The fintech landscape is evolving rapidly, and entering 2025, we don’t see signs of slowing down. Financial institutions are embracing new tools and technologies to stay ahead of the competition, address customer needs, and deliver safe, secure and convenient solutions.
In this article, we will examine what we think will be trending in the ever-changing fintech industry over the next year.
Behavioural biometrics in cybersecurity
Cybersecurity will be in the spotlight in 2025. We are witnessing increasingly sophisticated fraudulent activity, and static biometrics are often not enough.
To improve upon the flaws, many financial institutions are integrating behavioural biometrics. It’s a method of passive ID verification that continuously monitors unique user interactions, such as typing speed, mouse movements, device orientation, and keyboard pressure, to detect suspicious activity in real time.
By combining behavioural and static biometrics into a multi-modal authentication system, businesses can enhance fraud detection while maintaining a seamless user experience. Powered by AI, these systems automate monitoring and address threats with a higher success rate.
As financial institutions adopt behavioural biometrics, they gain a powerful tool to customer authentication and stay ahead of evolving cyber threats. This technology is set to redefine digital security, offering a more thoughtful and safer approach to fraud prevention.
Further AI integration and processes automation
Artificial Intelligence has been widely used across many industries, and fintech is no exception. It’s commonly known for everyday usage in customer support, document processing, claims processing and credit assessment, where it helps to improve service speed and process automation, making routine operations more manageable.
In 2025, we might observe a shift in development priorities, with banks focusing on fraud prevention and identity verification. We can expect broader implementation and improvements in AI defence measures specializing in predictive analytics, pattern recognition and anomaly detection.
Banks will also integrate AI assistants to help with regulatory compliance, risk assessment, and investment research, which should improve overall business capabilities and streamline internal processes. However, given the strict regulations and risk-adverse nature of financial institutions, this might be a slow transition.
The need for Regulatory Technology (Regtech)
Regulatory compliance has been challenging for BaaS (Banking-as-a-Service) companies, with many having issues with insufficient risk management and compliance with anti-money laundering laws.
Many of those problems can be addressed by third-party risk management. These tools can monitor impacts from mergers, regulatory changes, and supplier risks, ensuring resilience against data breaches and operational disruptions.
Manual oversight of AML processes and compliance is inefficient and error-prone. Shifting to Regtech solutions enables real-time monitoring, configurable compliance tools, and enhanced KYC (know your customer) systems, ensuring continuous risk assessment across the customer lifecycle.
Growth of Buy now, Pay later (BNPL)
The BNPL sector is set to experience growth in 2025, driven by innovations in credit assessment and a stronger regulatory framework. Open banking integration is expected to play a pivotal role in enhancing affordability checks, providing lenders with real-time access to customers’ financial data to ensure more accurate and responsible lending decisions. Meanwhile, AI-powered risk assessment tools will help mitigate default rates, improving financial stability for providers and fostering trust among users.
Industry leaders are pushing the boundaries of innovation to maintain their competitive edge. Klarna, for instance, continues to revolutionize the shopping experience with its super-app, which integrates payment options, personalized recommendations, and seamless e-commerce features.
Switch to Virtual Cards for business expenses
Employee expense management is undergoing a significant transformation, with virtual cards poised to replace traditional physical cards in many businesses. While physical cards have long been a staple, they come with challenges such as misuse, loss, and the risk of credential theft.
Key features of virtual cards include instant issuance, customizable spend limits, single-use transaction capabilities, and detailed expense data. These features allow businesses to control spending, prevent misuse, and quickly react in case of emergency. Virtual cards can also restrict usage to specific merchants, ensuring compliance with company policies. Additionally, without physical cards, companies can contribute more to decreasing the amount of plastic waste and reduce carbon footprint.
Improvements in Cross-border payments
As regional economies integrate, the demand for cross-border payment solutions rapidly increases. Businesses leverage digital platforms to reduce transaction costs, enable instant settlements, and support multi-currency transactions.
Merchants are also expected to adopt ‘glocal’ payment solutions, which blend global reach with local preferences. These solutions allow businesses to cater to diverse markets while adhering to regional regulations. This shift is driven by growing consumer demand for localized payment options.
Payment Orchestration Platforms (POPs) are emerging as key tools for optimizing cross-border payments. POPs enable merchants to streamline payment processes, enhance customer conversion, and ensure compliance with local laws. Embracing these tools will be critical for international merchants looking to maintain a competitive edge.
Sustainable Banking
As we approach the latter half of the 2020s, sustainability is becoming a key differentiator for challenger banks. Consumers increasingly prioritise the environmental and social impacts of their financial choices, prompting digital banks to offer ESG-focused solutions. These may include green loans, carbon footprint calculators, and micro-offsetting tools integrated into banking apps, allowing customers to track and reduce their environmental impact.
Businesses, especially SMEs, are also adopting sustainability tools, such as carbon footprint tracking and automatic funding for tree planting with each transaction. As digital banks compete with traditional institutions, the shift towards sustainability will be a major factor in attracting eco-conscious consumers and businesses alike.
Summary
In 2025 we expect to see significant shifts as businesses adopt and improve upon advanced technologies. We believe that these innovations will redefine digital banking, offering smarter, safer, and more sustainable solutions for consumers and businesses.
We will closely observe the industry and see which one of those trends will become game changers and which ones won’t have this much of an impact. And who knows, maybe we will find a dark horse somewhere along the year that will revolutionize the market.
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