What does fintech future look like in 2025? Here are some critical insights!

The fintech landscape is evolving at unprecedented speed and is actively shaping how we bank, invest, and manage money.

As 2025 approaches, disruptive technologies, regulatory shifts, and consumer demands are driving major changes in the fintech future.

From AI-powered solutions to embedded finance, this article explores the top 10 fintech trends set to redefine the financial ecosystem in the coming year. 

Fintech future during economic uncertainty: Increased reliance

The spread of COVID-19 led to a significant increase in finance app downloads and, consequentially, the mass adoption of fintech. In recent years after COVID-19, fintech has continued to expand as it matches the rising need for convenient and digital-first financial solutions. Today, the average fintech user has 3-4 apps on their devices. 

With rising inflation and financial uncertainty, fintech apps have become trusted assistants at users’ fingertips that can be accessed almost anywhere and anytime. This particularly appeals to tech-savvy millennials and Gen Z, who prioritize ease of access and user-friendly interfaces.  

With helpful features such as budgeting, expense tracking, bill paying, and investment, these apps help users with varying needs navigate these challenges and manage their finances more effectively. 55% of consumers report having seen positive changes by adopting this approach.  

In 2025, here are the emerging trends in fintech that business decision-makers and users should be aware of.

New payment technologies and methods 

The rapid advancement of new technologies has changed the way we exchange money. As a result, the fintech future is characterized by innovative and centralized payment methods that are available alongside traditional approaches, all with a heightened emphasis on convenience and security. 

Digital wallets and mobile payments 

Global cash usage has been steadily decreasing by 4% per year and it is expected to continue dropping across different regions. 

• In developing markets with low card penetration rates (such as Indonesia, India, and Malaysia), digitally-driven payments will replace cash payments at a fast rate. By 2028, as little as less than 10% of consumer spending will be by cash.
• In markets such as the US, where transactions are largely card-based, cash usage will continue to decline progressively.
• In developed economies with a strong preference for cash, which is largely driven by cultural factors, such as in Japan and Germany, cash payments are also expected to become less common. 

As a result, digital payments will become the new norm. As the global adoption of digital public infrastructure grows, it also gives rise to inclusive, easy-to–use, and highly efficient digital payments ecosystems in both developed and developing economies.  

Contactless payments

Contactless payments are quickly becoming the preferred transaction method for consumers worldwide in the new innovation-driven fintech future. 

Speed and convenience are among the primary drivers of the rise in contactless payment. A simple tap on the payment terminal completes the transaction in seconds, which is particularly beneficial in high-traffic settings such as grocery stores, public transportation, and retail outlets, where quick payment processes are essential. 

Contactless payments also have enhanced security features. Each transaction generates a unique, one-time code that protects the cardholder’s information from being intercepted or reused. This makes them significantly more secure than traditional magnetic stripe cards, which store static information susceptible to cloning or fraud. 

Many major card issuers are now providing contactless cards as their default offering. This shift makes contactless payments widely accessible. 

Contactless payments also match the post-Covid lifestyle changes, as hygiene and minimal contact become more prioritized. For many consumers, these factors have become a permanent preference. 

Buy-now-pay-later (BNPL) options 

In the fintech future, BNPL is gaining popularity as it allows consumers to delay payments for a short period after making a purchase. 

The growth of BNPL is largely driven by advanced digital platforms and infrastructures that provide robust monitoring and management tools for both consumers and lenders. Nowadays, BNPL services are connected to users’ debit or credit cards to monitor credit and help consumers make informed purchases.

Cryptocurrency and cross-border digital payments 

Cryptocurrencies are emerging as new forms of digital currency and a key factor to unlock an unprecedented level of speed, security, and accessibility. 

The key advantages often associated with cryptocurrencies are: 

• Reduced reliance on intermediaries such as banks or payment processors, which likely reduces fees and accelerates processing time
• Enhanced accessibility thanks to blockchain’s decentralized nature, which allows people in underbanked or unbanked markets to participate and use services 

As interest in cryptocurrencies and cross-border digital payments continues to grow, they have the potential to revolutionize global commerce, making it faster, cheaper, and more inclusive. 

Peer-to-peer (P2P) payments 

P2P payment platforms such as Stax, Venmo, PayPal, and Cash App have become household names in fintech because they significantly simplify financial interactions between people. 

The biggest advantage of these platforms is they allow for easy splitting of bills, repaying debts, and instant money transfers between individuals. Along with their instant or near-instant transfer speed, they are indispensable tools for millions of users, from tech-savvy younger generations to more mature individuals.

Identity verification solutions to become more advanced and up-to-date 

Fintech future includes more than just advancements and new tools. As financial fraud is becoming increasingly sophisticated, identity verification solutions are advancing rapidly to keep up. These innovations are essential in safeguarding both consumers and businesses against evolving threats in the digital financial ecosystem. 

Cutting-edge technologies such as biometric authentication (facial recognition and fingerprint scanning) are becoming a standard for verifying user identity. Similarly, AI-powered tools are also leveraged to analyze behavioral patterns to detect anomalies, flagging potential fraud attempts in real time. 

However, it is also important to maintain a balance between robust security and a seamless user experience. Modern solutions aim to streamline the verification process to allow users to access services effortlessly while potential threats are effectively neutralized. 

Growing AI adoption  

AI adoption is increasing rapidly across different fields, including banking, wealth management, insurance, and payments. Private equity firms still are at the forefront, with 97% of them reporting having leveraged AI, significantly outpacing the 76% of mid-sized company CFOs who utilize it. 

The versatility of AI is evident in the variety of its fintech-related applications.

• Cash flow forecasting: AI tools provide precise cash flow predictions, enabling companies to optimize their financial planning and allocate resources effectively.
• Financial analysis: By processing vast amounts of data, AI delivers actionable insights that support better investment strategies and financial decisions.
• Payment automation: AI streamlines payment processes, reducing manual workloads and enhancing transaction speed and accuracy.
• Fraud detection: Advanced AI algorithms monitor transactions in real-time, identifying unusual patterns and preventing fraudulent activities before they escalate.
• Risk assessment: AI-powered models assess credit risk and market volatility with unparalleled accuracy, helping financial institutions manage exposure and make informed lending decisions.

Alternatives to credit score 

In the US, the reliance on traditional credit scores has left an estimated 49 million Americans without access to critical financial opportunities, such as loans, housing, or even employment. 

This disproportionately impacts groups like young adults, recent immigrants, and the underbanked. Moreover, a significant majority—63% of Americans—believe that credit scores fail to capture the full complexity of their financial situations. This challenge can also be present in other economies.

Therefore, an emerging fintech trend is instead of focusing solely on credit scores, lenders can consider factors like cash flow, income records, and payment histories for utilities, offering a more comprehensive view of a borrower’s financial health. 

Embedded finance 

Embedded finance refers to the integration of financial services and products into non-financial companies’ platforms and applications. It allows customers to access banking and financial services directly through familiar digital channels like e-commerce sites, social media apps, or other online platforms. 

The embedded finance market is experiencing rapid growth on a global scale. In Europe, the market generated an estimated €20-30 billion in revenue in 2023, accounting for approximately 3% of total banking revenues. By 2030, this figure is projected to surge to €100 billion. 

Additionally, embedded finance channels are predicted to drive significant transformation in retail banking, increasing their share of retail banking sales and lending volumes from the current 5-10% to an estimated 20-25% by 2030.  

Intensifying regulation 

The fintech industry is facing significant regulatory scrutiny, particularly with the upcoming implementation of the Digital Operational Resilience Act (DORA) in the EU. This trend reflects a broader global movement towards stricter oversight of financial institutions and their technological infrastructure. 

In addition, the regulatory landscape has become increasingly complex due to differences in requirements across various jurisdictions. Financial institutions operating globally must navigate multiple regulatory frameworks simultaneously. For instance, while DORA applies to EU member states, organizations may also be subject to regulations in other regions, such as the United States. 

This complexity increases compliance challenges for financial institutions. Therefore, they require them to maintain sophisticated regulatory compliance programs that can adapt to varying requirements across different jurisdictions.  

Blockchain mainstream adoption 

Blockchain technology is poised to be a major driver in the fintech future due to its decentralized nature and various use cases across industries. 

Tokenization of assets 

A recent estimate suggests that by 2027, approximately 10% of global GDP could be tokenized on blockchain.  

Tokenization allows for the digitization of assets, making them tradable on blockchain networks. This process can significantly reduce transaction costs, increase liquidity, and provide greater accessibility to financial markets. 

Increased speed and security for transaction 

Blockchain technology offers significant advantages over traditional transaction methods, particularly in terms of speed and security.   

The decentralized nature of blockchain ensures that transactions are recorded on multiple nodes simultaneously, creating an immutable ledger. This distributed architecture makes it virtually impossible to alter historical records, thus enhancing security and trust in the system. 

Streamlining processes with smart contracts 

One of the most exciting applications of blockchain technology in fintech is the potential for smart contracts to streamline various processes across industries. Smart contracts are self-executing contracts with the terms of the agreement written directly into lines of code. 

In the context of Know Your Customer (KYC) processes, smart contracts could potentially automate and simplify KYC procedures. This could lead to faster onboarding times, reduced compliance costs, and improved accuracy in identity verification. 

For instance, a smart contract could be programmed to automatically verify customer information against various databases and regulatory requirements. Once verified, it could trigger the release of funds or activation of services without human intervention. 

This automation could significantly reduce the time and resources required for KYC processes. Therefore, it makes financial services more accessible to a wider range of customers while maintaining stringent security standards. 

Open Banking transforming transactions globally 

Open Banking, a revolutionary concept in financial services, is experiencing explosive growth worldwide. The impact of Open Banking extends far beyond traditional banking boundaries, influencing various sectors of the financial ecosystem. 

Open banking, also referred to as “open bank data,” is a practice that grants third-party financial service providers access to consumer banking, transactions, and other financial data. This access is facilitated through the use of application programming interfaces (APIs), enabling seamless data sharing between banks, non-bank financial institutions, and authorized third parties. 

Closing remark

As the financial world continues its rapid evolution, the upcoming advancements in technology promise unparalleled opportunities for growth, inclusivity, and efficiency. By embracing these advancements, businesses and consumers alike can navigate the complexities of a changing economic landscape with greater confidence and resilience.

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