Banks are in need of a refresh. The market is extremely competitive, and digital-first neobanks keep popping up, offering new services and higher rates that entice even long-term, loyal bank customers to reconsider where they put their money. Banks run on trust and stability, but also need to be forward-thinking in strategy and execution to overcome industry challenges.
By successfully managing industry evolution and trends, banks can drive faster growth, improve profitability, and get their slice of the $20 trillion value creation opportunity, according to McKinsey & Company.
Having a strong data strategy that puts quality first and aims to unify fragmented systems tops the list of 2025 banking trends. Data as an asset in banking refers to treating data not just as raw information, but as a valuable resource that can drive insights and decision-making.
This requires banks to bridge incomplete data they may have collected from customers, products, or transactions across disconnected sources.
Not all data is created equally, but there are three key ways that banks can increase the value of what they have and use:
Data is only useful when it’s easy to manage. That’s why Commerz Real, the asset manager for Germany’s Commerzbank Group, worked with SAP to combine their various data sources and databases. They went from nearly 40 different data repositories to one. With all data combined, management, reporting, and the transition to AI solutions is much easier.
AI is now a requirement to remain competitive in banking. The technology can’t be simply tacked on; banks need to adopt an AI-first strategy so that they can supercharge customer engagement, forecasting, customer service efficiency, personalization, and loan underwriting with the help of a strong data foundation.
But this innovation will need to be slow and steady to address compliance, regulatory, and risk concerns inherent to the banking industry.
According to the 2023 PwC Emerging Tech Survey, 53% of respondents said their company was prioritizing AI technology investments. PwC also estimates that harnessing AI to provide better personalization and boost the customer experience can help with retention and lead to 1.5 – 2x cross-sell and upsell growth.
Rabobank works with SAP to gain access to standardized data from SAP S/4HANA and improve their AI initiatives and process automation. This allows them to boost worker productivity by automating responses to the most common customer service questions and streamline incoming invoices to reduce human intervention and increase accuracy.
EY predicts that AI implementation will help banks enjoy higher worker productivity, with gains of up to 30% by 2028.
The question isn’t if, but rather when, generative AI touches every step of the commercial lending value chain. Banks can use the tech to innovate product development, loan servicing, and more.
Technology has simplified many actions like sending funds and checking balances as digital becomes the lingua franca of finance. Digital transformation is an ongoing banking trend and in 2025, will continue making strides in customer service and real-time transactions to measurably improve customers’ lives.
Modernizing banking platforms requires a strong, consistent focus on customer preferences to make sure new technologies are helpful and user friendly for all.
An overwhelming majority (91%) of 2,000 consumers surveyed by The Motley Fool’s Ascent service said mobile and online access is an important factor in choosing where they’ll bank.
In 2025, the finance industry will play a big role in championing environmental, social, and governance (ESG) efforts, from helping distribute government funding for clean energy projects to microfinance management that helps more people obtain access to capital to fostering transparency with clear reporting on sustainability progress.
As the world continues its switch to renewable energy sources, banks will play a pivotal role to support climate objectives and economic growth. Banks can provide access to green loans, bonds, and investment strategies that further climate goals and help bring green products to market to change the status quo.
PwC takes it a step further and makes an action plan for banks, imploring them to “create an integrated sustainability roadmap, a credible transition plan and develop strategically informed investor-grade reporting.”
The bank of 2025 and beyond will require new skills that will blend strategy with AI chops and a laser focus on the customer.
Banks can get ahead of this trend by mapping out the positions they will need to be most competitive and making their organizations visible and attractive to these highly skilled workers.
Banks can start by upskilling and reskilling their existing workforce, improving job listings, and updating training for recruiters to look for new talent that can fill any staffing gaps.
Alongside bringing on new talent and cultivating it from within, banks will also need to develop career trajectory plans to ensure these highly skilled technologists stay engaged, feel rewarded, and remain on board to execute the vision.
Banking data can no longer be trapped in disparate, archaic systems. While the transition to cloud storage might be slow going for some banks, they need to speed things up in order to remain competitive.
Banks that have already migrated to the cloud benefit from improved efficiency, faster product development, and enhanced security.
Standard Bank is a leader in cloud migration and worked with SAP to bring products and services to market faster and optimize IT infrastructure. The cloud collaboration allowed the global bank to rapidly deploy and scale features, reduce costs, and improve system performance and access to innovation.
How, where, and why consumers bank is rapidly changing. Banks that keep up with emerging trends and changing preferences will be the ones to grow loyalty in 2025 and for years to come.
Without a doubt, the next few years will put banks to the test, especially large, established institutions. Shrinking margins, growing competition, and demanding customers will continue to ramp up the pressure to change.
Financial institutions that want to win in 2025 and beyond will need to implement strategies that collect, store, and act on data so that they can keep up with and eventually anticipate customer needs.
Banking will see an accelerated transition to digital technologies and the industry won’t look back. Setting the foundation for these new services and technologies ensures a strong future for incumbent and newer banks alike.
