5 trends for banks in 2025: from Open Finance to Artificial Intelligence (AI)
The financial sector is changing rapidly due to technological innovations and changing customer expectations. It is crucial for banks to adapt to these developments in order to remain competitive. finAPI presents five trends that will shape the banking sector in 2025.
Trend 1: “Open Finance” – the next level of Open Banking
Open Finance goes beyond traditional Open Banking. It enables access to a wider range of financial data. This includes not only bank accounts, but also information on mortgages, insurance, investments, and pensions. Through standardized interfaces, authorized third-party providers will be able to access this data and offer innovative financial services in the future with the customer’s consent. The EU’s Financial Data Access Regulation (FIDA) aims to foster this expanded data exchange and pave the way for Open Finance. At the same time, the PSD3 (Payment Service Directive 3) and the PSR (Payment Service Regulation), a new EU directive and a new EU regulation, are in the starting blocks to harmonize payment transactions in Europe, increase the security of payment transactions and enhance competition in payment transactions.
According to estimates, global payment transactions facilitated by Open Banking will reach a volume of 116 billion US dollars by 2026. This rapid increase of 2,800% since 2021 illustrates the immense potential that lies in opening up and connecting financial data. Open Finance could further accelerate this trend by linking not only payments but also other financial areas, thus creating innovative business models and added value for end customers.
Trend 2: Artificial intelligence and machine learning – personalization and increased efficiency
Artificial intelligence (AI) and machine learning (ML) are revolutionizing the banking world and will remain growth drivers in 2025. These technologies enable personalized customer experiences, improve fraud detection and optimize operational processes. With AI, banks can offer personalized products and make processes more efficient – from customer service to lending. One important use case is account analysis using machine learning, which enables a precise assessment of creditworthiness and risk factors when granting loans. This is where specialized providers such as finAPI step in to support banks with innovative solutions.
In addition, AI-supported solutions automate internal processes and contribute to digitalization. The result is increased efficiency that reduces operational costs and improves the customer experience. These technologies can be used for both private and business customers, which underlines their versatility.
The McKinsey Global Institute (MGI) estimates that AI could add between 200 and 340 billion US dollars in value to the global banking sector each year, or 2.8 to 4.7 percent of the industry’s total revenue, primarily through increased productivity.
Trend 3: Instant payments – real-time transfers will become the new standard
Instant payments are fundamentally changing the payments industry by enabling fast, convenient and always-available transfers – with no additional fees compared to traditional transfers. For consumers, the main benefits are speed and ease of use, while companies benefit from improved cash flow and a reduction in payment defaults. A significant increase in usage is expected, particularly in e-commerce and online payments, as instant payments represent an attractive alternative to traditional payment methods such as credit cards.
There are also advantages for banks: More frequent use of instant payments strengthens customer loyalty, as customers interact more with their bank and the smooth processing increases satisfaction. This opens up opportunities for cross-selling, for example by combining payment services with loans or investment products, which can secure additional income in the long term.
Regulatory pressure and customer expectations will make Instant Payments 2025 an indispensable component and the new standard in payment transactions.
Trend 4: Embedded finance – financial services seamlessly integrated
This trend is here to stay: Embedded finance describes the integration of financial services directly into the offerings of non-financial companies. This enables customers to use financial products such as loans, insurance, or payment processing directly where they need them, without having to visit a bank or financial institution directly. For banks, this opens up new sales channels and partnerships, while companies can offer their customers added value. Personalized financial services maximize the customer experience, increase engagement, strengthen customer loyalty and boost sales.
The market for embedded finance in Europe is growing dynamically: in the last ten years, the volume of embedded finance services in Europe has grown three times as fast as direct lending. According to McKinsey, the embedded finance market could exceed the 100 billion euro mark by 2030 and account for 10 to 15 percent of total banking income.
Trend 5: Exploiting synergies – partnerships between Fintechs and banks
Cooperation between traditional banks and Fintech companies is becoming increasingly important. While Fintechs are known for their innovative strength and agility, banks bring trust and a broad customer base. Through partnerships, both sides can combine their strengths to develop innovative products and improve customer service. Such collaborations promote competition and drive the digitalization of the financial sector.
Conclusion: These trends in 2025 will set the course for long-term success
The banking sector is facing a key phase of transformation. Trends such as Open Finance and embedded finance are not a vision of the future, but rather growth opportunities for banks. Innovative technologies and regulatory changes require proactive action in order to meet increasing customer expectations and to work more efficiently. Banks that focus on cooperation with Fintechs can utilize their agility and at the same time strengthen their own trust with customers.
2025 will be a milestone year for banks to position themselves in an increasingly digital and data-driven industry – those who act early will secure decisive competitive advantages. finAPI is ready to support banks actively in this transformation as an experienced, innovative partner.
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