Retail banking’s next big leap: 3 Game-changing trends for 2025

By Gloria Methri

The retail banking sector is poised for a significant transformation in 2025, with financial institutions focusing on enhancing digital experiences, expanding FinTech partnerships, and leveraging data-driven strategies. These insights emerge from the newly released 2025 Retail Banking Trends and Priorities report, authored by industry expert Jim Marous and published by Digital Banking Report. Commissioned by Q2 Holdings, Inc., the report is based on a global survey of banks and credit unions.

The findings highlight three key priorities shaping the financial services landscape in 2025:

Enhancing the Digital Experience: Over 52% of financial institutions rank improving digital banking experiences as their top priority, highlighting the sector’s commitment to seamless and user-friendly interactions.

Leveraging Data and Analytics: The use of data-driven insights for personalised customer engagement saw a significant 8% increase, rising from 27% in 2024 to 35% in 2025.

Expanding FinTech Partnerships: Collaboration between traditional banks and FinTechs continues to grow, with 64% of financial institutions already forming partnerships and an additional 17% planning to do so by 2025.

Jim Marous, CEO of Digital Banking Report, highlighted a critical gap in the sector’s digital transformation efforts. While more than half of institutions are focused on digital experience enhancements, only 25% are prioritising modernising legacy systems, which could hinder their long-term agility.

“The 2025 Retail Banking Trends and Priorities report highlights an industry at an inflection point,” said Marous. “Without significant investment in back-end infrastructure, financial institutions risk stalling their transformation efforts.”

Credit Unions: A Unique Focus on Modernisation

A dedicated section in the report, featuring insights from Mark Sievewright, Chief Strategy Officer at SRM, examines the evolving priorities of credit unions. In 2025, credit unions will prioritise:

• Updating legacy operating systems (46%)
• Enhancing the digital experience (42%
• Reducing operating costs (42%)

Kirk Coleman, President of Q2, emphasised the importance of AI adoption, personalisation, and strategic partnerships as banks and credit unions navigate digital transformation.

“By prioritising personalisation, strategically adopting AI, and forming innovative partnerships, financial institutions can transform routine banking transactions into meaningful customer engagement. This strategy will ultimately increase account holder satisfaction, foster loyalty, and help these institutions differentiate themselves in the marketplace,” said Coleman.

As competition in retail banking intensifies, institutions that invest in digital-first experiences, modern infrastructure, and data-driven decision-making will emerge as market leaders in 2025 and beyond.