- Banking 2025: Banks to invest over $600 Billion in technology globally this year
- Loans as a Service (LaaS), embedded finance, Customer Lifetime, and automation among the key innovation goals.
Innovation in the banking sector is driving an evolution in payment processing while the transition from traditional banking to digital transformation continues.
Within this landscape, emerging trends include Banking as a Service (BaaS), the mobile-first approach, and enhanced personalization.
The data reflects this growth: banks are investing over $600 billion in technology globally, according to expert Igor Tomych, CEO of Fintech Garden. According to the consulting firm IDC, that figure will be higher, between $700 and $750 billion.
Corporate and consumer banking will remain a significant part of global financial intermediation, and these will be the top 10 banking innovation trends for 2025.
1. Transition to Open Banking and BaaS
Open Banking and BaaS are transforming the financial sector by allowing banks and credit unions to share data and services with third parties through application programming interfaces (APIs). This fosters an interconnected financial ecosystem and promotes innovation and competition.
2. Mobile-First approach in banking
Banking is prioritizing mobile devices, facilitating banking transactions from smartphones. Intuitive banking apps, 24/7 access, advanced security, and service personalization are key elements of this trend.
3. Personalized UX at every step of the customer journey
The use of data enables banks to offer personalized services tailored to each user’s needs, optimizing communication and identifying needs throughout the customer journey.
4. Green banking
Another key trend of Banking 2025: more and more banking institutions are adopting sustainable practices such as sustainable loans, paperless operations, carbon footprint reduction, and funding sustainable projects.
5. Banking automation with artificial intelligence
From chatbots for customer service to predictive analytics for risk assessment, AI is revolutionizing banking by improving the efficiency and security of operations.
6. Lending as a service and embedded finance
Lending as a Service (LaaS) is trending: financial services that are directly integrated into non-banking platforms, making access to credit easier at point-of-sale and e-commerce platforms.
7. Real-Time payments as a global standard
Instant transfers are becoming the norm, improving the efficiency of personal and business transactions. Driven by the need for immediacy, with the growing adoption of infrastructures like ISO 20022 and the expansion of real-time payment systems in various regions, this technology is expected to transform the digital economy, reducing costs and accelerating global financial inclusion.
8. Focus on customer lifetime
Customer Lifetime refers to an estimate of how much money a customer will spend with a company over the course of their relationship. It’s a metric that helps analyze consumer behavior and a tool that assists in determining how much to invest in retaining the existing customer base. Banks are focusing on long-term relationships with customers, implementing loyalty programs, personalized services, and cross-selling strategies.
9. Responsible, Ethical, and secure use of Data
In response to growing concerns about privacy, financial institutions will strengthen their data protection practices, ensuring transparency and security.
10. Gamification in digital banking
Gamification elements, such as rewards and interactive challenges, are being implemented in banking platforms to encourage customer engagement and improve financial education.
The banking landscape continues to evolve rapidly, and institutions that embrace these innovations will have a competitive advantage in the financial sector.