- Sukanya
- 24 Feb 2025
- 168 views
The FinTech sector in the US is not just evolving but moving ahead at an unprecedented pace. Currently, as the finance Saas solutions are redefining infrastructure for investments, payments, and banking, they are also turning the digital finance sector more autonomous and predictive to enable it to be seamlessly embedded in public life.
What to expect
A new president-elect, declining federal rates, and a refreshed appetite for blockchain apps (such as decentralized finance platforms, smart contracts, and digital identity verification systems) will germinate new industry opportunities. Organizations must prepare for the upcoming regulatory changes, risks, and challenges. By having a deeper understanding of the changes and developments, financial organizations can maneuver compliance risks, adapt to emerging technologies, and stay competitive in a continuously evolving market.
This year, technologies like efficiency and automation will emerge. Generative AI (a type of AI that can create new content, such as images, text, or music, that is similar to the data it was trained on) will also continue to permeate the finance sector. From wealth management tools to reforming the customer experience, AI will have a lasting impact on organizations.
The very initiation of 2025 has brought forward various questions regarding what we can see in the financial technology sector, given the advanced innovations that have skyrocketed in the past five years. These innovations add to the challenges and complexities of this turbulent landscape. So, how would FinTech evolve?
Top 8 transformative trends in the US FinTech
In this informative today, Proquantic Software is here with its industry-backed information (and answers) on the trends in the US finance industry, followed by predictions that are set to herald a transformative era for FinTech today and tomorrow. Let's have a look.
1. Leveraging Generative AI
AI was the greatest influence in the global digital economy in 2024 and will continue to dominate all sectors, including finance, in 2025 as well. We have made unparalleled technological achievements since the pandemic hit us, and by proving all speculations wrong, the digital financial sector underwent a massive and positive transition. The effects of this transformation are evident even now, and we'll see them in the coming times as well.
In 2025, the FinTech sector is poised for significant growth, particularly with the application of chatbots powered by generative AI in banking technologies like online money services and payment apps. This innovation is expected to generate new revenue streams and create exciting opportunities for professionals in the industry.
Generative AI is also set to revolutionize investment management and financial planning. AI's ability to identify and process trends in data will empower professionals in the sector to conceptualize products and services with lower risks, ushering in a new era of innovation and opportunity.
“Zest AI reports that AI helped a US auto lender reduce costs by nearly 25%.” – Source.
2. Embracing Blockchain
While the term 'Blockchain' has long been associated with cryptocurrency, its integration into the existing financial framework is set to bring about a significant shift. Blockchain's potential to empower banks with more efficient and cost-effective transactions within its secure nature is a promising development for the industry.
Blockchain is also used for peer-to-peer lending, an industry that is set to grow by $150 billion in 2025. As banks gradually transition to cloud-based infrastructure, Blockchain will play a huge role in this.
In practical examples, Wells Fargo and HSBC are leveraging Blockchain for settling forex trades. JP Morgan and Chase, Mastercard, and PayPal are all set to enable customers to make payments through Blockchain currencies.
3. More users of Personal Financial Apps
Around 250 billion personal financial apps are downloaded annually, with 6 out of 10 people preferring to use them over desktop websites. These applications help people monitor and manage their finances and provide the best suggestions on investing in crypto and stocks.
The power of managing remotely is an attractive aspect of the digital economy for common people, and the US adopting open banking will gradually make these apps safer with an increased number of downloads of skeptical users who will reconsider these solutions for a second look.
A great example of such a solution is the Cash App by Square, a top contender in the personal finance apps genre.
4. Banks embracing the Cloud further
Banks had already been transitioning towards Cloud computing before COVID-19, but the pandemic made the process swifter. IDC, a market research company, estimates global spending on Cloud computing will exceed nearly $1.3 trillion by 2025.
JP Morgan and Chase, and Arvest Bank have already converted a specific section of their core systems into cloud-native platforms. Cloud banking is the future, and companies like IBM continuously develop customized solutions tailored specifically for the financial industry.
Artificial Intelligence plays a colossal role in the adoption of Cloud frameworks. Alongside providing chatbots, the technology monitors suspicious transactions, analyses them, and performs various other tasks that are challenging for humans.
5. Proactive management of cybersecurity risk
Security is everything for financial organizations. With rising geopolitical tensions and economic uncertainty, cyberattack threats will also intensify, increasing the demand for dedicated cybersecurity solutions that ensure operational resilience. With progress in technology, Cyberattacks have become more advanced, such as phishing and deep fake scams in recent times.
Multimodal biometrics combined with behavioral patterns and facial recognition will strengthen the secured access framework. AI-enabled threat-detecting will be able to identify attack vendors more accurately. With the rising number of cyber threats and regulatory needs for stronger authentication, consumer demand for a secure and frictionless experience in banking drives the financial sector's urgency.
6. Green FinTech and sustainability
Green FinTech is ready to transform the concept of sustainable finance in 2025 as carbon footprint tracking is gradually yet seamlessly integrated into payment systems and banking apps. The Blockchain-powered carbon credit trading platform and advanced ESG analytics will facilitate accurate measurement of environmental impact.
Great examples of companies pioneering these technological transitions are Aspiration, an app offering climate-conscious banking services, and Clarity AI, which uses the tech for ESG intelligence. The growth in demand for green cybersecurity solutions is driven by rising customer demand for environmentally responsible and transparent financial services that align with sustainability goals and, of course, regulatory pressure.
7. Regulatory Technology or RegTech
The adoption of RegTech will increase in the year 2025, with financial institutions seeking more effective ways of managing their regulatory burdens. Machine Learning and AI will boost the accuracy of risk monitoring and regulatory reporting. NLP, or Natural Language Processing, will help financial firms process regulatory alterations more swiftly, and Blockchain will provide better transaction tracking and KYC capabilities. The growth aspects for this area are primarily driven by the need to reduce compliance costs in strict margins and mounting regulatory pressures.
8. Embedded Finance
Embedded finance will gain more momentum in 2025 as non-financial brands integrate with payments, banking, and lending in their customer journeys. The API-first infrastructure will make implementation more cost-effective and swifter and enable everything from contextual lending to in-app insurances.
Provider of Banking-as-a-Service: Stripe Treasury will continue to expand its offerings in finance, and Plaid will continue to cement its market position with improved data connectivity solutions. The transitory growth in this sector highlights the evolving consumer expectations for seamless financial services on their preferred digital platforms.
The US FinTech trends in the finance industry to look for
Here's what we can expect to see in the finance sector the US, powered by adoption of advanced tech and their innovative applications.
Increase in acquisition and mergers
The USA witnessed a decrease in its inflation rate below 3% in the last six months of 2024, and the Federal Reserve will continue to interest rates but the exact cuts and numbers are still ambiguous. Pressure from limited partners and an abundance of dedicated capital for realizing return proceeds and investments will generate more merger activities in 2025.
The current focus on integrating AI within organizational frameworks, combined with growing interests in crypto and digital assets, will bring forth new M&A scopes in subsectors.
New Government creating more crypto-friendly infrastructure
The newly elected US President Donald Trump has expressed his desire to create a pro-crypto administration and promised to make the country a 'bitcoin superpower of the world.' Since the 2024 election, Bitcoin's trade value has been on a continuous climb upward, surpassing a $100k token in the last month of the year.
With the new Government's encouragement of cryptocurrency usage, the regulations for stablecoins, bitcoins, and other digital assets will increase in the current year.
The emergence of Bitcoin ETF has also sparked interest in Blockchain tech, with financial institutions seeking to tokenize their assets in the real world. We can expect to see Fortune 500 companies start revisiting their blockchain applications in the areas of loyalty programs, payments, gaming supply chains, and marketing.
FinTech solutions to capture new-generation banking customers
“…$84 trillion in assets is set to change hands over the next 20 years, according to estimates by the consulting firm Cerulli Associates. The recipients, primarily members of Generation X (those born between 1965 and 1980), millennials (1981-1996), and Gen Z (1997-2012), are expected to inherit $72 trillion of that amount, mainly from baby boomers, with the rest going to charity…” - Source
In such a scenario, financial institutions, to stay competitive and win the trust of future generations, must adopt user-friendly and intuitive tools that rely more on FinTech to enhance customer experiences.
We anticipate that more banks will prioritize centralizing services like credit lines, savings accounts, and investments under unified platforms. Asset managers are increasingly turning towards AI to offer personalized portfolio management services with more tailored experiences for meeting the investment needs of young customers.
Surge in the US’s international investments
The United States still rules the global economy as the largest FinTech market, and it will witness a steady increase in its international investments from private equities and global firms seeking to amplify its market share.
Similarly, US-based FinTech firms will look for more investment opportunities overseas. A key market is India, where online banking and M&A activities have risen thanks to the swiftly growing economy of 1.4 billion people. In fact, Japan, Africa, and Western Europe are also ready to welcome US FinTech investors seeking investment opportunities in their countries.
2025 is the year of risk and opportunity in FinTech. Only ventures with the most innovative ideas of investment, innovation, and risk-taking will outshine competitors and stay afloat. As a Financial organization, how ready are you?
At Proquantic Software, we always enable our clients to respond to dynamic market changes with innovations that are future-ready. Our expertise in modernizing digital core systems for the financial sector has helped our clients consistently improve their C/I (cost-to-income) ratios and savings on the total cost of operations for healthy performance in the crowded US market.
What do we offer?
- App development
- Custom enterprise software development
- Cloud security solutions
- Custom software solutions
- AI services and data analytics solutions
- Blockchain Software Development
Our tailored solutions are based on technological expertise and deep industry knowledge, generating critical outcomes based on consistent efficiency, growth, and compliance. Aligned with the trends in the finance industry, all our services are dedicated to modernizing your offerings in the financial service sector with solutions that enable your organization with the needed agility, scalability, and security in this dynamic environment today and tomorrow.
Conclusion
Considering the trends in the finance industry, the year 2025 will be about transformation, not just technology. Hyper-personalized financial ecosystems, quantum-resistant security, and regulatory changes adapting to embedded finance will now transform the way values are created and the way money moves. Those who can proactively adapt to these shifts will stay relevant and set a new benchmark in financial innovations. Call us today to discuss your roadmap of success.