Estimated reading time: 6 minutes

The responses assume 2025’s key financial trends: digitalisation through generative AI (GenAI), cloud adoption, and API-driven ecosystems. These come with a strong emphasis on regulatory compliance and environment, social, and governance (ESG) initiatives, and better integrating small and medium-sized enterprises (SMEs).

Andrew Bateman: Lenders will focus on driving productivity and efficiency to reduce risks and increase profitability  

Digitalisation: 2025 will see banks increasingly turning to generative AI (GenAI) to “plug lending and technology knowledge gaps and optimise processes,” said Bateman. The technology’s capacity to curate tailored content enables the creation of personalised, interactive learning experiences for upskilling teams. 

“With large language models (LLMs), banks can, for example, process and interpret Letters of Credit and instantly perform checks on the documents to make quicker, and potentially more informed trade finance decisions,” Bateman explained. “In customer-facing applications, corporates could ask for a breakdown of their loans and ways to optimise their finances, thereby enhancing their own user experience while also reducing bank resource requirements.”

Partner ecosystems underpinned by Open Finance principles will be essential. By integrating value-added services through application programming interfaces (APIs)—such as automated ESG scoring, document verification, and GenAI assistants—lenders can maintain competitiveness and reduce time to value. A microservices approach will likely become increasingly prevalent, enabling greater organisational agility and risk mitigation.

Sustainability mandated by regulation: “Sustainable, inclusive, and responsible lending will high on the boardroom agenda in 2025, particularly as deadlines for Section 1071 of the Dodd-Frank Act and Basel 3.1 approach. These regulations mandate complex lending data reporting and more accurate risk calculations,” said Bateman.

A growing market demand exists for ESG solutions, including sustainability-linked loans, bonds, and supply chain finance. Bateman said, “Cloud and SaaS will play a big role here, providing the necessary agility to navigate this rapidly evolving market.”

SME integration: “Modernisation efforts are crucial, particularly for SMEs, since manual processes, siloed operations, and outdated technology can render SME lending risky and unprofitable. Banks must consolidate loan portfolios onto contemporary platforms to address this.”

Siobhan Byron: To keep pace in 2025, institutions must reimagine banking through innovative technology and ecosystems

Digitalisation: Institutions must reimagine banking to remain competitive. Adopting the right technology—implemented to maximise innovation while minimising risk—will be paramount. Strong growth is anticipated regarding cloud adoption in the US, UK, Germany, France, Singapore, and UAE, amongst others. Institutions recognise the benefits of cloud and Software-as-a-Service (SaaS) solutions in increasing agility and innovation whilst reducing risk, time to market, and overall ownership costs.

“Fintechs, neobanks, and technological innovation have flourished worldwide, technologies are being adopted by the masses at a pace we haven’t seen before, and Open Finance is a reality. This has led to heightened demand for instant, digital, seamless, and personalised services,” said Byron.

Conversely, regions with slower cloud adoption due to regulatory constraints require alternative strategies. “For these banks to remain competitive, they must invest in on-premises solutions that provide robust security, scalability, and data analytics. Ideally, solutions that can easily migrate to the cloud as and when the regulatory concerns are addressed,” said Byron.

A “flexible, modular transformation strategy” is increasingly preferred over the disruptive “rip and replace” approach for upgrading core systems. “More banks will adopt a Symbiosis approach, where a next-generation core banking system is deployed alongside existing infrastructure,” explained Byron. 

Microservices architecture and APIs allow banks to implement functionalities such as lending or Islamic banking services. AI-driven analytics further enhance insights into customer needs, operational performance, and growth opportunities.

ESG: ESG initiatives are increasingly supported by Open Finance ecosystems. “For example, a bank can bring together the services that a homeowner needs to fit solar panels on their house – from advice on selecting the right ones, choosing the installer, applying for the grants, complying with the rules, and so on.” These holistic, customer-centric approaches will continue to drive innovation and competitiveness.

Wissam Khoury: Automated workflows and real-time technology will be key

Regulation: Industry and societal transformations are occurring at unprecedented speeds, creating new opportunities and risks for banks to navigate. Continued volatility in capital markets, increasingly stringent regulatory requirements—including upcoming Basel 3.1 reform deadlines—alongside growing demand for ESG services and technological adoption pressures are reshaping the financial landscape.

AI ubiquity: GenAI will help drive the movement towards fully automated trading workflows. Its ability to analyse extensive historical data and real-time events offers deep market sentiment and positional insights. 

“By embedding natural language capabilities within interactive workflows and GenAI-powered assistants, institutions benefit from streamlined processes and elevated user experiences. As LLMs become a popular search engine for trading and analysis, access to information will become faster, simpler, and more intuitive,” said Khoury. 

“Traders can, for example, retrieve real-time market data, quotes, or transaction details – such as a detailed summary of all the FX spot trades executed – and run APIs to automate tasks such as booking trades and calculating risk measures,” he explained.

By embedding GenAI-powered assistants into trading platforms, institutions can automate tasks like trade booking and risk calculations; decisions about liquidity, cash management, investment strategies—including ESG criteria compliance—and comprehensive risk mitigation will grow faster and more informed.

“Modernisation efforts are also increasingly occurring via a microservices-based environment, allowing institutions to pick and choose functionality while reducing the potential risks of a large migration from a legacy system,” said Khoury.

Collaboration: Recognising that neither banks nor technology partners can independently deliver comprehensive functionality, robust partnership networks and ecosystems founded on Open Finance principles will be instrumental to success.

Barry Rodrigues: As instant payment volumes grow in 2025, banks must prioritise resilience, scalability, and speed of recovery

Digitalisation: From software to instant payments, digital transformation is inevitable.

“More than 80 countries today have domestic instant payment systems, such as FedNow in the US, SEPA Instant in Europe, SIC5 in Switzerland and FAST in Singapore,” said Rodrigues. Consequently, global instant payment volumes are anticipated to continue growing, encompassing both wholesale and retail transactions. 

Central bank digital currencies (CBDCs) are also gaining traction; over 60% of banks recognise their additional revenue opportunities, and 134 countries are exploring tokenised fiat currency versions that could disrupt cross-border markets.

Regarding payment modernisation, said Rodrigues, “more banks are looking to consume smaller, standalone components that can be easily integrated through APIs. With containerised, composable microservices and cloud deployment, institutions benefit from faster deployment cycles and greater efficiencies, with scalability and agility, while reducing risks associated with large-scale migrations from monolithic systems.”

GenAI will play a crucial role in anti-money laundering compliance, sanctions screening, and fraud detection—increasingly critical for instant and irrevocable transactions. With regulators mandating near-universal payment availability—in some instances up to 99.9%—institutions must upgrade capabilities to maintain compliance and provide secure solutions.

Regulatory deadlines: “With the US Federal Reserve’s March 2025 deadline for ISO 20022 migration approaching, financial institutions must ensure compliance and strategise their instant payment approach.”

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In their words, enhancing operational efficiency, productivity, risk management, and profitability will be top priorities for financial institutions across the industry in 2025. Since digitalisation is inevitable, preparation is vital for those who want to best take advantage of its promised benefits. Regulation has forced companies to reassess strategy, particularly ESG, while remaining innovative and competitive. Finally, SMEs are being increasingly recognised as crucial to the financial ecosystem.

Taking heed of these expected developments could allow financial institutions to best insulate themselves from the usual ups and downs of the industry.