The financial services landscape of 2025

With the advantage of hindsight, the financial landscape of 2025 can be characterised by the enforcement of transformative payment regulations, the rise in support for stablecoins, and the moment the rubber hit the road for artificial intelligence (AI). As the year draws to a close, it’s time to reflect on the financial news topics that were discussed most keenly, and the transformational fintech stories that underpinned them.

1. The rise of AI

In the last 12 months, AI shifted from being an abstract technological innovation to one that was mainlined into the nervous system of financial institutions (FIs) around the world. The industry shouldered unprecedented levels of investment into AI projects, with the hope of razing inefficiencies in the back office, extending hyper-personalised services to customers, and meeting an increasingly sophisticated threat from cybercriminals.

Naturally, many of these projects tripped up on technical furniture, but some delivered true change - giving customers, commentators, and even critics a taste of how transformative AI will be in the long term.

In the UK, research from Lloyds revealed that over half of UK adults (28 million) used AI in 2025 to help them manage their money - making personal finance the UK’s number one use of AI. Though belated, the UK government responded to the transformative power and economic potential of this technology, and asked the Financial Services Skills Commission (FSSC) to produce a report on AI skill needs, training and innovation in financial services. The report will provide an assessment of the building blocks required for successful adoption, deployment and use of AI - and a clear plan on how to build the skills the sector will need to remain globally competitive.

The Bank of England (BoE), meanwhile, announced plans to prioritise AI, distributed ledger technology (DLT) and quantum computing, as the three "cross-cutting technologies" with the most potential for "transformative outcomes". It acknowledged that the UK's financial services sector has a key role to play in both adopting the technology and enabling other sectors in the economy to benefit from the technology.

At the institutional level, AI projects also abounded, with HSBC adopting Mistral AI foundational models across the organisation and Lloyds Bank embedding and AI-powered financial assistant into its mobile application.

On the continent the attitude toward AI was just as warm, with the European Central Bank (ECB) announcing in October it had turned to the Portugal-based AI startup Feedzai to provide fraud detection and prevention capabilities for its digital euro.

Europe’s frantic activity around AI underscored an unofficial technology arms race between historic trans-Atlantic partners. Indeed, in the United States - the cradle of AI development - projects saw rapid uptake, with the aim of driving economic productivity and growth. The AI research and development firm responsible for the creation of ChatGPT, OpenAI, for instance, began hiring Wall Street bankers to help train AI in financial models. According to Bloomberg, the bankers are paid $150 an hour to write prompts and build financial models for things like restructurings and initial public offerings (IPOs). Paypal wallet also came to ChatGPT, causing its shares to soar more than 10%, while Visa introduced a “trusted agent protocol” to protect merchants from malicious bots when transacting with AI agents.

The flurry of AI activity seemed never-ending, but not all the news stories were rosy. In October, McKinsey reported that bank profits face a $170bn hit from AI, if consumers’ needs are not met. One of these needs is “to be protected” from the increasing threat of AI scams, according to Alloy’s The State of Scams report.

2. Systemic support for stablecoins

A rendering of the past year would not be complete without a nod to stablecoins. As an alternative blockchain-based payment method, these cryptocurrencies - pegged to a stable fiat currency - captured the conversation in 2025. Much of the innovation was facilitated by regulators’ thawing attitude to the technology; as we saw with the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, passed into law 18 July, which established a comprehensive regulatory framework for stablecoins.

As for blockchain itself - the peer-to-peer network that underpins cryptocurrencies - it was heralded as a technology that will eventually power all transactions, by Bill Winters, the chief executive of Standard Chartered. These comments came amidst an explosion of some of the world's biggest banks - including Barclays and Goldman Sachs - exploring the issuance of blockchain-based digital money.

The BoE, for its part, opened a consultation on stablecoin regulations in November and less than a month later, a euro-denominated stablecoin joint venture - backed by 10 major banks - received a name and leadership structure as it began work towards a launch in the second half of 2026.

At the fintech level - across the US, Europe and Asia - appetite for stablecoin offerings was just as profound. Revolut began offering fee-free fiat-to-stablecoin conversions; Klarna and Western Union announced the launch of their own stablecoins; and Visa commenced pilot trials for stablecoin payouts. In Japan, three of the nation’s largest banks - MUFG Bank, Sumitomo Mitsuio Banking Corp and Mizuho Bank - joined forces to issue a unified stablecoin.

With all these developments in one place, it’s fair to say that 2025 could be the year we look back on as the start of the stablecoin revolution.

3. A thawing regulatory environment

On the global political stage, 2025 kicked off with the inauguration of President Donald Trump. Since taking office, Trump - with the help of the Department of Government Efficiency (DOGE) - has sought to slash financial regulations, in order to unleash economic growth. Not without its critics, this strategy has had the desired effect in many areas - and even encouraged other governments to follow suit.

As the UK's financial watchdog which looks to regulate financial markets and promote healthy competition, the Financial Conduct Authority (FCA) aligned with this thinking and enforced a handful of schemes to help fire up the economy. One of these came in March, when the FCA asked for views on removing the £100 contactless limit. With the feedback digested, the FCA announced in December that it would enable flexible contactless card payment limits from March 2026. Other FCA-backed initiatives included the launch of an open finance accelerator and a new commercial scheme for variable recurring payments.

At the same time, the European Council and Parliament reached an agreement on amending the existing second payment services directive (PSD2), which they said will step up the fight against fraud and increase transparency for consumers.

Cards and digital wallets deserve an honourable mention here too, with a raft of top providers like Revolut, Monzo, Visa, Kraken and Klarna extending their offerings across the continent.

2025: A year of volatility and progress

Given the trade wars, supply chain shifts, and market volatilities that shaped the macroeconomy of 2025, the level of progress and technological innovation has been breathtaking. The most influential development was undoubtedly AI, which was invested in, developed, and launched by FIs large and small. By end-2026 these projects will have matured, and their long-term impacts will be clearer.

Stablecoins started on a long journey toward mass adoption too, with banks increasingly weighing up their applications in payments, remittances, lending, savings, and more. Ultimately, much of this change has been supported by regulators - and the hope among many is that this relaxed environment will prevail, ensuring growth and innovation well into 2026.