Outlook 2025: Banking tech trends CIOs need to watch

In 2025, the banking and fintech sectors are set to undergo significant transformations driven by technological advancements, evolving customer expectations, and regulatory requirements. Experts predict that digital transformation will remain a priority for financial institutions striving to stay competitive in a more connected, personalised, and resilient ecosystem. The key trends for this year include:

Hyper-Automation for Efficiency

Hyper-automation, which combines technologies such as Robotic Process Automation (RPA), AI, and machine learning, will streamline banking operations by automating complex processes, reducing costs, and enhancing efficiency. Automating repetitive tasks such as data collection and document processing will minimise errors. Sumeet Agarwal, CTO of ManipalCigna Health Insurance, emphasises the company's goal to implement advanced RPA solutions to expedite claims processing and reduce manual errors. CIOs believe that integrating AI and RPA with biometrics will enhance onboarding and transaction monitoring.

AI/Gen AI to Enhance Customer Experience

AI will play a pivotal role in helping banks understand customer needs and provide personalised services, transforming customer engagement. Intuitive AI chatbots and virtual assistants will deliver tailored experiences and resolve complex issues. Prince Kohli, CTO of Automation Anywhere, notes that generative AI will significantly benefit the banking sector by detecting fraud, improving service accuracy, reducing costs, and enhancing compliance.

Focus on Embedded Finance and Open Banking

Embedded finance and open banking will increase the accessibility of financial products and services, facilitating omnichannel banking. Open banking enables data sharing between banks and third-party providers through APIs, promoting financial inclusion. Avinash Raghavendra, CIO of Axis Bank, highlights the potential for collaboration through APIs. The growth of digital public infrastructure in India, such as Aadhaar and UPI, further supports a promising digital future, he says.

Data Analytics for Risk Management

Financial institutions will leverage data analytics for credit risk assessments and to mitigate loan-related risks by continuously monitoring client information. Analytics will enhance risk modelling and portfolio performance, aiding credit risk analysis, according to Abhijeet Bhattacharjee, CIO of Utkarsh Small Finance Bank.

Robust Cybersecurity Strategy

As digital banking rises, cybersecurity becomes essential for protecting customer data and financial systems. Rohan Vaidya, Regional Director at CyberArk, advocates for a comprehensive approach that includes data encryption, network security, and employee training. He advises CISOs to adopt a zero-trust model and implement Privileged Access Management to safeguard against data breaches.

Regulatory Compliance in Focus

With the advent of technologies such as RPA, blockchain, and AI, banks must adopt solutions that facilitate innovation while ensuring regulatory compliance. Managing compliance complexity requires fostering accountability, investing in technology to streamline processes, and mitigating operational risks. This approach positions banks as valuable partners in customers' sustainability journeys while opening new business opportunities.

Summing Up

The banking and fintech landscape in 2025 will be defined by the integration of advanced technologies and consumer-focused innovations. Dennis Gada, EVP and Global Head of Banking and Financial Services at Infosys, states that AI will enhance banking efficiency and support stakeholders, while robust security measures will mitigate cybersecurity and fraud risks. Open banking and embedded finance will improve accessibility and innovation.

He believes banks will adopt multi-cloud strategies for flexibility, and blockchain will enhance transaction efficiency and transparency. Modernising legacy systems will reduce technological debt and enable 'platformification,' while ensuring operational resilience in online banking remains crucial.

Additionally, financial institutions will prioritise a strong data infrastructure to meet regulatory standards and customer expectations, paving the way for future growth. Experts believe that organisations embracing innovation, collaboration, and adaptability will thrive in this evolving environment.