Fraud evolution, AI takeover, and borderless banking: What to expect in 2025

By Puja Sharma

The FinTech landscape in 2025 is poised for significant transformation, driven by evolving fraud tactics, advancements in AI, regulatory shifts, and increasing consumer demands. Industry leaders are preparing to address these dynamic challenges and seize opportunities that lie ahead.

Fraud Prevention: The Evolution of Sophistication

Maciej Pitucha, VP of Product & Data at Mangopay, highlighted the ongoing evolution of fraud tactics, with APP fraud leading to stricter regulations, particularly in the UK. This trend is expected to ripple globally, sparking a rise in first-party fraud or “friendly fraud.” To combat these complexities, technologies like AI, dark web insights, and device fingerprinting will become indispensable. A multi-layered approach to fraud prevention, combined with consumer education, will play a pivotal role in safeguarding financial systems.

AI: A Dual Role in Financial Services

AI’s transformative potential extends across fraud detection, risk management, and consumer personalisation. Simona Covaliu, Chief Risk Officer at PayU GPO, foresaw AI reshaping fraud detection through dynamic, real-time risk assessments and automation of compliance monitoring. However, this hinges on the quality of data, making robust governance a non-negotiable priority. Simona further emphasises that regulatory frameworks, especially in the EU, will focus on ensuring responsible AI use, influencing how organisations integrate AI into their operations.

Regulation: Shifting the Spotlight to Risk and Resilience

The regulatory landscape will demand more than compliance—it will reshape organisational priorities. With stricter EU AI regulations and heightened ESG guidelines, companies must embed risk management into their core processes. Simona underscored the importance of “compliance by design” to address rising global privacy standards and cross-border complexities. Organisations that proactively adopt integrated, AI-enhanced approaches will gain a competitive edge in this challenging environment.

Open Banking: Advancing Global Standards

Open banking will continue to gain momentum worldwide, as described by Huw Davies, CEO & Co-Founder of Ozone API. The UK’s upgrades to OBLv4, the US’s launch of Section 1033 under the Dodd-Frank Act, and progress in MENA countries signal a renewed focus on consumer-centric applications. Huw anticipates that regions like Latin America, Asia, and Africa will rapidly adopt open banking, leveraging lessons learned from early adopters. A critical milestone will be the emergence of cross-border interoperability, connecting national ecosystems and fostering global financial inclusion.

The Mortgage Market: Innovation Amidst Volatility

Jerry Mulle, UK MD of Ohpen, noted that external pressures—ranging from shifting political landscapes to changing demographics—will drive innovation in the mortgage industry. Gen Z applicants, with diversified income sources, will push providers to introduce tailored mortgage products, turning niche offerings into standard practices. The pressure to modernise legacy systems will extend from neo-banks to traditional institutions, ensuring competitiveness in an evolving market.

Conclusion: Building Resilience and Trust

As 2025 unfolds, the FinTech sector will navigate an intricate web of challenges and opportunities. From combating sophisticated fraud schemes to harnessing AI responsibly, fostering global interoperability in open banking, and adapting to changing consumer expectations, the industry must remain agile and forward-thinking. Collaboration across regulators, businesses, and consumers will be essential to ensuring resilience and trust in the digital financial ecosystem.