Five key trends for the banking industry in 2025

Like many sectors, banks are facing opportunities and challenges from fast-moving technology, changing consumer behaviour, and political upheaval.

We know from Edleman’s 2024 Global Trust Barometer that most of us fear that both technology and society are changing too quickly in ways that don’t benefit individuals. When it comes to AI, it’s at a crossroads, where there are equal levels of enthusiasm and resistance for what it could mean for our future.

So, as we start the New Year, what does all this mean for the UK’s banking sector? How can banks continue to innovate, stay competitive, and ensure they’re protecting their customers’ best interests and money?

Zempler Bank take you through their five key trends for the UK banking sector in 2025.

1. High street and digital banks will look to each other

Over the last few years, we’ve seen big corporates invest in their banking offering. Global heavyweights like Apple are already established in their banking offering, the ‘buy now, pay later’ giant Klarna made the move into banking last year, and there have been lots of whispers that Amazon might do the same in the future. Today, it’s not just about high street versus digital bank – the landscape is becoming more competitive and it’s likely that big tech is going to grab more of the banking pie.

Digital banking offers people a fast and reliable way of setting up a bank account and doing all banking online and in-app. If you’re with a digital bank you can manage your money anytime, anywhere in the world, without having to go into a physical branch.

Search for bank accounts online and you will find plenty of high street and digital banks on the market. But as we all know digital banks are growing fast. This year, high street banks will need to continue to invest in their digital offering to ensure they don’t lose existing customers and can attract new customers who are looking for quick, easy, and reliable banking.

Digital banks will also continue to invest in their customer service offering to ensure that even if they don’t have a face-to-face offering, they aren’t ‘faceless’. This could be through continued investment in telephone customer service, in-app, and Online Banking help.

2. Banks will continue the fight against financial crime  

It’s just over 30 years since the first anti-money laundering regulations came into play in the UK. Today, financial crime looks very different to how it did in 1994.  It’s becoming more common, sophisticated, and unpredictable.

Banks are at the forefront of efforts to tackle increasingly sophisticated fraud. The recent APP fraud regulation changes have seen a conscious effort to ensure consumers are protected through mandatory reimbursement.

There has already been some pushback from the banking industry, who have called for big tech firms to also be held accountable for where fraud often originates from. The reality is that banks will need to ensure they’re able to apply the new regulations properly, as they could face heavy claims from customers if they don’t.

This means that 2025 will bring even more investment in properly interconnected operations systems and skilled teams. There will also be efforts to look at individual customer lifecycles, to ensure there are always proper points set-up to automate risk after someone becomes a customer.

Banks will also invest more in educating their customers to ensure they’re becoming savvier at being able to spot a potential problem and report an incident quickly if something has happened.

3. AI could be a best friend to banks

Accenture’s 2024 Banking on AI report highlights that banking is likely to be profoundly impacted by AI more than any other industry. AI has the power to help banks in nearly every department and it’s still in its infancy.

One of the most interesting developments is a move away from just servicing customers queries and complaints, to engaging in more meaningful conversations and dialogue with customers by understanding their needs and hyper-personalising their experiences.

This is about more than just providing customers with basic digital needs like checking account balances and transferring money and looks at how they can help customers improve their financial goals and life ambitions.

4. Banking regulation could be redesigned  

Banks have been heavily regulated for a long time, but this understandably increased significantly in the wake of the 2008 financial crisis. Banks spend huge amounts of time and resource on ensuring they’re keeping up with regulation standards, and smaller banks can face a high proportional impact.

The new UK Labour government has signalled that it wants to simplify banking regulation, to minimise overlap between different regulators and ensure that the sector can help to drive economic growth, while still properly managing risks. This could involve a move away from complicated and unmanageable regulation to a more streamlined approach over the coming years.

5. Banks will up the investment in their people

The world is changing fast, and the kinds of roles that banks will require in the future are going to change too. This year, banks will continue to look to the future and ask themselves questions about the kinds of roles that are needed that don’t even exist now.

This will mean bridging the skills gap that holds so many organisations back from properly maximising on the benefits of AI. Banks will need to take their people through this journey of upskilling and reskilling and ensuring that the right people are in the right roles.

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