2025 predictions: AI takes hold over the banking industry

2024 was a year of unprecedented AI adoption for financial institutions. As we discovered new use cases for the technology within the financial services industry, banks and credit unions of all sizes no doubt heard a rallying cry: “Get on board, or get left behind.” 

AI innovation has developed and matured over the past year, and so too has the industry’s relationship with the technology. As we set our sights on 2025, financial institutions will enter a new phase of the AI revolution. Now comes a paradigm shift where experimental adoption takes a backseat to more strategic initiatives, both within institutions themselves and from regulatory bodies.   

Here are five predictions for what this next phase will entail: 

1. From innovation to strategic imperative: The vast majority of AI adoption to date has been focused on a single use case, and or/it’s only utilized by a small group within the bank. Individual functions within the institution are adopting point solutions to tackle very specific issues, but these tools aren’t scalable across the business. In 2025, financial institutions that are seeing value from these point solutions will start to dig deeper into additional use cases. They’ll work to determine how value can be extracted more broadly. Instead of searching for solutions designed singularly for fraud or customer experience, banks and credit unions will be on the lookout for tools that maximize utilization without increasing complexity. 

2. Generative AI grows up: Early adoption of any new innovation is often the result of curiosity, of exploring a new solution’s potential. In 2025, we’ll see more evidence of generative AI’s impact on operations and employee experience (more on that later). As a result, financial institutions will need to formalize the adoption and roll out of these solutions. They’ll also need to identify a strategic “owner” to oversee implementation, change management, and ongoing support. Larger banks have the resources to develop “Chief AI” roles, but for the vast majority of community institutions, a clear leader will need to be appointed to oversee the transformation. That person must be able to understand the business side of the operation, as well as the technical nuances of AI. Expect to see more cross-functional teams working to drive change with AI strategy in 2025. 

3. Employee experience becomes top of mind: As AI continues its aggressive push into the banking world, the focus will swing from how it can improve the customer experience to the impact it has on employees. Across every industry, employees are currently leaning on generative AI for assistance with daily tasks. But this often occurs outside IT’s purview,  which creates a significant amount of risk. When institutions lose the ability to monitor the information that’s being shared and returned, it becomes that much easier to fall out of compliance or let sensitive data end up in the wrong hands. Banks must ensure that when they’re eyeing potential AI solutions, security is as much a part of their considerations as the value promised to employees. 

4. Regulators dive in deeper: With less than a month to go before the new year, a bipartisan committee in the House of Representatives proposed two bills that would instruct regulators to conduct an in-depth research project into the impact of AI in banking. In 2025, we can expect increased commentary around the risks and opportunities of AI, as well as a surge in guidance for how financial institutions should proceed. For a traditionally risk-averse industry, the potential of pending regulations could slow adoption as banks and credit unions wait to see what the impact of this research will be. But the strong focus to solidify the United States as “a leader in AI” suggests that the expected output in 180 days will provide the guidance and confidence needed to continue broad adoption. 

5. Agentic AI becomes too valuable to ignore: With clarity into how generative AI works and the potential use cases increasing in 2025, the ability of agentic AI to deliver immediate, quantifiable ROI will be impossible to ignore. Routine tasks can be completed instantly and with a human in the loop validate and verify. How banks operate, how they make money, and how they increase revenue will fundamentally change. Financial institutions have long been searching for ways to increase the value they provide for customers. While early adoption of AI has been focused on improving communications and engagement, as agentic AI eliminates menial tasks it will create greater opportunity to differentiate and expand beyond typical services. 

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Over the past 12 months, AI utilization has become a competitive advantage - a need-to-have rather than a nice-to-have. In 2025, we can expect to see financial institutions building out more robust strategies to maximize their investments, especially as the ROI of early adoption becomes clear. 

As those early adopters achieve more and more AI-driven wins, stragglers will once again hear that rallying cry. And as we enter the next phase of the AI revolution, perhaps this time they’ll listen.

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