Launching soon, Finextra’s PREDICT 2025 channel will gather insights and ideas from the industry's top thought leaders, capturing how the financial services industry will tap into technology trends in 2025 and
these predictions will be shared with our 700,000 monthly readers.
From November 2024 to March 2025, Finextra will be hosting video interviews recorded in-person and virtually with an esteemed collection of experts, promoted on our dedicated channel that also collates written op-eds
that explore fintech hot takes for 2025, tagged by technology or topic.
You can view Finextra’s PREDICT 2025 channel here. We’re currently accepting content for this series, so please don’t hesitate to get in touch via
content@finextra.com if you’d like to participate. To kick start our channel and the forecast for the year ahead, here are the Finextra community’s predictions for trending topics in 2025 in
capital markets.
Trade digitalisation
Moving towards a digital trade economy will be prioritised in 2025, according to Swift’s global trade strategist Terry Hubert in a
Finextra blog. Hubert said that the Model Law for Electronic Transferable Records (MLETR) is an attempt to establish a legal framework for paperless trade, but more needs to be done. “Progressing digital trade has a plethora of benefits, including operational
efficiencies, reduced manual entry, new data-led reporting, improved cash flow management and enhanced fraud mitigation.
“In fact, the International Chamber of Commerce (ICC) and the Boston Consulting Group found that digital trade could boost trade revenues by up to 20%, cut processing times by 60% and save global trade banks up to $6 billion annually. Not only that, but
there are environmental benefits, including promoting sustainable supply chains through improve visibility and transparency in production.”
Hubert continued: “One other unintended consequence of the digital journey is the potential impact on people. As we move to a digital world, there is an expectation that time consuming and manually intensive roles can be automated or semi-automated, which
could potentially result in a reduction or redistribution of headcount. Companies will need time to reflect on this and to strike a balance of providing employment to people and revenue to families, while keeping the bottom line and shareholders value front
of mind as we navigate the journey onwards.”
Blockchain
As Finextra blogger and owner of MIFSA Carlo R.W. De Meijer,
said “Layer 2 blockchain scaling solutions such as side chains or state channels are increasingly being adopted to enhance transaction speed and reduce fees, significantly improving user experience for decentralised apps (dApps). But also Layer 1 solutions
such as sharding contribute to the more quickly execution of transactions.”
However, these solutions must be leveraged in line with data privacy, cybersecurity, anti-money laundering (AML), know-your-customer (KYC), consumer rights, and incoming regulations such as the Markets in Crypto-Assets regulation (MiCA) in the EU and the
SEC’s rules for digital asset securities custody. New applications will come to the fore in 2025, and traditional financial institutions will look to smart contracts, stablecoins, DAOs, ICOs, DeFi, tokenisation, NFTs and ETFs.
API standardisation
After attending the North West summit of the AFP conference, Finextra contributing editor Scott Hamilton wrote up a
session where the subject of APIs was explored. Kicking off discussions stating that APIs are no new thing and systems communicating with each other should be a prerequisite within any organisation, it was clear that one of “the fallacies of APIs is that
they are in fact ‘standard.’
There are many providers currently operating with a variety of reporting formats and capabilities, and these are expanding exponentially. Hamilton continued: “Specifications that used to be closely guarded are now openly shared by financial institutions
with their customers and partners, even if it’s still not at all certain that what and how reporting works between one bank and its clients will be the same for every other bank-customer relationship connection.”
Supply chain finance
According to APQC’s Supply Chain Management Priorities and Challenges
paper, fewer organisations were able to achieve their business goals in 2023 out of the 350 professionals surveyed globally, but generative AI, blockchain, and process automation may provide the enhancements that organisations are looking for. Further,
according to Economist Impact data, 98% of executives claimed that they were already using AI tools to streamline at least one aspect of their supply chain operations.
Dmytro Spilka, director and founder, Solvid, Coinprompter,
wrote in a Finextra blog, “supply chain digitalisation will see many new technologies enter the fray to counter the growing problems facing the industry on a global scale. Maturing technologies like artificial intelligence, blockchain, and process automation
will unite to deliver value on a greater scale for organisations to reap the benefits of more cost and resource-saving processes.
“In utilising these technologies, organisations can continue to leverage stronger levels of trust and efficiency throughout supply chains that may become more complex over time as geopolitics, macroeconomics, and climate change continue to make their presence
felt.”
Sustainable securities
At Finextra’s annual conference, Sustainable Finance Live, a panel
explored how ESG and impact investing can lead to profit. However, one of the biggest challenges in 2024 is that decision-ready data cannot be created at scale, but this is no longer tenable and the industry must move to looking at one asset and one issue
at a time in a detailed, real asset context, to looking at many issues and millions of assets across a broader investment portfolio. In 2025, by leveraging emerging technologies, investing in sustainable securities could be a tangible option.