5 banking and finance trends for 2025

The banking and finance sector has certainly had a lot to grapple with during the past 15 or so years. Since the boom of the mid-2000s, the industry has been forced to navigate a series of challenges that would have tested the patience of even the most patient executive. From the fallout of the Global Financial Crisis and ever-tightening regulatory pressures to historically low interest rates and the rise of fintech competitors, banks have been operating in an environment where the ability to adapt to change is not a bonus but a necessity.

And this is without even mentioning the trend that is arguably the biggest game-changer of all – artificial intelligence. AI has quickly risen to the top of agendas in banking and finance boardrooms, with technology and software experts playing an increasingly significant role in the fortunes of profit and loss sheets.

Staying ahead of the game has never been more important and with that in mind, let’s turn our eye to the trends set to define the banking and finance industry in coming months.

Key industry trends

1. AI just getting started: the AI revolution may not be restricted to the banking and finance sector but its impact on institutions and customers cannot be understated. The next year will see further investment in technologies that will provide instant, personalized support (eg: AI-driven chatbots and virtual assistants), while robo-advisors will increasingly optimize investment strategies. The dark cloud of financial crime hangs over banks but the rise of AI-powered pattern recognition will help improve fraud detection. Automation will streamline loan approvals and compliance checks, with lending to become more accessible on the back of AI-driven risk assessments enhancing credit decisions.
   
   
   
   ^{Source: AI in banking and finance in 2025: five main uses & tools explained - NOCASH ® de 24 ani}
2. Focus on the greater good: it is no secret that banking and finance can attract negative headlines due to the ruthless approach of some players. Little wonder then that the sector will increasingly embrace the Environmental, Social and Governance (ESG) movement sweeping the business world. Expect a wave of green financing initiatives that support eco-friendly projects, while ESG-linked loans and bonds will also gain greater traction. ‘Financial inclusion’ will become a buzz term as banks look for ways to expand services to underserved communities and promote fair lending practices. Like all industries, executives will also seek to prioritize diversity, equity and inclusion (DEI) in hiring and leadership development.
3. Data protection a must: there are a lot of issues that keep banking executives awake at night but the fear of a data breach is particularly high on the list. Just as cyber threats evolve each year, banks and other financial institutions will invest heavily in AI-driven threat detection technology in the bid to analyze transaction patterns and identify and mitigate fraud in real-time. With laws and regulations such as Europe’s GDPR and California’s CCPA looming over banks, privacy-enhancing technologies (PETs) such as encryption, tokenization and decentralized identity verification will become more common, while 2025 will also be the year when quantum-safe encryption gains public attention in the battle to protect customer data.
4. Blockchain boom to roll on: one can’t discuss cybersecurity in banking without highlighting the rising status of blockchain. While the everyday man or woman may still not understand the world of blockchain, the banking industry know its value in not only enhancing security, transparency and efficiency but reducing cross-border transaction times from days to minutes. A big play in 2025 will be increased adoption of Central Bank Digital Currencies (CBDCs) that enhance financial inclusion and modernize payment systems, while decentralized finance (DeFi) and smart contracts will help automate loan processing and compliance.
5. Verification investment: verifying customers was a simple affair in the bricks-and-mortar era of banking. “Can I please see your driver’s licence?” The world is very different in 2025, with digital banking creating the need for faster, more secure and compliant customer verification. As banks search for ways to streamline onboarding while simultaneously reducing fraud, this year will see further adoption of biometric authentication, AI-powered identity verification and blockchain-based digital IDs. AI and machine learning have already bolstered Know Your Customer processes but keep an eye out for e-KYC (electronic KYC) that will allow customers to verify identities remotely and help enhance financial inclusion.

^{Source: Digital Banking Platform Market Report 2025- Digital Banking Platform Market Growth Drivers and Trends (thebusinessresearchcompany.com)}

Outsourcing: a key strategy to embrace emerging trends

Outsourcing can play a critical role in helping banks achieve the various trends and changes that are shaping the banking and finance industry. Be it outsourcing technology, operations or customer experience, executives and managers can tap into specialized expertise, access the latest systems and improve their operational efficiencies. Offshore providers can also provide banks with the flexibility to quickly and cost-effectively respond to changing customer demands and market conditions. 

With significant pressure on banks and financial institutions to stay ahead of competitors, it is little wonder that an increasing number are looking to partner with quality outsourcing providers that have the experience, technologies and workforce talent to deliver results. Valued at $85 billion in 2020, the global BFSI (Banking, Financial Services and Insurance) outsourcing market is projected to reach almost $175 billion by 2028¹ as more institutions join the almost 80% of retail banks that already outsource at least one part of their business operations².

Benefits for outsourcing in the banking and finance industry include:

• Cost savings: labor is one of the greatest expenses for any business but outsourcing to the likes of the Philippines can ease the load. The lower cost of living means businesses can pay 70% less for highly qualified talent than they would onshore, not to mention savings that come from not needing to pay for staff infrastructure such as technology, additional offices and furniture.
• Global talent pool: talent is not only a huge cost burden in Western nations. It can also be difficult to find given sizeable labor shortages in certain fields. The good news is outsourcing hotspots are home to a large and ever-developing talent pool of skilled and committed workers. This is particularly so in the world of technology, which is vital to so many of the emerging trends in banking and finance.  The Philippines also operates in a fiscal and financial system almost identical to conditions in onshore markets and is supported by dynamic financial tracking and reporting tools.
• Increased productivity: how often do you wish your teams could dedicate more time to higher-value tasks? Be it mortgage servicing, loan processing or back-end administration, outsourcing firms are experts at handling repetitive, time-consuming work and, in turn, allowing onshore partners to focus on strategic priorities such as delivering better customer experiences, creating new products or managing compliance risk.

Banking services to outsource

Outsourcing is no longer all about contact centers and data entry specialists (although providers still reign supreme in those arenas). Today’s banks and financial services institutions can outsource more complex or technical teams to help boost their capabilities including:

• Back office support: the process-driven nature of banking and finance means organizations often find themselves overwhelmed by labor-intensive jobs. Outsourcing back-office functions such as HR, Workforce Management, Personal Assistance, Payroll and Data Analysis is a relief for busy managers as it means their in-house staff can focus on high-value projects that help deliver long-term goals.
• IT and digital: the IT space has never been more complex and fast-changing, which means it can be extremely difficult for banks to stay on top of their systems. As home to a huge talent of IT experts, outsourcing destinations such as the Philippines can deliver or oversee the digital systems that are crucial to the success of modern financial organizations – and at labor cost savings of up to 70% less than the limited number of recruits on home soil.
• Operations: while some onshore businesses relish the chance to outsource tasks to a handful of offshore workers, an increasing number of banks and finance institutions are employing entire Operations divisions in nations such as the Philippines. These teams are not only able to streamline processes, identify opportunities and respond to specific business needs but are built to be responsive and proactively adapt to meet the needs of the changing landscape.

The need for banking and financial executives to be more agile, innovative and open to new ways of doing business is growing by the day. Learn more about why developing an innovative, cost-effective customer acquisition strategy can help cement your organization as the bank of the future.