What’s the future of the BFSI sector? If 2024 was about AI adoption, 2025 will be about the stronger push for not just AI inclusion but also integration of tools like predictive analysis and hyperpersonalisation that aims towards. Collaboration, cybersecurity and consumer protection are some of themes driving growth, as we see. Financial inclusion is a constantly evolving concept and here is a look at how the industry is mapping its growth chart going forward.
Khurshed Dordi, Group COO, Deutsche Bank, India, pointed out that the banking industry in 2025 will be defined by technological innovation, sustainability imperatives, and collaborative ecosystems. “AI-powered solutions will revolutionize banking by enhancing operational efficiency, enabling predictive risk management, and delivering hyper-personalized customer experiences. The integration of tools like predictive analytics and multi-lingual interfaces will further empower banks to navigate complex regulatory landscapes while addressing the evolving needs of diverse markets.”
Another trend that he believes will be critical in shaping the future of banking is collaboration, “Partnerships with FinTechs are already enabling the development of innovative solutions, such as real-time payment systems, which improve efficiency and financial accessibility. These synergies will continue to drive ecosystem growth and innovation in the years ahead.” To his mind, Private Equity activity and consolidation in financial services are opening new avenues for banks to scale their operations, expand into emerging markets, and acquire niche capabilities. “Coupled with advances in digital transformation, such as cloud adoption and advanced analytics, banks are well-positioned to modernize their offerings while strengthening cybersecurity frameworks to support cross-border transactions.”
Advancement of Artificial Intelligence and Generative AI
AI & Gen AI will continue to evolve and potentially disrupt many of the banking processes. Banks will have to have a robust AI Strategy and AI playbook to navigate through these new age tech advancements.
Sanjay Agarwal, Founder,MD & CEO, AU Small Finance Bank said, “Till now, we have seen use cases around customer service getting adopted at a wider scale across banking but going forward, its adoption into credit decisioning, Fraud detection, Reg-tech will result in significant operational efficiency in Banking operations.”
According to him, “Small finance banks will play a vital role in promoting financial inclusion in 2025. With their focus on serving underserved markets, these banks will leverage technology to provide accessible, affordable, and tailored financial services to marginalized communities.”
“Digital Lending 2.0: Digital lending is the future and will continue to revolutionize the banking sector in 2025. With AI-driven credit scoring, blockchain-based security, and mobile-first interfaces, digital lending platforms will become more sophisticated, secure, and user-friendly and Banks will need to learn and adapt to this medium while not compromising on core lending principles of underwriting and end-use monitoring,” he added.
Sustainability and ESG
According to Dordi, sustainability is no longer a compliance-driven agenda but a core driver of business strategy, “The shift toward ESG-focused growth, offers banks an unparalleled opportunity to align global expertise with local market needs. By mobilizing capital for renewable energy, social impact bonds, and green infrastructure, banks can foster inclusive growth while strengthening their role as catalysts for global progress.”
Agarwal added that, “Sustainability and Environmental, Social, and Governance (ESG) considerations will become increasingly important in the banking sector in 2025. Banks will prioritize green financing, climate risk management, and socially responsible investing to meet growing customer demand and regulatory requirements.”
Cloud Computing and Cybersecurity
Speaking on cloud adoption, Agarwal expects app modernization “to gain traction in 2025. With more and more services and transactions getting digitized, Banks will have to modernize their technology infrastructure to cater to peak demand. At the same time, with frauds getting more sophisticated and continuously evolving cyber threats, Banks will continue to invest and upgrade their cyber security framework.”
The future roadmap
Dordi identified that when we look at 2025 and beyond, “the future of banking will be shaped by the industry’s ability to embrace technology, drive sustainability, and foster collaborative ecosystems. By staying ahead of these trends, banks can redefine customer experiences, contribute meaningfully to economic growth, and position themselves as leaders in a rapidly evolving financial landscape.”
Vikas Jalan, CFO, PayNearby believes that the top 5 trends that will determine the ambit of growth for BFSI sector in 2025 include,
“1. Scaling of unified lending interface (ULI) and CBDC
2. Industry consolidation and rise of digital banks
3. Consumer protection and cyber security measures
4. Increase in use cases for adoption of AI
5. Internationalization of Indian DPIs to other countries.”
Abhinav Jain, CFO, Coin DCX highlighted the trends for 2025 include,
“1. Strengthen compliance with automated workflows and system approaches. Multiple KYCs checks and validations can be automated.
2. Educating customers on cyber frauds and creating a insurance pool from wealth for their benefits.
3. Enhancing the Cyber security and IT infrastructure making the technology systems, processes and infrastructure more resilient; and mitigating third-party risks.
4. Regulations for Virtual digital assets and its governance.
5. Going forward, our overarching approach would be to consider ‘sustainability aspects’ as a focal point of the entire credit ecosystem. The onus of spearheading sustainability initiatives will, however, reside with the regulated entities eventually.”