Growing financial services to new heights in 2025: Top predictions

Helena Müller, VP Banking Europe, Diebold Nixdorf

The financial services industry remains under immense pressure, which will undoubtedly continue into the coming year. Balancing costs and risk in an increasingly competitive market with the need for progression and transformation is a complex challenge. Alongside this, the identities of financial institutions are evolving as the boundaries of traditional banking dissolve. Consumer expectations on the role and delivery of services continue to mature, driving new agendas and influencing strategic decisions across the industry. With this in mind, what are the top areas of focus for the financial services industry for 2025?

Customer, customer, customer

It would be amiss to start with anything other than the customer. Improving customer experience, offering secure solutions and fostering greater loyalty have long been core focuses, and as we move into another year, there will be a laser focus on these topics. Consumers are increasingly intolerant of disconnected and vulnerable banking experiences, and we will see meaningful progress this year. The concept of omnichannel experiences has been discussed for many years, but truly seamless experiences are still not the standard, creating opportunities for competitive advantage.

As the role and identity of financial institutions remain in a state of evolution this year, a more holistic approach to the customer is also required. With the rise of digital solutions and self-service banking, financial decisions are required to be made in real time throughout a person’s daily life. Therefore, financial literacy and consumer education are increasingly important as part of a financial institution’s customer-based strategy and offering.

Simply put, the basic provision of services is no longer enough. Across the industry this year, we will see a heightened urgency on customer-focused progress to maintain the core of trust needed for growth, profitability and consumer loyalty.

Competing creatively

Competitive complexity is a topic that will persist. Competition will continue to intensify as non-banks integrate financial services into other offerings. In some cases, the ability of non-traditional players to compete in the banking arena is creating waves of new entrants, but in other cases, it is also driving market consolidation. Navigating the complexities of industry demands alongside consumer needs in a profitable way is hugely challenging and often only allows the strongest organisations to survive.

To drive growth, products and services need to add tangible value to a customer, alongside removing any friction or barriers when using those services. The delivery of this is two-fold. In the back end, modern and efficient technology stacks and solutions are needed for seamless integration, speed to market and the ability to be agile and pivot quickly. In many countries we are seeing the rise of expanded strategic technology and innovation partnerships to deliver a solid long-term foundation for this. On the front end, data-backed experiences, adopting hyper-personalisation and implementing user-friendly journeys are required to remain competitive.

Sustainability spotlight

As the going green agenda continues to propel organisations into new ways of working, the focus on sustainability will continue to dominate. Research shows that sustainability will be a driving priority for 70% of millennials and Gen Z, alongside 70% of consumers in emerging markets, when making purchasing decisions in 2025.

In line with this, accurate reporting will become more important. The ability to shift from a high-level focus to tangible and meaningful results will establish the difference between those organisations creating genuine change for good and those falling short.

With stricter ESG regulation likely to be on the horizon, building organisational accountability now will allow financial institutions to leapfrog ahead and build greater competitive resilience as consumers make conscious-based choices this year and beyond.

Tying ESG priorities into strategic decisions, as well as current and future product offerings, ultimately loops back to the topic of trust. Acting with intention and integrity will elevate brand identities and nurture more meaningful relationships.

Lean and keen

Operational efficiency initiatives will also continue to be a top strategic priority. The drive for streamlining processes and ways of working is nothing new, but a renewed focus will play a significant role in the 2025 agenda for many organisations. The need for future-proofed decisions on cost efficiencies based on longer-term outlooks has never been more important. To achieve this, data will play a valuable role. Utilising data more effectively will not only allow organisations to make informed investment decisions to remain profitable and relevant but can highlight potential efficiency hotspots and areas for simplification and cost saving.

Adopting a lean mindset supports another time-consuming aspect of daily operations – regulation and compliance. Regulations, such as the Digital Operational Resilience Act (DORA), are currently in the spotlight as operational resilience and IT security become increasingly critical. Introducing or modernising solutions where compliance is ‘baked in’ will help simplify audit processes and create the platform for more flexible and resilient product offerings and enterprise management for the future. Slow progress or failure to act in this area will create organisational risk and potential reputational damage, highlighting the importance of a future-ready mindset.

In summary, 2025 has the potential for growth and embracing opportunities, provided the right strategies are in place. Keeping the customer at the core of all decisions is essential. This foundation should be reinforced by a commitment to embracing technological innovation, leveraging the power of data, keeping a sharp eye on competition and regulation, and, of course, ensuring operational efficiency. The moment for the financial services industry to secure customer value and maintain a key role in consumers’ daily lives is now.

Helena Müller, VP Banking Europe, Diebold Nixdorf