Here we are again. Another year, another 12 months ahead of us full of potential and daylight.

As we noted in our 2024 review, last year we saw the rise of AI, elections and a software upgrade from CrowdStrike that triggered a massive number of system failures. Hopefully, we won’t see a repeat of that.

But what will 2025 hold? We’ve picked some highlights that we believe will form some significant narratives for the coming year.

According to McKinsey, the global cost of payments will reach a staggering $3.1 trillion by the end of 2028 – a figure that could and should be significantly reduced. The path to lowering these costs lies in investing in robust digital infrastructure, enabling real-time, secure, and seamless payments.

The payments ecosystem has made significant strides, particularly with the rise of fintech. However, many systems are still constrained by legacy infrastructure that cannot support the instant, 24/7 payment demands of modern economies. For example, the need for the UK’s New Payments Vision and the scrapping of the New Payment Architecture underscores the challenges of domestic authorities in implementing forward-thinking systems on outdated foundations.

Globally, efforts like Europe’s single payment scheme and the US push for faster payments highlight the struggle to unify fragmented payment networks. Technology offers solutions: blockchain, tokenised deposits, and AI-driven routing are poised to enhance efficiency, security, and reliability. Bank-issued stablecoins, for instance, could revolutionise digital clearing in wholesale markets by reducing friction and enabling instant settlement. 

To realise a future where payment costs approach zero, stakeholders must prioritise digital innovation. By addressing back-end inefficiencies and embracing tools like AI and blockchain, we can create a trusted, real-time payment ecosystem that benefits consumers and businesses alike.

Charles McManus, Chief Executive Officer, ClearBank.

The dynamic security landscape will certainly continue into 2025. The geopolitical climate is becoming more volatile, so ensuring that basic cyber security practices are in place remains business critical. The current climate has also increased the 'insider’ threat risk – the potential for an insider to use their authorised access or understanding of an organisation to harm that firm.

Focusing on technological advancements, post-quantum cryptography – the defence against potential cyberattacks from quantum computers – is a rapidly evolving field and building understanding around this should be a big focus for organisations in 2025. And while quantum computers may seem a long way off, there are already a lot of vendors who are starting to produce cryptography solutions that are resistant to attack by quantum computers. Organisations need to start considering their migration to these kinds of solutions well in advance of the threat materialising – the crucial first steps are to fully understand what cryptography is used throughout a business and how.

Social media targeting has also become very sophisticated and will become more prevalent next year, focusing on specific individuals in businesses. AI and Deepfakes will make this a much more challenging area for users to ensure they do not get caught out and the associated controls will need to work hard to keep pace with the change.

Bernard Wright, Chief Information Security Officer, ClearBank.

The big industry focus right now is agentic AI, whereby AI agents or bots can complete actions and interact with other AI agents to complete more complex tasks. This approach allows tasks to be divided into manageable parts, like having different agents act as product owners, developers, and testers for a project.

Looking ahead, I expect to see greater focus on smaller, more efficient models. While the market has until now largely focused on increasing model capacity, we may now be reaching a plateau. New releases from major players show less significant improvements, and there's little differentiation among them – they are continually switching places on various assessments and public leaderboards. Currently using GPT-4 for simple tasks is like using a cruise ship to deliver a sandwich.

Additionally, we’re expecting more information on the EU AI Act and its components like Horizon EU and High Performance Computing, likely driving companies to offer services to align with these laws. Governance and ethics are certainly a growing focus area (as they should be) – if we take work away from skilled individuals and put it in the hands of AI, without enough training or experts who understand AI, there is a greater chance of negative outcomes for customers. Robust AI training should be on the roadmap for every financial institution.

Matt Roberts, Head of Data Science & Analytics, ClearBank.

The rise in stablecoin usage has attracted attention in emerging markets and traditional finance institutions, which are now grappling with the promise and challenges that stablecoins present. The recent news of Stripe acquiring Bridge  has cemented stablecoin’s position as a new way to move money domestically and internationally.

As we move through 2025 and beyond, the cross-border payments landscape will continue to be defined by innovators' testing and learning. We will soon reach a tipping point for stablecoin use in payments. But to truly realise the benefits stablecoins bring to wholesale payments, banks will need to step in and deliver the infrastructure to support them. Otherwise, they run the risk of being sidelined by firms that create momentum in retail payments and look to shift that experience over to wholesale markets.

Sean Forward, Business Manager, Digital Currency, ClearBank.

2025 will be a fascinating year from a policy perspective. Open Banking is moving further into the mainstream with initiatives like the Data (Use and Access) Bill and FCA-led commercial models boosting its uptake and supporting competition in retail payments.

In the realm of digital assets, 2025 is set to be a year of consultation. The publication of HMT’s stablecoin legislation and FCA’s digital assets consultation will reignite debates on commercial, financial crime, and conduct aspects. However, with the regime not expected to be completed until the end of 2026 or later, there's a risk the UK could fall behind other jurisdictions.

Faster Payments upgrades are also on the horizon. After delays and the cancellation of the New Paper Architecture plan, HMT is expected to work with regulators and the industry to identify and deliver enhancements to the Faster Payments System by the end of 2025.

Lastly, regulators are being challenged to regulate growth. Chancellor Rachel Reeves has stated that regulating for risk has "gone too far" and has directed regulators to focus on growth, which will raise questions about long-contested rules like MREL capital rules for growing banks.

Betsy Dorudi, Head of Public Policy, ClearBank.

In 2024, the ARA and FCA tightened greenwashing policies, leading to increased enforcement to protect consumers from misleading claims. This creates opportunities for genuinely sustainable products and services to stand out as consumer awareness grows.

The EU’s Corporate Sustainability Reporting Directive (CSRD) will require more companies to invest in the visibility of value chains, stakeholder engagement, and management of sustainability risks. In the UK, companies will assess ethnicity and disability pay gap data ahead of proposed disclosure requirements, potentially accelerating the use of DE&I data.

While a key challenge in sustainable finance is ensuring transparency and traceability between financial transactions and real-world sustainability, blockchain technology can help address this challenge, and significant advancements are expected in 2025 and beyond.

Oliver Thornton, Head of Sustainability, ClearBank.