The 2025 Retail Banking Trends and Priorities report offers a comprehensive view of how the banking and financial services landscape is being reshaped by digital transformation in banking and financial services, shifting customer expectations, and intensified competition from FinTech and big tech. Derived from a global survey of financial institutions, this report published by the Financial Brand uncovers the key areas that demand strategic focus for banks to remain competitive, resilient, and relevant.
Key Trends in Retail Banking for 2025
The future of Retail Banking is being heavily influenced by several powerful forces, including digital transformation in banking and finance, digital finance trends, and customer-centric innovation.
Here are the top priorities identified for 2025:
1. Digital Transformation in Banking and Financial Services
Around 51% of financial institutions are actively investing in banking digital transformation, prioritizing customer-facing digital solutions over backend legacy updates. As digital innovation leadership becomes central to competitive advantage, institutions are under pressure to modernize operations rapidly.
2. Personalization
An impressive 74% of consumers now demand personalized banking services. Institutions embracing digital transformation in banking and finance must deliver relevant, real-time insights. Digital finance trends show personalization as a vital differentiator, enhancing customer loyalty and engagement.
3. Artificial Intelligence (AI)
AI is no longer just for fraud detection (33%). Its application has expanded to customer service chatbots (28%) and generative AI tools that support real-time personalized marketing. These AI solutions are now integral to banking digital transformation, enhancing both experience and efficiency.
4. Real-Time Payments
62% of financial institutions are projected to offer real-time payments by 2025. Digital innovation leadership in this area is helping banks meet customer expectations and compete with nimble FinTech.
5. Branch Network Strategies
While digital channels are expanding, 35% of banking and financial services providers still plan to grow their physical branches, indicating a hybrid engagement model. Balancing digital finance trends with human touchpoints will be key.
6. Strengthening Cybersecurity
With increasing cyber threats, investment in cybersecurity is a top priority. Digital transformation in banking and finance must include advanced protection systems to maintain trust and compliance.
7. Innovation & New Product Development
FinTech disruption has pushed traditional banking and financial services to enhance their innovation pipelines. Building next-gen offerings requires strong digital innovation leadership and collaboration.
Challenges and Disconnects in Banking Digital Transformation
Despite the optimism, Retail Banking institutions face major roadblocks that can hinder growth and innovation.
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Infrastructure vs. Innovation
Only 25% of financial institutions are prioritizing the modernization of legacy systems. These outdated systems act as a bottleneck to true digital transformation in banking and financial services, limiting agility and scalability.
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Talent and Execution Gaps
Recruiting skilled talent in areas like AI and analytics is deprioritized (11%). Merely 7% of banks report having fully realized their banking digital transformation goals. Without strategic hiring and development, digital innovation leadership cannot be sustained.
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Customer Service Weaknesses
Many institutions still struggle to deliver seamless omnichannel experiences. As digital finance trends highlight rising customer expectations, this gap in service undermines trust and brand loyalty in the Retail Banking space.
Strategic Growth Paths in Retail Banking
Growth remains a high priority for banking and financial services providers:
1. Customer Acquisition
Acquiring new customers is the top goal (45%), followed by growing existing relationships (23%) and boosting engagement (21%). Using digital finance trends to drive targeted outreach and personalized services is now essential.
2. Deposit Generation
Shifting from rate-based competition to data-driven targeting is a key strategy, underpinned by digital transformation in banking and finance tools.
3. Small Business Banking
Banks are expanding offerings with enhanced digital platforms, advisory tools and financial insights—another reflection of evolving digital finance trends.
Technological Modernization in Banking and Financial Services
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AI, Cloud and Open APIs
AI, cloud migration and open banking APIs are crucial pillars in the ongoing banking digital transformation. These enable real-time personalization, efficiency and scalability.
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FinTech Partnerships
64% of financial institutions now collaborate with FinTech to co-create innovative solutions. Areas of focus include digital account opening (49%) and financial wellness tools (41%). Such alliances are a testament to effective digital innovation leadership.
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Cloud Migration
Nearly 70% of banking leaders believe that over 75% of their enterprise applications will migrate to the cloud by 2030. This reflects a deep commitment to digital transformation in banking and finance.
Future Projections for 2030
The future of Retail Banking looks bright for institutions that can:
- Embrace digital finance trends
- Innovate rapidly with customer needs in mind
- Build collaborative ecosystems
Key Technological Priorities
- Generative AI: Projected to drive personalized marketing for 80% of banks.
- Embedded Banking: Non-banks like Apple Pay or Google Pay may handle over half of payment transactions.
- Blockchain: While only 27% expect wide adoption by 2030, the focus remains on scalability and regulation.
As banking digital transformation evolves, digital innovation leadership will determine the winners in the next era of banking and financial services.
Strategic Recommendations for Retail Banking Leaders
To thrive in this landscape, banks and finance speaker, thought leaders suggest the following:
- Advance personalization beyond generic recommendations.
- Strengthen transparency in data use and cybersecurity to build trust.
- Enhance omnichannel service delivery for improved customer support.
- Maintain a balance between digital convenience and human interaction.
- Utilize AI with care, ensuring customer relationships remain strong.
Finance speakers emphasize that success lies in using digital finance trends to create truly customer-centric strategies.
Conclusion –
The future of Retail Banking lies at the intersection of digital transformation in banking and finance, innovation and trust. To stay ahead, banking and financial services must adopt a customer-first mindset powered by digital innovation leadership. Those who embrace banking digital transformation not just in technology but in culture and execution will lead the charge in a rapidly evolving digital economy.
By aligning with the most impactful digital finance trends, engaging finance speakers for thought leadership and building agile, data-driven ecosystems, financial institutions can future-proof their growth and relevance in the next decade.
