From payments that clear in seconds to digital wallets that double as identity credentials, the sector is rewriting the rules of how money moves, how risk is managed, and how customers experience financial services.
Here, we explore 25 trends that are not only gaining momentum in 2025, but are actively shaping the next decade of financial innovation.

1. Pay-by-Bank Goes Mainstream

Account-to-account (A2A) payments—once a niche tech experiment—are now breaking into the mainstream. Driven by lower fees than card networks, instant settlement, and significantly fewer chargebacks, this model is attracting merchants in high-ticket, subscription, and bill-payment sectors.
In the United States, momentum is building with support from the Federal Reserve’s payment modernisation push. Expect to see “Pay by Bank” options embedded directly into major payment gateways, apps, and even in-store terminals, creating a low-cost, frictionless alternative to traditional cards.

2. Real-Time Payments Become Table Stakes

The days of “please allow three working days for settlement” are numbered. Systems like FedNow in the US, UPI in India, and instant SEPA in Europe are making immediate transfers a standard expectation for consumers and SMEs alike.
Regulations such as the EU Instant Payments Regulation are accelerating uptake, with commercial benefits including improved cash flow, reduced customer support load, and increased satisfaction. Providers like ACI Worldwide are already reporting rapid adoption curves across multiple regions.

3. Cross-Border Instant Payments Light Up

The holy grail of payments—cross-border transactions that clear as quickly as domestic ones—is finally in sight. Initiatives like the BIS Project Nexus aim to interconnect domestic instant payment systems, bypassing the slow, opaque correspondent banking chain.
For remittances, B2B settlements, and travel spend, this “network-of-networks” approach promises lower costs, real-time transparency, and near-instant delivery.

4. From Open Banking to Open Finance (and “Smart Data”)

Open banking has delivered account aggregation and faster switching; now, regulators are expanding the scope to pensions, savings, investments, and even utilities.
In the UK, the Joint Regulatory Oversight Committee (JROC) is shaping this next phase, while the EU’s Financial Data Access framework sets common rules for sharing a broader range of financial information. The next generation of fintech aggregators will be built on this “smart data” economy.

5. Embedded Finance Grows Up

The days of launching a Banking-as-a-Service (BaaS) product over a weekend are gone. Compliance expectations are climbing—particularly around onboarding, anti-money laundering (AML), and transaction monitoring.
Winners in this space will balance slick developer integration with rock-solid risk controls, offering merchants and platforms shared services for KYC, fraud prevention, and reconciliation.

6. Wallets Become Identity Layers

Digital wallets are evolving beyond payments to become full authentication hubs. With features like network tokenisation, device-binding, passkeys, and in-wallet verified credentials, they are reducing fraud and checkout friction.
As more verified identity attributes sit inside wallets, expect smoother onboarding for loans, investments, and even regulated trading.

7. Fraud Liability Shifts Reshape the Stack

The UK’s Authorised Push Payment (APP) fraud reimbursement regime is shifting liability from consumers to financial institutions, forcing banks, PSPs, and payment platforms into closer collaboration.
This includes real-time inbound transaction controls, name-matching, mule account detection, and delayed release for suspicious payments—all powered by advanced risk orchestration tools.

8. GenAI Copilots for Financial Workflows

Generative AI is embedding itself in underwriting, compliance, finance operations, and customer service. Financial institutions are standardising prompt libraries, monitoring for bias, and maintaining full audit trails of AI-driven decisions.
Done well, this technology cuts cycle times dramatically and scales expert decision-making across the business.

9. Explainable AI in Credit and Claims

Alternative data sources—such as e-commerce performance or real-time cash-flow analysis—are enabling more inclusive lending and insurance models. But explainability is now a regulatory and ethical must-have.
Emerging tools provide “reason codes” for decisions, challenger models for bias testing, and real-time monitoring to meet new frameworks like the EU AI Act.

10. Tokenised Funds Break the $1B Barrier

Tokenisation of institutional funds—especially cash and money-market strategies—has moved beyond pilot stage. Benefits include 24/7 transferability, programmable dividend distribution, and reduced settlement friction.
Treasurers are increasingly drawn to the operational efficiencies and improved liquidity these digital fund structures offer.

11. Stablecoins: From Wild West to Rulebook

Regulatory clarity is arriving in major markets. The EU’s Markets in Crypto-Assets (MiCA) framework sets clear licensing and reserve standards, while Singapore’s MAS offers a conservative but enabling approach.
Compliant stablecoins are expected to flow into B2B cross-border trade, supply-chain finance, and on-chain settlement.

12. CBDCs Inch Forward—Especially Wholesale

Central banks worldwide are piloting central bank digital currencies (CBDCs), with wholesale models leading the charge for securities settlement, cross-border corridors, and interbank liquidity.
The emphasis is on interoperability and integrating tokenised central bank money into the broader digital asset ecosystem.

13. Tokenised Deposits & Bank Money Rails

Banks are experimenting with deposit tokens—programmable, on-ledger representations of commercial bank money that maintain the same regulatory protections as traditional deposits.
Initial use cases focus on cash management, intraday liquidity optimisation, and settlement across multiple entities.

14. ISO 20022 Becomes the Global Language of Payments

This new messaging standard supports richer, structured data, enabling better fraud screening, reconciliation, and automation.
By November 2025, the cross-border coexistence period will end, making data quality and analytics a board-level concern for payment providers.

15. Reusable Digital Identity & KYC Wallets

The EU Digital Identity Wallet is a benchmark for portable, verifiable credentials—reducing onboarding friction across borders.
Once widely adopted, it will cut customer acquisition costs while improving compliance accuracy, especially in high-value transactions.

16. Privacy-Enhancing Technologies (PETs) Move to Production

Technologies like secure multi-party computation and synthetic data generation are moving from pilots to core compliance infrastructure.
These tools allow institutions to share insights without exposing underlying personal data, making AML and fraud detection more collaborative and effective.

17. Autonomous Finance for SMEs

AI-driven accounts payable and receivable bots can now forecast, reconcile, and execute payments autonomously, surfacing only exceptions for human review.
Tied into real-time rails, these systems enable dynamic discounting and cash-flow smoothing—without relying on loans.

18. B2B Payments Modernise at Last

Virtual cards, supplier portals, and payment orchestration layers are revolutionising the B2B payments space.
Winners will be those who offer cheapest-route execution, enhanced remittance data, and auto-matching tools for reconciliation.

19. Real-Time Treasury & Multi-Bank APIs

Corporate treasurers increasingly demand intraday visibility and programmable liquidity sweeps.
Banks are responding with API-first services, event-based triggers, and unified entitlement management across jurisdictions.

20. RegTech & SupTech Become Continuous Controls

Batch compliance checks are giving way to real-time monitoring for sanctions, politically exposed persons (PEPs), and adverse media.
Regulators themselves are adopting supervisory technology (SupTech) to identify systemic risks earlier.

21. Inclusion at the Edge of the Network

Low-cost acceptance tools—QR codes, offline wallets, and cross-border RTP—are transforming payment access for migrants, micro-merchants, and rural populations.
UPI’s expansion into international corridors is a prime example of this model in action.

22. BNPL 2.0—Regulated and Reported

Buy Now, Pay Later is evolving into fully regulated instalment credit, integrated directly into wallets and banking apps.
Affordability checks and credit bureau reporting will bring stability and longevity to the model, even if margins tighten.

23. Green Fintech & Verifiable Sustainability Data

Environmental impact metrics are being embedded into payment and lending products.
From carbon calculators at checkout to verified sustainability-linked loans, the key differentiator will be the auditability of environmental claims.

24. Passwordless and Liveness Everywhere

Passkeys, behavioural biometrics, and liveness checks are replacing static passwords, reducing account takeover while keeping user experience smooth.
These tools are particularly effective in targeting fraud without blanket friction for all users.

25. Quantum-Safe Cryptography on the Roadmap

With post-quantum cryptography standards emerging, financial institutions are mapping migration plans for payments, custody, and secure communications.
This transition will be gradual but necessary, ensuring resilience against future quantum computing threats.

Why These Pairings Matter

What This Means for Strategy

1. Match innovation with infrastructure – Growth levers like embedded finance or tokenisation must be grounded in strong risk, compliance, and interoperability designs.

2. Use data & identity as conversion wings – Structured messaging (ISO 20022) and reusable identity deliver both efficiency and customer trust.

3. Prioritise explainability & transparency in AI – Build with bias controls, auditability, and regulator alignment from day zero.

4. Bridge, don't silo – The most value lies in interconnected systems—cross-border, cross-asset, cross-platform.