As we are ready to unravel 2025 and the opportunities it entails, we can see the fintech industry growing at a meteoric speed. The trends are driven by advancements in technology, shifting consumer behaviours and global economic dynamics. In 2024, we saw an advancement in hyper-personalisation in a global payment trend that will continue to affect the trends in 2025 as well.
Future of Fintech
In recent years, adoption of fintech has substantially increased especially in India. UPI has changed how business is conducted in India over the past few years, money transfer has become hassle free. Moreover, fintech firms use technology to establish direct connections between the borrowers and lenders through P2P services and digital lending services. According to BFSI, the adoption of fintech in India is 87% whereas for the rest of the world it is an average of 64%. So, with these adoption rates, we can see varied trends in the industry that will further help people for hassle free money transfers and investments.
Let’s understand what the fintech industry in 2025 entails and what you can expect.
1. Embedded finance
The seamless integration of financial services into non-finance platforms is called embedded finance. We can see the adoption of embedded finance in 2025 at an enormous rate. Businesses are embedding payment processing, lending and insurance services in their platform for a seamless customer experience. As per a report by Bain and Company, the embedded finance market is expected to grow from $22 billion in 2020 to $230 billion in 2025. This tenfold growth shows its transformative potential.
Real-world example
For instance, giants like Spotify have incorporated embedded finance called Shopify capital, offering merchant quick loans based on their sales history. This will help small to medium scale merchants to avoid the long process of taking loans and can carry with their services swiftly. Another example we can see is Uber’s wallet which helps the drivers to access the payment directly and manage expenses from the app directly instead of relying on long banking services.
2. Decentralised Finance (DeFi)
Decentralised finance will move beyond the niche cryptocurrency communities to a wider audience of institutions or investors. The elimination of intermediaries have increased the transparency and increased yields has made DeFi a lucrative finance option as compared to traditional finances. As of Q1 2024, the DeFi market surpassed $70 billion in TVL, analysts are predicting this can go beyond $150 billion by 2025.
Real-world example
Platforms like Aave are allowing users to lend and borrow crypto currencies without any intermediaries, offering higher yield as compared to trasitonal banking practices. Aave’s flash loans help investors take quick actions in the market and make most profits. Another example is unswipe which is a decentralised exchange, helping users to trade tokens directly from their wallets.
3. Hyper-persoanlisation to continue
As discussed before, hyper personalisation of fintech services was a prominent trend in 2024. We can see the continuation of it in 2025 as well. AI and ML are becoming integral to delivering persoanlised financial services. From tailored investment portfolios to instant fraud detection, AI is shaping customer experience. A 2023 study by pwC found that 73% of customers prefer financial services that offer personalization. By 2025, AI-driven personalisation is expected to generate $1 trillin in new financial services revenue.
Real-world example
Institutes like Betterment and Wealthfront are utilising AI to create customised investment strategies. For instance, Betterment's algorithm analyze user goals- such as saving for retirement or buying a home - and then optimize the portfolio with low cost ETFs. Similarly, Erica Bank of America’s AI-driven virtual assistance helps customers with budget tracking, bill payments and credit score monitoring, everything tailored to their financial preferences.
4. Regtech will be around
As regulatory requirements become more complex, regtech will help the fintech industries to navigate compliance. Automated compliance solutions will become indensiple for mitigating the tasks and reducing time and cost. As per the Grand View Research the global regtech market valued at $8 billion in 2023 will reach $18 billion by 2025. This growth signifies the importance of compliance automation.
Real-world example
Companies like ComplyAdvantage use AI and raw data advantage to monitor transactions and prevent fraud and money laundering. Similarly, we see Trulioo’s identity verification enables businesses globally to onboard clients with KYC without any hassle.
5. Green Fintech
Green fintech will be a prominent trend in 2025 as consumers and companies prefer sustainable ways. Environmental, social and governance considerations will heavily influence the fintech industry in 2025 and beyond. Morningstar data reveals that ESG funds inflows reached $400 billion globally in 2023. By 2025, this figure is expected to double as businesses are adopting sustainable practices.
Real-world example
Now, when we talk about its real-life impact, we can talk about Aspiration, a green fintech startup that helps customers to track down their carbon footprint through purchases and offset emissions by planting trees.
Another example we can take of it is Neobank, which invests customer deposits exclusively in green projects such as renewable energy and social housing. Moreover, Robinhood’s ESG focused portfolios enable retail investors to align their investments with their values by making them invest in eco-friendly and socially responsible companies.
6. Raise of central bank digital currencies
CBDs will redefine the financial ecosystem by offering a government -backed digital alternative to cash. It helps in improving payment efficiency and financial inclusion and also reduces transaction cost. A bank for international settlements survey reveals that 80% of the central banks are actively exploring CBDs and 20% of the global population have access to CBDC. This is digital banking at its best.
7. Blockchain beyond cryptocurrency
Blockchain beyond cryptocurrency particularly in supply chain management and smart contracts. Gartner forecasts that blockchain business will reach $360 billion by 2026, fintech being in the forefront in adoption.
Real-world example
Tradelens uses blockchain for supply chain management, to reduce paperwork and fraud. Moreover saving millions in operational costs. Similarly, docusign is using blockchain for secure agreements, ensuring tamper-proof documents.
8. Fintech collaboration with traditional banks
Rather than competing with each other, traditional banks and fintech industry will shake hands. Banks offer trust and fintech offers agility and innovation, this combination will be seeked by the masses.
A 2023 survey by Accenture shows that 65% of the banks are actively seeking collaboration with the fintech industry.
Real-world example
JP Morgan’s Chase’s partnership with Zelle demonstrates how banks are incorporating fintech innovations to enhance their payment systems. Another example is the apple and Goldman Sach’s collaboration to launch apple card that will have bank’s financial benefits with apple design and customer centric approach.
9. Gamification tends to enhance financial literacy
Gamification in fintech will play a pivotal role in educating audience about personal finance and investing. With gamification, financial concepts become more engaging and interactive. A Deloitte report suggests that gamification could increase user engagement in fintech apps by 30% by 2025. Which will also improve the financial literacy among millennials and genZ.
Real-world example
For example, when we talk about Publics, a social investing app, incorporating community -driven features like investing competitions and discussions, this makes an investment fun. People can learn about the stock market in a fun way that will also motivate them to invest better.
Roles of Thought Leadership in FinTech Industry
In an industry like fintech that is dynamic, the role of thought leadership is pivotal in guiding innovation, fostering trust, and inspiring change. By sharing insights and groundbreaking ideas, thought leaders help in navigating the industry and help companies to adopt the new trends. Let’s see in detail how thought leadership has an impact on financial services:
- Driving innovation
Thought leaders in the fintech industry act as a catalyst to drive innovation by highlighting unconventional opportunities and inspiring solutions. For example, industry pioneers like Jack Dorsey and Kristalina Georgiva have been using their platforms to advocate for financial inclusion and digital transformation. Their foresight has advanced technological advancements and shaped regulatory dialogues.
- Building Trust
With the skepticism around technologies like blockchain, cryptocurrencies and AI, thought leadership is essential in building credibility. Articles, white pages and keynotes will demyntify complex concepts around the fintech industry.
- Empowering startups and enterprises
Startup can benefit from thought leadership by gaining access to frameworks and strategies that can accelerate growth. Meanwhile, big enterprises can adopt strategies to stay competitive in the market. For instance conferences like money 20/20 and CB insights serve as platforms where industry leaders share actionable insights driving industry-wide advancements.
The impact of thought leadership in finance can be seen in initiatives like Visa’s Fintech Fast Track Program, which mentors startups to innovate resposbily.
The fintech industry in 2025 will be driven by innovation, collaboration and customer-centric approach. From DeFi to gamification, we can see many changes in how people are approaching the fintech industry today.
