Fintech leaders predict 2025's impact on the industry

Executives from leading fintech companies have shared their insights on the trends and developments expected to shape the industry in 2025, touching on themes such as fraud prevention, open banking, artificial intelligence, and the mortgage market.

Maciej Pitucha, Vice President of Product and Data at Mangopay, emphasised that fraud tactics will continue to evolve, necessitating more sophisticated fraud prevention strategies. "In 2025, fraud tactics will continue to evolve, presenting new challenges for payment service providers (PSPs) and retailers. The rise in APP fraud has led to additional regulation in the UK, and I predict that other regions will follow. However, these reimbursements will likely cause a dramatic increase in first-party fraud (friendly fraud), which will demand more sophisticated fraud prevention strategies. Technologies like AI, dark web insights, and device fingerprinting will become integral in detecting and preventing fraud, particularly during high-traffic purchasing periods. A multi-layered approach to fraud prevention will become essential to safeguard against increasingly complex schemes," said Pitucha.

He also highlighted the importance of consumer awareness in combating fraud. "Consumer awareness will also become a key component in the fight against fraud. As social engineering scams like phishing proliferate, businesses will prioritise educating consumers on how to protect themselves, such as by verifying URLs and avoiding suspicious offers. Collaboration between the private sector, regulators, and consumers will be critical in fostering trust and ensuring a safer digital environment for all parties involved," he added.

Pitucha further noted the impact of AI on financial services, stating, "Meanwhile, AI will continue to support enhancing a range of services, from fraud detection to personalised financial products, but its widespread use will also prompt regulators to catch up. As AI becomes a central part of financial services, new regulatory frameworks will emerge to address concerns like privacy, algorithmic bias, and accountability, shaping the future of both fintech and AI technology."

In the realm of open banking, Huw Davies, CEO and Co-Founder of Ozone API, discussed the global developments in regulation, pointing to the significant progress made in various regions. "This year we've seen significant developments in open banking regulation globally. In the UK OBL released the first major upgrade to the standards in quite some time (OBLv4) which is mandated for a number of banks including the CMA9 banks; the US launched Section 1033 of the Dodd-Frank Act, marking North America's first official open banking laws; and countries across MENA including the Kingdom of Saudi Arabia and the UAE made remarkable progress on their open finance roadmaps," said Davies.

He anticipates further developments in 2025, saying, "As we enter 2025 I expect more significant advances in the global open banking landscape in 2025. Following the publication of the government's payment vision and the evolving smart data roadmap the UK may start to see renewed momentum as it works to regain its early global leadership position, bringing new consumer-focused applications, particularly in mortgages and sustainable finance."

Davies also foresees the expansion of open banking in other regions, stating, "Meanwhile, I suspect in the US we'll see the market moving as they prepare to deliver open banking APIs in response to 1033. And whilst not confirmed it's probable that they'll be building to the Financial Data Exchange (FDX) standards."

Simona Covaliu, Chief Risk Officer at PayU GPO, focused on AI-driven risk management and its dependency on data quality. "AI has already proven to be transformational and over the next year, it is poised to reshape fraud detection and risk management in payments, driven by advancements in machine learning and data integration. AI will allow for more accurate and contextual fraud detection models, leveraging diverse data sources to identify and respond to threats more efficiently," she stated.

Covaliu warned of the challenges posed by data quality, adding, "Despite these advancements, this relies heavily on data quality - poor or fake data can undermine the effectiveness of AI systems, making robust data governance essential. With regulatory developments in the EU influencing how AI can be used, the pace and extent of its adoption will depend on how well organisations adapt to these new requirements."

Jerry Mulle, UK Managing Director of Ohpen, reflected on the challenges faced by fintech and financial services in 2024 and expected continuations into 2025. "2024 has been a tumultuous year for fintech and financial services. With significant elections in the UK and the US, shifting inflation rates, base rate cuts, evolving regulations and growing consumer scepticism, the year has proven to be both turbulent and unpredictable," he remarked.

Looking forward, Mulle commented, "As we look ahead, 2025, the volatility of the past year is expected to persist. Coupled with rising consumer demand for mortgages in the UK – fuelled by Labour's plan to build new homes – and the evolving demographic of mortgage applicants, particularly Gen Z, who increasingly have multiple sources of income from freelancing and side hustles, will push mortgage providers to adopt new strategies, and offer more niche mortgage packages and products."

Mulle concluded that traditional banks will need to adapt, stating, "This shift won't be limited to the neo-banks, however. These comprehensive external pressures will catalyse traditional big banks through to small building societies to modernise their legacy systems or face the risk of alienating consumers and losing their market share."