Lots of industry surveys and well-informed speculation are popping up across the financial services world these days. We’ve provided some of our own expert insights into banking and fintech trends in recent Finextra Predict
2025 articles, impact studies, and
webinars.
Given the general uncertainty surrounding numerous areas of the US and global economy these days - with the financial field leading the way - what do these prognostications have in common? We decided to look at two leading industry predictors – from the fintech
and banking sectors – to find out.
In summary, they agree:
- Fraud is massive and is a huge priority for many financial institutions, and a fast-growing, ever-evolving peril for everyone in that industry and throughout society. There is hope, however, as one source pointed out that banking and fintech industry leaders
continue to find new ways to combat the fraudsters – even if just to keep up with their evolving schemes, scams, and nefarious tools and methods.
- AI has gained additional momentum in the back office after decades helping with internal controls and operations in larger institutions – primarily via machine learning in anti-money laundering (AML) and client onboarding/know your customer (KYC) applications.
However, banks and fintechs are struggling to find and prove new customer-facing use cases for generative AI in the financial world.
What about the ‘good news’ in the industry?
One survey reports almost four out of five bank and credit union respondents (out of 308 in total) to be either “somewhat” or “very” optimistic about the financial services industry in 2025. Improving loan funding margins and interest rate spreads for institutions,
along with cautious hopes for regulatory relief and continuing strength in the broader economy may influence these attitudes.
It looks like fintech funding may be on the increase for 2025, and mergers and acquisitions in the banking industry should begin to ramp up again after years of light activity. That should encourage more investment in the sector.
Our principal sources for this analysis, which echo some of Finextra’s own research, include:
What’s Going On in Banking 2025, authored by Ron Shevlin, chief research officer of Cornerstone Advisors, a US consulting firm focused on community banks and credit unions. This survey of financial executive attitudes and
outlooks had 308 respondents, primarily among banks and credit unions in the $250 million to $50 billion asset range.
According to the survey, 80% were “C-level executives.” The split between survey participants was about 55% banks to 45% credit unions and the questions inquired about attitudes, top concerns, and priorities among many potential areas of emphasis, including
current AI deployment and plans for 2025, commitments and plans for real time payments (RTP), buy now pay later (BNPL) offerings, specific lending plans by category, technology usage, satisfaction, and future automation plans, and current and potential fintech
partnership initiatives within their institutions.
On the fintech side of banking, the mid-January video
Fintech Predictions 2025 featured Plaid founder and CEO Zach Perret, President Jen Taylor, John Pitts, head of industry relations, and Rex Salisbury, venture capitalist and founder of Cambrian Ventures. Their prediction presentation was a collegial gathering
of the three leaders from the well-known financial aggregation provider and moderated by Salisbury.
Each participant weighed in on key predictions made by Perret, surrounding top topics like fraud awareness and prevention, AI, regulation and compliance, the growth of stablecoins, and one outlier – the potential for larger banks to find new sources of revenue
in unusual places – including becoming advertisers for others.
Finally, Finextra has gathered our own group of distinguished experts to talk about trends in US and international financial services like instant payments and AI. In many cases, these correlate with the findings of the reports and predictions from Cornerstone
and Plaid.
Optimism, if tempered by uncertainty, is higher for 2025
The general 2025 outlook from bank and credit union executives, per Cornerstone’s survey, is decidedly bullish. Shevlin says respondents “haven’t been as optimistic about the coming year as they have since 2017: ” with 71% “Somewhat optimistic
about the prospects for the banking industry in 2025 and 12% Very optimistic.”
The latter figure is around double the percentage in the “very optimistic” category vs results of the 2024 survey. The total of 83% of respondents in the “positive” column for this year’s outreach is weighted more towards bank participants though, as only
6% of credit union execs answered “very optimistic” to this question, while 17% of bank responses fell into this category. Even “Somewhat pessimistic” responses were down substantially from last year’s survey, totaling only 14% vs 37% across the industry in
2024’s survey.
We can get a clue of how fintechs might view the road ahead from Perret’s and his Plaid team’s picks of top topics in the industry for the year. While their list of six predictions ranged from positive (industry investment and merger activity will increase
this year over past years, stablecoins will “grow massively”) to neutral (AI is mostly still just hype, the regulatory environment will remain relatively stable) to troubling (fraud is rising faster than ever as problem and industry concern.)
Fraud is right at the top of everyone’s list of worries
At the very top of the menu of priorities within all financial services players is how to accelerate fraud awareness and prevention. As Perret and as his colleagues echoed: "Fraud is going to become the number one discussion topic for banks. It is actually
going to surpass the regulators and regulation in terms of what they’re thinking about day to day.”
Salisbury agreed, pointing out just how big the fraud problem is, sharing estimates of $23 billion in losses in the US for 2023, and “about a trillion, globally, if you can believe the numbers,” while noting that the average consumer impact of such fraud
is substantial: about $3,000 (in losses).
Taylor added: “Fraud is the number one concern I hear with customers, with prospects, of all size and ilk. Frankly, as finance goes digital, fraud’s gonna follow.” She explained that even though financial crime incident volumes and values continue to increase,
the industry is better prepared now to fight back than ever before. Much of this is a result of doing a better job of identifying users and building security and fraud mitigation into products and processes.
“Fighting fraud is a team sport,” she asserted, meaning all transaction parties – financial institutions, fintechs, and customers, must work together to address this ever-growing scourge within financial services.
Pitts pointed out that fraud is really an “identity problem”, and that it was clearly ridiculous that despite industry’s efforts to prevent fraud, criminals continue to be able to open accounts with financial institutions with seeming impunity. This is the
case across the world, regardless of how these actors may have perpetrated fraud using authorised financial institution accounts to do so in the past.
Pitts believes the best way to solve this problem is by creating an identity-sharing program between institutions, a “federated identity” such as is employed in India and Brazil. He said doing so will make it much more difficult for the fraudsters to quickly
establish or transfer funds from bank account to bank account. Taking such steps, he asserted, may be a key part of solving the burgeoning financial fraud problem. Salisbury, however, doubted that Americans will accept government-led identity sharing, agreeing
with the team that it will likely need to be an initiative that is promoted or managed by the private sector.
Perret referenced Zelle and continuing crypto scams profiled in the media to bolster his assertions that fraud is very much in the public eye, and thus a preeminent topic for all financial providers. Many in the industry have pointed – both positively and negatively
- to the rapid ascent of
Zelle and its emergence as not only a top peer-to-peer payments provider, but also to its mounting actual numbers (if not large in terms of actual percentages) of
fraudulent transactions, pending
lawsuits, and other
recent challenges surrounding the platform and its users.
Since Zelle counts 151 million users of its services, it is especially prominent among all instant payments use cases in the US. The company just reported that it processed more than
$1 trillion in transactions in 2024.
Interestingly, Zelle notes that it has achieved broad acceptance in the financial services industry, well beyond its big-bank backers. According to the same press release cited above, there are now “2,200 financial institutions on the Zelle network, 95% of
which are community banks and credit unions.”
Beyond the other sources of fraud, how did the bank and credit union leaders surveyed respond about the topic of fraud, and even specifically, Zelle?
In Cornerstone’s survey, bank and credit union leaders – many of them presumably Zelle customers based on the statistics above - both listed “cybersecurity” and “consumer-related fraud” as one of their institutions’ “Top Concerns” for 2025. For banks, 48% of
respondents listed cybersecurity concerns and 43% noted consumer fraud, while on the credit union side the numbers were greater than half in each case: with 52% expressing ‘top’ concerns with cybersecurity and 51% with the fight against consumer fraud.
Keep an eye out for the second part to this article, on AI use cases in financial services and a the outlook for investments, mergers, and funding activities in 2025.