By Nick Merritt, Executive Director at Designit (UK)
The dust is settling on a frantic start of the year for financial services, giving us a clearer view of what lies ahead
I’m a movie fan, so indulge me. If financial services were a genre, it would be part sci-fi thriller, maybe a bit of romcom, and unfortunately for the squeamish, it can veer into a horror flick.
Why is the sector genre-spanning? Because change is constant. And 2025, is the latest in the series of twists and turns that grip the industry. Tighter regulations, evolving tech and ever-demanding customers will be keeping everyone on their toes, and glued to the drama.
So what’s in store for 2025? Stay tuned for spoilers…
Hyper-personalising finance
Personalisation matters for one simple reason: consumers want to feel valued. A basic “Hello Name” isn’t good enough. Customers are going to be sending those emails straight to SPAM. This year, financial services platforms are getting creative, using AI and data analytics to turn into digital clairvoyants and hyper-personalise their messaging – making traditional banks look like your dad’s VHS player.
Maybe your banking app notices your caffeine spending habits, nudges you to invest in a sustainable coffee co-op, and offers you a savings plan – all before you’ve ordered your flat white. That’s not creepy – that’s offering up personalised products while you get your morning caffeine hits.
But be subtle about it. Nobody likes being hit in the head with a spade. Give the consumer a bit of magic, show off a bit, but don’t come across as a digital stalker or make them feel like they are just another part of the algorithm.
Banking without the bank
The traditional idea of banking as a standalone activity is quickly changing, with embedded finance growing in popularity, seamlessly integrating financial services into apps, platforms and even the checkout counter. Think Buy Now, Pay Later options at checkout, bill splitting or instant payments built into your favourite apps. No more hassle of app switching, creating a smoother user experience.
To give a sub-sector example, retail banks may focus on collaborations with fintechs to provide seamless financial services directly within the platforms where consumers already spend time, making money management part of your digital everyday life. Embedded finance can stretch into other sectors, like education. Imagine a payment plan for your student loan directly through service providers! It’s almost invisible banking – happening in the background.
Greening the financial sector
Environmental, Social, and Governance (ESG) considerations are moving from ‘nice-to-have’ to ‘must-have’ for many investors and customers. And they are being asked to prove it by customers. The era of greenwashing is coming to an end.
In 2025, banks will be stepping up and offering green loans, sustainable investment portfolios, and carbon-neutral commitments. However, it’s not enough to just adopt ESG initiatives. Transparency is key and banks which adhere to this will stand out in an increasingly competitive market.
A better approach to financial well-being
However, no amount of innovation matters if people don’t trust you with their money. Convincing people to entrust their money and data requires financial services platforms to be utterly transparent. Nobody wants innovation at the expense of their life savings. And with increased reliance on digital banking, cyber threats are inevitable.
The question is how quickly and effectively can the financial services industry bounce back without losing its customers’ faith. The likelihood is more investments in advanced cybersecurity tools, leveraging AI to detect unusual activities and improving authentication methods to protect customer data and prevent fraud.
After all, you won’t care about the interest rate on your savings account if your account gets drained by a hacker. But it’s not just about keeping the hackers at bay – bias in algorithms is a silent killer of trust and can end up reproducing the same inequalities these platforms claim to solve. Imagine being denied a loan because the algorithm doesn’t like your neighbourhood. That’s why financial well-being lies at the intersection of convenience, customisation, and security. If this industry can pull it off, they’ll earn the one thing that money can’t buy: trust.
In 2025, financial services are going to be less about transactions and more about transformation. That means creating personal banking experiences that are intuitive and sustainable.
Ultimately though, the real measure of success isn’t how smart your tech is – rather how much smarter, safer and more in control it makes your customers feel. Pull that off, and financial services can become more than just an everyday function.
