Banking on the Future: 11 Technology Trends That Will Reshape the Banking Industry in 2025

With AI set to boost the profits of the banking sector by $170bn by 2028, 2025 will mark a significant step in this direction¹. While AI is already being applied to accelerate and improve credit risk assessment and document processing, the technology will now be deeply embedded in finance and real-time payment workflows. In conjunction, Generative AI adoption will increase, enhancing customer interactions and easing back-office workflows.

Cloud has been the gateway technology that enables banking organizations to implement other, more advanced solutions on an agile and scalable foundation. Cloud adoption is progressing in maturity, with 70% businesses already beyond the pilot phase². In 2025, banking organizations will move more data and workloads to the cloud, enhancing the resilience and agility of their technology stack for the future.

Over the last few years, the front end of banking and financial services has been expanding. Financial services are now being embedded into non-financial channels, thus expanding consumer access to credit through innovative offerings like Buy Now Pay Later (BNPL). In 2025, this trend will continue to accelerate, but banking organizations will need to devise lucrative services to compete with non-financial players and activate channel strategies to enter this expanding ecosystem.

The applications of blockchain in banking are numerous: from asset tokenization in capital markets and real estate to enhanced regulatory adherence with immutable ledgers, blockchain can boost transparency and accountability in banking operations. According to WEF, 10% of the global GDP could be tokenized by 2027³. Thus, the next year will mark an important step towards the transformation of banking operations with blockchain.

From retail customers to institutional investors, sustainability is attracting increased mindshare – 2024 was the hottest year on record, and climate change concerns are growing more tangible⁴. Accordingly, 64% banks are diverting their capital from carbon-intensive industries, and 73% are set to intensify their focus on sustainable banking options over the next 5 years⁵. In 2025, sustainable finance will be on the top of the strategic agenda, and ESG-focused products will siphon a greater chunk of market share to greener investment avenues.

Open banking has been enabling consumers to better manage their finances and investments by aggregating their financial data in one place. Open banking represents a competitive challenge to banks that fail to deliver frictionless digital experiences as it shifts first-party data away from incumbent players. However, by elevating the customer experiences of their services, banks can win consumer trust by delivering account aggregation services and enabling them to stay on top of their finances.

With the rapid digitization of financial railroads, cyber risk has been a growing concern for the industry. The World Bank estimates that cyber risk put $5.2tn of global value at risk in the last 5 years⁶, and the IMF views cybercrime as a key threat to global financial stability⁷. In 2025, banking organizations will make greater investments in cybersecurity to bolster security and trust in their financial services, and mitigate emerging risks of financial fraud.

Digital wallets have set a new standard of convenience when it comes to making payments. 4.3bn people are already using digital wallets, and this will grow to 5.8bn by 2029⁸. Until now, digital natives like Apple, Google, Paypal, and Zelle have dominated the digital wallet market. Over the next year, BFSI organizations will double down on their efforts to enter this competitive space, as it can help them uncover troves of financial data to enhance their offerings and deliver personalized experiences to their users.

Neobanks capture a small, but important part of the financial services market. In 2024, user penetration of neobanks stood at 3.89%, which is expected to hit 4.82% by 2028⁹. Neobanks set the standard for digital experience in banking services, and this trend will continue in 2025. Moreover, as neobanks enhance financial services access to underserved segments and offer competitive interest and credit options, they will represent a competitive challenge to traditional players in the market.

As cloud puts unprecedented computing prowess at the disposal of business organizations, AI will unleash its true power by enabling decision-makers to draw valuable insights from big data. As a result, advanced analytics will help BFSI organizations to make high-impact decisions with greater precision informed by evidence over the next year – for instance optimizing branch location placement, retiring underperforming products and services, and enhancing financial forecasting.

Lastly, security is set to take a new turn over the coming year as the next generations of devices offer more advanced user validation and authorization techniques. BFSI companies will be able to integrate biometric authentication techniques like facial recognition and fingerprints into their mobile and web services, thus elevating the security of their services. Biometrics will also find greater adoption within the organization, which will help mitigate insider threats and fraudulent access of threat actors.