{"id":27102,"date":"2025-01-06T06:11:02","date_gmt":"2025-01-06T11:11:02","guid":{"rendered":"https:\/\/www.sage.com\/en-us\/blog\/?p=27102"},"modified":"2026-01-22T05:19:22","modified_gmt":"2026-01-22T10:19:22","slug":"financial-services-industry-2025","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-us\/blog\/financial-services-industry-2025\/","title":{"rendered":"5 things the financial services industry should watch for in 2025"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-us\/blog\/category\/trends-insights\/\" class=\"entry-header__link\">Trends &amp; Insights<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\t5 things the financial services industry should watch for in 2025\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2025-01-06T06:11:02-05:00\">January 6, 2025<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"5 things the financial services industry should watch for in 2025\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-us\/blog\/financial-services-industry-2025\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n<\/header>\n\n\n\n<div class=\"wp-block-post-author has-dark-background-color alignfull\">\n\t<div class=\"container\">\n\t\t<div class=\"col\">\n\t\t\t\t\t\t\t<div class=\"co-authors\">\n\t\t\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-us\/blog\/author\/yassirmalik\/\">\n\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"40\" height=\"40\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2024\/03\/Yassir-Malik.jpg\" class=\"entry-author__image\" alt=\"yassir-malik-profile-picture\" \/>\t\t\t\t<span class=\"entry-author__name\">Yassir Malik<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n\n\n<p>The financial services sector is bracing itself for potentially transformative change in 2025.<\/p>\n\n\n\n<p>There is considerable uncertainty around how the new US administration\u2019s first 100 days will play out, and how quickly it\u2019ll follow through on its promise to deregulate.<\/p>\n\n\n\n<p>AI and automation promises to change the operational landscape considerably.<\/p>\n\n\n\n<p>Thanks to competition from digital-first fintechs, innovation around products and services are picking up pace.<\/p>\n\n\n\n<p>While challenging, this represents an opportunity for financial services firms to do things a bit differently.<\/p>\n\n\n\n<p>Sage spoke to several financial services finance leaders across the US and the UK to get their predictions for 2025.<\/p>\n\n\n\n<p>Their answers revealed scope for CFOs to play a much more strategic role in the future, using real-time insights to become an indespensible partner to the CEO and C-suite peers.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-here-s-what-we-ll-cover\">Here&#8217;s what we&#8217;ll cover<\/h3>\n\n\n<?xml encoding=\"utf-8\" ?><div class=\"wp-block-yoast-seo-table-of-contents yoast-table-of-contents\"><ul><li><a href=\"#h-economic-and-market-dynamics\" data-level=\"2\">Economic and market dynamics<\/a><\/li><li><a href=\"#h-ai-is-a-growth-catalyst\" data-level=\"2\">AI is a growth catalyst<\/a><\/li><li><a href=\"#h-risk-compliance-and-governance\" data-level=\"2\">Risk, compliance and governance<\/a><\/li><li><a href=\"#h-future-of-financial-operations\" data-level=\"2\">Future of financial operations<\/a><\/li><li><a href=\"#h-market-growth-and-competitive-advantage\" data-level=\"2\">Market growth and competitive advantage<\/a><\/li><li><a href=\"#h-final-thoughts\" data-level=\"2\">Final thoughts<\/a><\/li><\/ul><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-economic-and-market-dynamics\">Economic and market dynamics<\/h2>\n\n\n\n<p>When asked about the factors that would most impact their businesses in 2025, economic uncertainty and market competition ranked highly among the finance leaders surveyed by Sage.<\/p>\n\n\n\n<p>Cost reduction and revenue growth were also top priorities.<\/p>\n\n\n\n<p>In terms of the economy, US share prices fell at the end of 2024 as the <a href=\"https:\/\/www.bbc.co.uk\/news\/articles\/clyj3ym3e55o\" target=\"_blank\" rel=\"noreferrer noopener\">Federal Reserve cut its interest rates<\/a> for the third time in a row, and signaled a slower pace of cuts in the new year.<\/p>\n\n\n\n<p>Experts say policies backed by the new US administration, such as plans for tax cuts and import tariffs, will put inflationary pressure on prices and borrowing rates in 2025.<\/p>\n\n\n\n<p>There\u2019s also expected to be a consolidation of the industry, with increased M&amp;A activity, and an uptick in investment flows.<\/p>\n\n\n\n<p>Financial services firms can also expect the competition from digital-first fintechs to continue in 2025.<\/p>\n\n\n\n<p>By using data to build more personalized products and offer self-serve options, these challengers have raised customer expectations, and are putting pressure on more traditional firms to innovate. <\/p>\n\n\n\n<p>During times of market volatility, real-time data insights are also helping astute C-suite leaders build resilience, anticipate trends as they emerge, and build a better strategy for growth.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-ai-is-a-growth-catalyst\">AI is a growth catalyst<\/h2>\n\n\n\n<p>Financial services firms have already been making big investments in AI, and are starting to reap the benefits.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.bain.com\/insights\/ai-in-financial-services-survey-shows-productivity-gains-across-the-board\" target=\"_blank\" rel=\"noreferrer noopener\">One survey by Bain &amp; Company<\/a> found adopters are seeing a 20% productivity gain on average, with software coding and customer service among the most popular use cases.<\/p>\n\n\n\n<p>But questions around risk, data security, and team skills are already limiting the pace of adoption.<\/p>\n\n\n\n<p>In the Sage predictions survey, most respondents agreed AI will help financial services firms to:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>streamline back-office operations<\/li>\n\n\n\n<li>increase productivity<\/li>\n\n\n\n<li>drive better decision making.<\/li>\n<\/ul>\n\n\n\n<p>Rebecca Miller, controller at Byler Holdings LLC also sees potential for greater personal growth among staff: <\/p>\n\n\n\n<figure class=\"wp-block-pullquote\"><blockquote><p>\u201cWhen there is less need for a manual process, we see it as an opportunity to advance the learning of everyone, which makes them able to take on those more complicated tasks that need a human touch\u2026 <br><br>[It will enable] a profound shift so that our entire firm is more efficient and better organized.\u201d<\/p><cite>Rebecca Miller, Controller at Byler Holdings LLC<\/cite><\/blockquote><\/figure>\n\n\n\n<p>Aaron Harris, CTO at Sage, agrees but stresses the sector needs to think about guardrails for this new technology:<\/p>\n\n\n\n<figure class=\"wp-block-pullquote\"><blockquote><p>\u201cThis will be the year where we start to see AI agents take over responsibilities for accounting functions. <br><br>As AI effectively becomes a \u2018user\u2019 in accounting software to automate tasks, we will teach a tipping point where accountants will be able to focus more on high-value activities like strategic planning and advisory services\u2013so long as the industry applies the necessary safeguards for these AI agents.\u201d<\/p><cite>Aaron Harris, CTO at Sage<\/cite><\/blockquote><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-risk-compliance-and-governance\">Risk, compliance and governance<\/h2>\n\n\n\n<p>A number of the financial services leaders surveyed by Sage stated regulatory compliance was going to be a significant factor impacting their business in 2025.<\/p>\n\n\n\n<p>There\u2019s uncertainty around what plans the new US administration has for governance and compliance. However, <a href=\"https:\/\/kpmg.com\/us\/en\/media\/news\/key-regulatory-challenges-for-2025.html\" target=\"_blank\" rel=\"noreferrer noopener\">KPMG points to shifts<\/a> around areas of technology, data risks, and consumer protections.<\/p>\n\n\n\n<p>Consequently, financial services firms are likely to need to enhance transparency. They will also need to improve risk controls around cybersecurity and financial crime in particular.<\/p>\n\n\n\n<p>ESG reporting requirements may also continue to ramp up. However, the new administration in the US may water down anticipated legislation.<\/p>\n\n\n\n<p>This is a sentiment that\u2019s also been reflected by the wider sector.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.pwc.com\/gx\/en\/industries\/financial-services\/publications\/financial-services-in-2025.html\" target=\"_blank\" rel=\"noreferrer noopener\">In a financial services survey by PwC<\/a>, for example:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>48% of its respondents said they were most worried about regulation around data privacy and security<\/li>\n\n\n\n<li>31% said digital identity authentication was a concern<\/li>\n\n\n\n<li>30% said regulation around the use of new technology (such as AI) was giving them pause for thought.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-future-of-financial-operations\">Future of financial operations<\/h2>\n\n\n\n<p>The World Economic Forum predicts that by 2027, 43% of work tasks across all sectors will be automated.<\/p>\n\n\n\n<p>In financial services, the shift to process automation and real-time reporting will necessitate investment in upskilling for finance teams.<\/p>\n\n\n\n<p>In <a href=\"https:\/\/www.pwc.com\/gx\/en\/industries\/financial-services\/publications\/fit-to-compete.html\" target=\"_blank\" rel=\"noreferrer noopener\">PwC\u2019s annual global CEO survey, 54% of financial services chief executives<\/a> said skills shortages hindered their firm\u2019s ability to innovate effectively.<\/p>\n\n\n\n<p>This needs to be a priority for firms to maximize the opportunities technology investment can bring.<\/p>\n\n\n\n<p>Additionally, existing finance personnel need assurances that AI and automation does not necessarily equate to headcount reductions.<\/p>\n\n\n\n<p>Rather, workflow refinements through these tools are designed to offload much of the tedious work on their plate and serve as complementary to human work.<\/p>\n\n\n\n<p>Sage\u2019s research highlighted a number of skills finance leaders believe will be critical in 2025, from data literacy and visualization, to AI proficiency and strategic thinking.<\/p>\n\n\n\n<p>Sage CTO Aaron Harris says AI isn\u2019t a silver bullet and a proficiency with tasks such as prompt engineering shouldn\u2019t be overlooked. <\/p>\n\n\n\n<figure class=\"wp-block-pullquote\"><blockquote><p>\u201cIt is about understanding how to communicate with and guide their AI \u2018copilots\u2019 to achieve desired outcomes, asking the right questions and, over time, training AI behaviour to optimise performance.\u201d <\/p><cite>Aaron Harris, CTO at Sage<\/cite><\/blockquote><\/figure>\n\n\n\n<p>Softer skills such as adaptability and a willingness to embrace change were also emphasized.<\/p>\n\n\n\n<p> Change management is as important a part of digital innovation projects, as the technology installation itself.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-market-growth-and-competitive-advantage\">Market growth and competitive advantage<\/h2>\n\n\n\n<p>The majority of financial services leaders surveyed about the most significant growth opportunities for 2025 point to the ability to boost productivity and efficiency through automation.<\/p>\n\n\n\n<p>Others believe they\u2019ll find competitive advantage by using customer data to launch more personalized products or move into new business lines.<\/p>\n\n\n\n<p>But with so much in flux, some organizations feel there is an opportunity to take advantage of the uncertainty in the market.<\/p>\n\n\n\n<p>Krunal Thakkar, team leader at Analytix Solutions, for example, says that employing strategies to capitalize on interest rates would be the company\u2019s most significant growth opportunity in 2025.<\/p>\n\n\n\n<p>Another anonymous respondent pointed to acquisition opportunities.<\/p>\n\n\n\n<p>Aaron also believes the competitive advantage of investing in AI and automation will only continue to grow. <\/p>\n\n\n\n<figure class=\"wp-block-pullquote\"><blockquote><p>\u201cIn 2025, this will manifest itself in the next step on the industry\u2019s journey towards continuous accounting, continuous assurance, and continuous insights. <br><br>This shift will empower businesses with unparalleled operational efficiency, improved compliance, robust risk management, and more accurate financial forecasting.\u201d<\/p><cite>Aaron Harris, CTO at Sage<\/cite><\/blockquote><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-final-thoughts\">Final thoughts<\/h2>\n\n\n\n<p>While financial service leaders are concerned about market volatility and the uncertainty around new regulation in 2025, there\u2019s a real recognition of the potential offered by new technology. <\/p>\n\n\n\n<p>At the end of 2024, the strongest barriers seem to be skills and capacity within in-house teams, as well as legacy systems that keep data siloed.<\/p>\n\n\n\n<p>With the right upskilling and <a href=\"https:\/\/www.sage.com\/en-us\/accounting-software\/financial-management\/\">financial management solutions<\/a> in place to optimize back-office operations in 2025, finance teams will be able to automate high-frequency administrative tasks, and focus more on higher level strategic work.<\/p>\n\n\n\n<p>Compliance reporting and strategic forecasting become seamless \u2013 regardless of the regulatory changes that come to pass. <\/p>\n\n\n\n<p>Leaders will be empowered to make better decisions to build resilience, boost revenue, and innovate new products and services to serve a wider cohort of customers in 2025.<\/p>\n\n\n\n<p><a href=\"#gate-8398aba7-b80c-480d-aee6-de9e2eb5e6d5\">Explore the CFO&#8217;s blueprint for driving growth in financial services to develop your plan for efficiency, compliance, and strategic impact.<\/a><\/p>\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to our Sage Advice Newsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Get our latest business advice delivered directly to your inbox.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-ab515c6e-7e90-4c2f-a67e-113872516e8b\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1073797282-1440x810.jpg\" class=\"single-cta__image\" alt=\"Working from home with tea in hand\" loading=\"lazy\" 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<\/p>\n","protected":false},"author":1774,"featured_media":13691,"menu_order":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"footnotes":""},"categories":[46,49],"tags":[4,170,153],"business_type":[41],"lilypad":[],"context":[],"industry":[57],"persona":[100],"imagine_tag":[242,468,440,444,233],"coauthors":[509],"class_list":["post-27102","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-growth-customers","category-trends-insights","tag-business-intelligence","tag-business-strategy","tag-growing-a-business","business_type-growing-business","industry-financial-services"],"sage_meta":{"region":"en-us","author_name":"Yassir Malik","featured_image":"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/01\/GettyImages-1181223319-928x522-1.jpg","imagine_tags":{"242":"Financial services","468":"Grow your business","440":"Intacct Financial Services","444":"Intacct Medium Business","233":"Medium Businesses"}},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice 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