Financial services: Industry trends shaping 2025
The financial services industry is constantly evolving with new technologies, shifting global market dynamics, and evolving consumer priorities. From the adoption of decentralized finance to the surge in sustainable investing, these developments are poised to reshape how value is created and exchanged, in a safe and ethical manner.
The financial trends projected for 2025 are outlined below, backed by the latest statistics.
Deloitte predicts that 2025 is a financial year that “will likely give bank CEOs anxiety”, with interest rates dropping and continuing geopolitical shocks, 2025 is predicted to be a low-growth, low-rate environment. Given the uncertainty around how the next year in finance will shape up, understanding these trends is crucial to positioning yourself and your business for success in the coming year.
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Overview of the global economic context at 2024-year end
- Global gross domestic product (GDP) in 2024, amounts to almost USD 110 trillion (Statista).
- At the end of 2024, the annual U.S. GDP growth is estimated to end at 2.7% higher than forecast at the beginning of the year (Deloitte).
- In 2024, the United States had the largest economy in the world, with a GDP of just under USD 29 trillion (Statista).
- The European Central Bank is expected to lower the interest rate to 2.75% by the end of 2025 (Deloitte).
- The net interest margin for the U.S. banking industry is expected to decline, dropping to 2.98 in 2025, from 3.24 in 2024 (Deloitte).
Top financial trends for 2025
Mainstream adoption of central bank digital currencies
Since the Covid pandemic, there has been a global move toward contactless and digital payments, and away from cash. Central Bank Digital Currency (CBDC) is a digital form of a country’s fiat currency that is issued and regulated by its central bank. CBDCs are fully backed and controlled by the issuing central authority, ensuring stability and compliance with regulatory frameworks. The motivation for using CBDCs is to improve financial inclusion and reduce reliance on cash.
- There are 87 countries, representing more than 90% of global GDP, exploring CBDCs (McKinsey).
- CBDCs have been launched in four countries – Jamaica, Bahamas, Zimbabwe, and Nigeria (CBDC Tracker).
- In Europe, cash usage has declined by 1/3 since 2014 (McKinsey).
- The European Central Bank says that as many as 10% of households in six large EU countries own digital assets (McKinsey).
- Digital yuan (e-CNY) is the largest CBDC pilot in the world. In June 2024, total transaction volume reached 7 trillion e-CNY (USD 986 billion) in 17 provincial regions across sectors such as education, healthcare, and tourism (Atlantic Council).
- There is limited understanding of CBDCs. The CFA Institute found that only 13% of survey respondents had a strong understanding of CBDCs
- Financial service providers are predicted to save USD 400 billion annually by moving towards digital finance (McKinsey).
- The response in support of CBDCs by end users was divided. 42% of respondents believe that central banks should launch CBDCs, 34% disagreed and 24% expressed no opinion (CFA Institute).
Sustainable and green investing
Investment is being shaped by the continued and growing emphasis on sustainability. As stakeholders increasingly prioritize sustainability, organizations face both opportunities and challenges in aligning financial performance with societal impact.
- USD 30.3 trillion is invested globally in sustainable investing assets (GSI Alliance).
- 79% of investors surveyed by Deloitte reported having an ESG policy in place (ESG Today).
- Europe is set to remain the largest in ESG assets with a predicted USD 18 trillion in assets by 2030 (Bloomberg).
- KPMG states that USD 90 trillion of sustainable investment is needed to meet the goal of limiting the global temperature increase by 2030.
- Less than 20% of finance teams currently report on their company’s ESG metrics (Vena Solutions).
- 85% of investors studied by Bloomberg reported that ESG leads to better returns, resilient portfolios, and enhanced fundamental analysis.
- 50% of customers surveyed by IBM admit they are willing to pay an average premium of 70% for sustainable brands (Vena Solutions).
- Investor demand for ESG is on the rise, with 42% of global investors prioritizing client expectations and reputation when making ESG decisions (up from 37% in 2021) (Vena Solutions).
AI and automation in finance
AI is being embraced by financial institutions and embedded into their organizations entering 2025. Through AI-driven education and processes, companies are redefining operations, enhancing customer experiences, and achieving significant cost savings.
- AI could propel global banking industry profits to USD 2 trillion by 2028, reflecting a 9% increase over the next five years (Deloitte).
- AI adoption within the finance industry is expected to be 85% by 2025, a significant jump from 45% in 2022 (Software Oasis).
- 63% of CEOs believe that payment automation is the most productive use of AI within financial processes, saying it has made payment automation significantly easier (Citizens Bank).
- The AI in finance market size is projected to grow from USD 7.3 billion in 2021 to over USD 22.6 billion by 2026, exhibiting a 25.7% compound annual growth rate (CAGR) (Software Oasis).
- AI can reduce operational costs in finance by 22-25% on average by automating processes and reducing errors (Software Oasis).
- Organizations that are devoting 5% or more of their total budgets to AI are seeing higher rates of positive return on average (EY).
- More than half of banking executives indicated that they want to improve productivity with generative AI, and 38% of executives expect the added efficiencies to reduce costs (Deloitte).
Cryptocurrency regulations
Since its inception in 2008, cryptocurrency has experienced fluctuating adoption rates, with some nations imposing outright bans. As stricter global regulations, particularly within the European Union, take effect in 2025, the year will serve as a pivotal moment for the role of cryptocurrency in business and commerce.
- There are over 560 million crypto owners worldwide (Triple A).
- Atlantic Council studied 60 countries, of these, cryptocurrency is legal in 33, partially banned in 17, and generally banned in 10.
- 40% of American adults own cryptocurrency (Security.org).
- 85% of surveyed merchants see crypto payments as a way to reach new customers, while 77% said they are accepting crypto because of its lower transaction fees (Deloitte).
- 46% of Americans think Bitcoin exchange-traded fund (ETF) approvals in 2024 will positively impact the blockchain industry (Security.org).
- 19 countries studied have regulations for taxation, AML/CFT, consumer protection, and licensing (Atlantic Council).
- 42 out of 60 countries studied by the Atlantic Council are in the process of making substantial changes to their regulatory framework.
As we move into 2025, the financial sector is positioned for a period shaped by innovation, regulation, and evolving investor and consumer expectations. Success in navigating this dynamic environment will depend on proactive adaptation and strategic planning.
