The banking industry will undergo significant changes in 2025, driven by AI technologies and consolidation. These changes will make traditional banking more agile, efficient, secure, and innovative, with community banks playing a pivotal role in their implementation, according to experts.
“AI and technology will play a bigger role in helping banks improve customer service, prevent fraud, and cut costs,” said Antwyne DeLonde, a visionary technologist and CEO at VisionX, told The Epoch Times.
“At the same time, banks must focus on protecting customer data as regulations get strict and technology improves. Smaller banks may struggle to keep up with larger players. They must focus on offering more personalized services to stand out.”
DeLonde expects more digital banking options and fewer customer branch visits.
“The key for banks will be finding the right balance between innovation and keeping that personal connection with their customers,” he said.
Simas Simanauskas, ConnectPay’s chief business officer, sees a new trend: embedded banking, which entails non-financial institutions offering banking services.
“In 2025, we expect to see embedded finance making its mark in sectors where the potential to improve customer experience had been seen as minimal, from dynamic ticket pricing for sporting events to real-time insurance adjustments in health care,” Simanauskas told The Epoch Times.
“Such improvements are becoming more readily available as the banking sector and fintech companies upgrade their back-end processes and develop unique end-points for such instruments and digital wallets. The result is more seamless integration for platforms and service providers.”
Roman Eloshvili, founder and CEO of XData Group, a B2B software development company that offers technology solutions for banks, provides further insights on how AI will transform the banking industry.
“By automating and speeding up various operational elements, such as compliance, customer support, and cybersecurity, AI will make banks more agile and efficient,” he told The Epoch Times.
“Agentic AI will have a role to play. Its ability to act independently could further streamline decision-making and democratize access to advanced financial tools.”
Eloshvili sees this trend accelerating thanks to the growing presence of the tech-savvy Gen Z in finance, who lean more towards digital banking than the less tech-savvy baby boomers.
“They are interested in seamless solutions that come in mobile-first packages, with instant support and personalized perks,” he said.
“To connect with them, banks must shift gears and prioritize user-friendly apps and a strong online presence. Partnerships with fintech companies will also benefit if they want to roll out innovative services faster.”
According to Eloshvili, there’s one more factor at play in the new year: industry consolidation.
“Looking at the number of banks in the U.S., you can see a long-term trend toward consolidation,” he said.
“In Europe, the banking sector remains more fragmented, with significant consolidation occurring primarily during the 2007–2008 financial crisis. However, with the recent UBS acquisition of Credit Suisse, the trend continues in Europe, too.”
For Eloshvili, acquisitions will help the acquiring banks achieve economies of scale. In contrast, the acquired banks profit from better access to additional capital and liquidity, as in the case of Credit Suisse.
Five Star Bank San Francisco Bay Area President DJ Kurtze sees community banks poised to play a pivotal role as agents of change and in addressing the financial needs of the local economies.
“In the wake of bank failures resulting in low confidence in banking, businesses in 2025 will increasingly move their assets and their trust to community banks, which are catalysts for economic development and advocates for clients,” he told The Epoch Times via email.
“Businesses now want direct access to a dedicated banker who provides concierge, high-touch, white-glove service, strategy, and insights to earn their confidence and unlock their success.”
Meanwhile, Kurtze sees a movement among community banks and more diversification.
“To grow their businesses, assets, and clientele in 2025 and to embrace an opportunity to compete with larger banks, community banks will diversify beyond serving one or two niche markets,” he said.
“Community banks will broaden their range of specialization in markets as diverse as agriculture, commercial real estate, construction, government, healthcare, manufacturing, nonprofit, and venture capital to attract marquee clients and expand their presence.”
Kurtze is skeptical of AI. On the one side, he thinks AI will deliver many benefits in financial services in 2025, such as automating business processes and providing insights and analytics to support decision-making.
On the other hand, he sees the desire of business executives to interact with relationship bankers they know and trust increasingly to minimize the possibility of fraud that comes with fake information.
“Businesses are increasingly aware of the ‘dark side’ of AI, including deepfakes, misinformation, and hallucination, to a point where they will seek concierge, high-touch, white-glove banking services to manage, protect and grow their assets in 2025,” he said.
