Artificial intelligence, AI, was a big topic for private banking and wealth management in 2024 and into 2025. This shows no sign of changing as the technology evolves and brings greater value to both clients and institutions. So what comes next? And will AI hit its private banking ceiling in 2025? PBI asks the experts
Scott Dawson, CEO, DECTA
AI has been the overwhelming press story of the past two years, with companies like Kraft Heinz, Coca Cola and McDonalds all beginning to use generative AI, with decidedly mixed results. The initial excitement has largely died down, and more people are asking what AI can really do beyond creating unsettling images. Goldman Sachs went from predicting that Generative AI could raise global GDP by 7% in April of 2024 to saying that it had ‘too much spend (for) too little benefit’ in June. A new study has shown that ‘When AI is mentioned, it tends to lower emotional trust, which in turn decreases purchase intentions’. Hallucinations have made one of its only business-focussed features, the ability to create summaries, no longer fit for task. The term ‘AI Slop’ has become a ubiquitous shorthand for the surreal, disturbing images and videos that are flooding social media.
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So, is there going to be an AI backlash? Not exactly – AI is used every time you make a payment, see an online ad or talk to a smart speaker – it is absolutely a part of our lives and definitely a part of the payments ecosystem. The issue is that a specific type of artificial intelligence (generative AI) has very limited applications and very few paths to profitability, either for the companies developing it or the companies using it.
Is AI here to stay? Absolutely. Will there be exciting, surprising and controversial developments in the near future? Definitely. But its groundbreaking, world changing development is yet to come.
Mark Campbell, head, Isio Wealth Planning
2025 is set to be a year of reflection and recalibration for the wealth planning industry. The Government’s recent Budget introduced significant changes, from the freezing of inheritance tax thresholds to higher capital gains tax rates and the inclusion of pensions in estates for IHT purposes from 2027. Next year will be key for unpacking the details of these changes, understanding how they will be administrated, and ensuring the industry is equipped to handle them effectively. Without this clarity, it’s difficult for clients to make fully informed decisions – practicalities need to be set out sooner rather than later.
For the sector, 2025 will likely be businesses as usual – the focus will be on getting the basics right. Clients need well-diversified portfolios, appropriate asset allocation, and enough liquidity to weather ongoing volatility. The challenge is preparing for these changes while staying calm and focused on the fundamentals – avoiding knee-jerk reactions that could undermine outcomes while ensuring long-term stability.
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By GlobalDataThe inclusion of pensions in estates for IHT purposes from 2027 is already sparking discussions. For many clients, pensions are one of their most significant assets, so this shift is forcing a rethink about how they approach estate planning. For those caught out by the changes, especially those with limited time to act, it’s essential to have the right guidance and structures in place as soon as possible as we head into 2025.
At the same time, we expect to continue to see AI becoming increasingly integral to wealth planning next year, both in terms of improving business efficiency and offering investment opportunities. AI tools will continue to enhance processes, improve reporting, and support better client outcomes. The growth of AI will also continue to present significant long-term investment opportunities, the potential for growth in tech-related investments is clear. For wealth managers, focusing on technology-driven solutions and integrating them into client portfolios can offer the opportunity to capture growth in an evolving market. While markets may not repeat themselves, they do rhyme – staying calm, sticking to the fundamentals, and maintaining a long-term view will be key to navigating 2025 successfully for the sector.
Jamil Jiva, Global Head of Asset Management, Linedata
As we leave 2024 behind, the financial industry is poised for a profound technological transformation, with artificial intelligence set to transform industry practices. From risk management and regulatory compliance to predictive analytics and cybersecurity, AI promises to bring a new era of transparency, efficiency and innovation to the finance ecosystem. Artificial intelligence looks set to become more explainable (XAI), and RegTech and advanced predictive analytics will no longer be mere buzzwords, but the pillars of a more ethical, secure and successful finance:
Explainable AI: towards more transparent and ethical finance
The widespread adoption of Explainable Artificial Intelligence (XAI) in risk assessment and management systems marks a decisive turning point. This technology is finally lifting the veil on the “black box” of algorithms behind AI inference systems, offering a clear understanding of AI decision-making processes. This creates an opportunity for financial institutions to renew and reinforce the confidence of customers and regulators while improving the accuracy of their risk models.
RegTech: automation at the service of compliance
The development of “RegTech” solutions based on machine learning promises to revolutionise regulatory compliance. These tools will enable financial institutions to automate compliance with constantly evolving standards in real-time. The industry is increasingly seeking to replace tedious audits and after-the-fact compliance with continuous, frictionless adaptation to regulatory requirements.
Predictive analytics: anticipate for better investment
Predictive analytics platforms using AI to anticipate market trends and investor behaviors are emerging as indispensable tools. These technologies give asset managers and traders a head start, enabling them to make informed decisions in an increasingly complex and volatile market environment.
Autonomous cybersecurity: intelligent protection against threats
In the face of increasingly sophisticated cyber-attacks, AI-based autonomous cybersecurity solutions are becoming a must. These systems, capable of detecting and neutralising threats in real time, offer dynamic, scalable protection for financial IT infrastructure. The era of reactive cybersecurity is coming to an end, giving way to a proactive, intelligent approach.
The unstructured data revolution
The widespread emergence of RAG (Retrieval-Augmented Generation) systems for managing unstructured data is opening up new horizons. These technologies make it possible to tap into a wealth of previously unexploited information, giving financial institutions a deeper understanding of their environment and their customers.
Operational efficiency: the silent engine of transformation
Although less visible, improving operational efficiency through AI is shaping up to be a major transformative trend. Automating processes, optimising resources and reducing operational costs will enable financial institutions to become more agile and competitive.
2025 promises to be a turning point for the fintech sector. Artificial intelligence, more transparent and ethical, will be the driving force behind a profound and lasting transformation. It’s not just about improving existing processes. It paves the way for more responsible, inclusive and resilient finance. Explainable AI, RegTech and advanced predictive analytics will not only optimise performance, but also boost the confidence of customers and regulators. However, this transformation will not be without its challenges. Ethical, governance and data protection issues will remain at the forefront. It will be crucial for industry players to strike the right balance between innovation and responsibility. As we head towards 2025, one thing is certain: tomorrow’s finance will be smarter, more transparent and more aligned with society’s needs.
Laurent Descout, co-founder and CEO, Neo
PSPs have historically relied on traditional banking partners to operate their businesses and to deliver their core services. However, these relationships have been fraught with challenges, hindering their ability to operate efficiently and meet market demands.
At a time when digital payments are accelerating, PSPs can no longer afford to accept the outdated and slow processes which traditional banks continue to provide.
More concerningly, they also can’t accept the uncertainty of potential account closures or restrictions which new research has found that 95% of PSPs have faced, often without clear communication.
The good news is that PSPs now have alternative options with fintechs reshaping the market, driving competition, and setting new benchmarks for efficiency and service. In 2025, we should expect more PSPs to shift towards fintech partners, with 75% of PSPs actively exploring fintech solutions this year.
Many financial institutions and industry stakeholders now see the huge potential of stablecoins and the benefits they could bring from bypassing the inefficient and slow processes of traditional payments to the increased security, recordkeeping, and transparency.
As a result, legislation is coming down the tracks fast. The UK has stepped up its efforts to redefine the rules around staking and there’s hope that the US Congress could advance stablecoin laws before the end of the year.
While it’s too early to say if stablecoins will eventually replace traditional forms of payments, treasurers must be prepared for increased adoption in 2025. They should read up and stay abreast of the latest developments and start having conversations about their viability and digital wallets which allow them to hold and utilise them. Those who don’t, risk being left behind.
While 2023 saw the boom of AI and large language models, this year we saw how industries are being transformed by using the technology and the payments industry is no different. AI is improving the analytic capabilities of payment firms, meaning thousands of transactions can be checked in a couple of seconds.
The technology now extends beyond chatbots and digital assistants, encompassing areas such as fraud detection and prevention, as well as investment management. However, achieving the right balance between human interaction and maturing technologies requires careful thought.
We should also look to 2010 when banks spent huge amounts to cope with the first wave of fintech innovation, which didn’t exactly work out for them. Given banks are risk-averse institutions, there are also plenty of challenges around AI that need to be thoroughly examined first, such as data protection, before banks commit to further AI adoption in 2025.
In 2024, currency volatility remained a top concern for businesses as geopolitical tensions, monetary policy shifts and economic uncertainty shaped the global landscape. From the pound’s challenges post-U.S. election to rising hedging costs, FX risks are pressing—and treasurers must shift from reactive to proactive FX risk management strategies.
Traditional reliance on banks often results in poor pricing, slow execution, and outdated tools, leaving SMEs particularly exposed to currency fluctuations. Thankfully, fintech solutions offer a smarter alternative, providing real-time insights, better pricing models, and seamless integration with financial systems. These innovations empower treasurers to lock in exchange rates, hedge effectively, and align risk management with cash flow forecasting.
In today’s volatile markets, robust FX hedging is essential for financial resilience and sustainable growth. In 2025, we will continue to see the adoption of modern tools so businesses can protect profitability, navigate uncertainty, and seize opportunities. The stakes are high—those who fail to adapt risk falling behind.
Simona Covaliu, Chief Risk Officer, PayU GPO
Heightened requirements around digital resilience, supply chain stability, and cybersecurity will lead to an explosion in compliance obligations, substantially increasing costs for organisations. Traditional approaches to risk management will no longer suffice, and the cost to business would be insurmountable if they don’t implement robust controls by design, that minimise technical and compliance debt.
AI will play a dual role as both a solution and a regulatory focus area. In the EU, anticipated regulations will place stricter constraints on AI’s role in business decision-making and consumer protection. These changes will dictate the integration of AI-related risks into existing risk management frameworks, ensuring that AI technologies are implemented responsibly and transparently.
ESG guidelines will further drive regulatory innovation. Companies will need to embed ESG considerations into their risk management processes, moving beyond compliance to address societal expectations. Risk scenarios tied to ESG will demand vigorous identification, assessment, and mitigation strategies, changing how organisations approach long-term planning and investment frameworks.
However, that’s not all. Global privacy regulations, increasingly aligned with EU standards, will add another layer of complexity. Companies operating internationally must develop real-time compliance systems and prioritise “compliance by design” to manage cross-border regulatory demands. Organisations that proactively adopt integrated, AI-enhanced approaches will be better positioned to navigate these shifts, ensuring resilience and competitiveness in the evolving financial landscape.
Dharmesh Ghedia, Technical Director, Qodea
2025 will be the year of the big database migration.
Many financial institutions rely on legacy database systems but over the next year, the financial services sector will be pushed towards data and database modernisation to harness AI’s full potential − a technology that relies heavily on a robust data foundation. Banks have historically been hesitant to overhaul their databases, concerned about the cost, effort and risks involved. However, banks will find that their outdated systems limit the effectiveness of AI to improve customer experience, security, and fraud.
While financial institutions have widely adopted cloud and SaaS solutions, database migration has often been pushed aside due to the complexity and perceived risks. In 2025, banks will realise the risk brought by avoiding modernising databases becomes greater risk than if they don’t. By migrating databases to the cloud, banks will be better positioned to capitalise on centralised data, take advantage of emerging technologies and drive innovation more effectively. This will ultimately transform banks’ operational resilience and enhance their abilities within regulatory compliance and security whilst also optimising cost by the move from complex on-premise databases to the cloud and leveraging the scalability it provides.
Customer experience will actually improve
In 2025, the banking experience for customers is going to undergo further transformation. Rather than the limited, one-size-fits-all digital interactions of the past, banks will offer customers hyper-personalised experiences to retain customers from the threat of challenger brands. By leaning on AI, banks will be able to tailor services based on an individual’s banking habits and preferences. For instance, AI will allow banks to recognise specific budgeting behaviours or recurring activities, offering tailored advice and guidance. Moreover, banks will be able to use AI agents to alert and provide customers with information to reduce fraud or make them aware of new services and features.
Hyper-personalisation in banking opens up a great deal of new possibilities. Customers will be able to have greater control over the services they receive, which feel not only be personalised but also protective. However, striking the balance between automation and trust will be key. Banks will need to help customers feel confident in interacting with AI agents while still giving them the option to speak to a representative. In 2025, the banks that leverage AI to empower customers without completely taking away human interaction will offer the best experience.
AI will intensify the cybersecurity arms race in 2025
In 2025, the AI cyber arms race will only intensify as both financial services organisations and attackers accelerate AI adoption. Instead of relying on call centre cons, fraudsters will be able to scale operations through AI, deepfakes and bots, helping them to execute scams more easily, at scale and at a lower cost. In one case this year, engineering group Arup lost $25mn after fraudsters digitally cloned a senior manager to order financial transfers during a video conference. The threat level is only going to increase in 2025, making customer security harder for banks.
However, these emerging technologies will also be a game-changer for financial services organisations, ensuring faster and more precise fraud and anti-money laundering (AML) detection. While machine learning (ML) has been used in fraud detection for years, tuning issues have limited how effective it really is. In 2025, more refined AI models are expected to streamline this process, filtering, and prioritising high-risk cases for human investigators to review. Human investigators will see a huge cut in the cases they need to review, by detecting suspicious, potential money laundering activity faster and more precisely with AI. AI-driven AML systems will also function as real-time triage tools, constantly assessing threat activity, flagging anomalies, and escalating critical cases for human intervention or AI-initiated actions.
As threat actors take advantage of the opportunities AI offers with both hands, financial services organisations must also use the technology to boost threat and fraud detection. In such a high-stakes environment, if you’re a financial services organisation not in the AI arms race, you’re losing it.
Tom Hewson, CEO, RedCompass Labs
The rate of change in payments has never been this fast and will never be this slow again. 2025 will be no different.
Next year, AI models that can draw from formerly untapped human expertise will arrive. Payments knowledge that lives behind firewalls (regulatory and bank documentation) and within payment experts’ heads will be used to train large language models. With the help of AI assistants, payment experts will prepare, review, and deliver documentation for payments modernisation projects in half the time and at half the cost.
Multi-agent AI models tuned for accuracy, not speed, will work 24/7. Free from the mundanity of typing, analysts can focus on design and review. The productivity and time benefits will be enormous – but they will be enjoyed only by those who have Applied AI, trained and tuned specifically for payment modernisation, led and guaranteed by payment experts.
As a bank, if you don’t embrace AI in 2025, you will face bigger costs and slower change than those you are competing with. But if you leverage the billions invested in AI, use the tools available, and gather industry knowledge, you have a chance to keep up with the rate of change.
Dana Lunberry, Head of Data Strategy, SBS
Data analytics, fuelled by advanced AI, will grow as a core executive priority for banks and financial institutions.
Although banks have ample data, they have historically lacked the systems and processes to leverage it effectively. However, recent technological advancements have changed this landscape. In the coming year, we’ll see financial organisations investing more heavily in modernising their data infrastructure.
For many, this will include enhancing data management capabilities so that AI-driven tools, such as generative AI and machine learning models, can effectively personalise customer experiences, optimise risk management, and automate compliance—enabling a shift from reactive data handling to proactive, predictive decision-making. AI-powered data warehouses and real-time analytics platforms now allow institutions to derive deep customer insights rapidly, scaling and adapting services at speeds unimaginable a decade ago. This evolution will enable banks to transform decades of legacy information and new data streams into innovative products, services, and experiences, creating a significant competitive advantage.
Faisal Husain, CEO, Synechron
Next year’s business environment will demand sharper focus and faster adaptability as technology advances and market demands shift. Businesses will need to think beyond immediate challenges and prepare for long-term growth.
On the economic side, interest rates, which have remained high for the past two years, should boost investment as the Fed likely continues to cut. This will help fuel more mergers and acquisitions, modernisation projects by large companies and renewed spending on innovation, all of which should help drive business for technology consulting firms.
With the incoming administration, there are some potential opportunities depending on how AI and crypto regulations potentially change. At the same time, we also expect more of a focus (and spending) on cybersecurity.
As many of our clients are moving from experimentation to adoption of AI, this new landscape will require much more advice and support as they strive for implementation of these new products.
For us, this means helping our clients anticipate change and seize opportunities. After the most significant transformation in our company’s history – expanding into new geographies and capabilities via several strategic acquisitions – we’re exceptionally prepared to address the growing need for innovative, AI-driven solutions and robust cybersecurity strategies.
Roman Eloshvili, founder and CEO, XData Group
The banking industry finds itself at a turning point, and one the most definitive trends currently transforming it is artificial intelligence. By automating and speeding up various operational elements, such as compliance, customer support, and cybersecurity, AI will make banks more agile and efficient. Agentic AI, in particular, will have a role to play. Its ability to act independently could further streamline decision-making and democratise access to advanced financial tools.
Another major influence is the growing presence of Gen Z in finance, who are a very tech-savvy generation and whose preferences in banking operations lean towards digital experiences. They are interested in seamless solutions that come in mobile-first packages, with instant support, and personalised perks. To connect with them, banks will have to shift gears and prioritise user-friendly apps and a strong online presence. Partnerships with fintech companies will also be beneficial if they want to roll out innovative services with greater speed.
And continuing from the previous point, the rivalry between banks and fintechs, in general, will likely give way to collaboration. Fintech teams understand the flexibility of services a lot better than many old-school banks, and the latter can leverage this feature to their benefit, minimising the need to overhaul legacy systems altogether. Such collaborations will be particularly helpful for smaller banks that do not have many resources to work with, allowing them to stay competitive even against larger-scale competitors.
