leading to hyper personalization of banking in 2025.

Blockchain / Crypto Mainstreaming

Cryptocurrency went mainstream with increased trading options and secured wallets. As understanding grows on blockchain’s ability to create transparency, traceability and decentralization, broader applications will emerge by 2025 like smart contracts, supply chain tracking and embedded payments.

Rise of Embedded Finance

Embedded finance – financial services integrated into non-financial settings – will accelerate through partnerships linking banks with eCommerce sites, apps and other daily activities. Customers can initiate transactions without visiting bank sites leading to financial services becoming nearly ubiquitous in 2025.

New Competitors

Big techs and agile fintechs have already created competition in areas like payments and lending. As these companies leverage data advantages, existing bank positions will erode faster across most product segments leading to responsive innovation by 2025. Banks will also collaborate more with both startups and big techs.

Workforce Reskilling

As routine tasks get automated, bank workforces will focus more on customer interaction, relationship management and data analysis requiring massive reskilling to adapt employees. Investment in upskilling initiatives will steadily rise through 2025 to develop new competencies like AI curation, process reengineering etc.

Focus on Sustainability

As ESG considerations intensify over the next few years, responsible financing will become integrated into lending decisions advancing growth for green businesses while reducing funding for fossil fuels. Passive ESG fund options will multiply as sustainable investing principles get embedded formalized bank policies by 2025.