By Murray Cambell, Product Manager, AutoRek

The complexity and volume of data in the financial services industry is growing at an unprecedented rate. As we move into 2025, a rapid evolution of technology is set to redefine how businesses operate, connect, and grow. This will open the door for more efficient data management, streamlined operations, and the opportunity to implement innovative resource-saving solutions.

In this article, we’ll explore the key trends shaping the industry in 2025, including the expanding role of AI and automation, how Application Programming Interfaces (APIs) will enable greater connectivity, and the potential of digital assets to transform how financial service firms operate.

AI and automation: driving efficiency

A report conducted by the Bank of England and the Financial Conduct Authority revealed that 75% of firms (and 95% in the insurance sector) were already using AI in 2024, while 10% said that they were planning to adopt AI within the next three years. Although the industry might be agreed on the importance of using this technology in general, the full breadth of its applications is only now beginning to come to fruition.

For example, in back-office operations the adoption of AI and automation remains largely untapped but offers immense opportunities. Many firms continue to rely on Excel spreadsheets and other technologies that struggle to keep up with the pace of change.

Due to the speed at which technology progresses, even solutions implemented five years ago can be considered “legacy tech” if they do not allow for interoperability between systems, let alone those implemented 20 years ago. By replacing these outdated tools with automated and AI tools, in 2025 firms can streamline claims and payments, improve fraud detection, and find ways to enhance customer support.

With more data than ever before, automated reconciliation will play a vital role. This technology will give valuable time back to skilled employees, letting them work on higher value tasks like investigating and resolving exceptions, while automated tools handle repetitive activities like data ingestion in the background.

While firms may enjoy unparalleled gains in efficiency through the use of AI and machine learning, there is also understandable concern about the potential risks posed by such technologies. Firms need to be clear on the associated risks and the extent to which they can rely on the output from AI solutions.

Recent scrutiny on the Big Four firms for having failed to meet regulatory standards underscores the need for greater transparency. But with 62% of firms in agreement that keeping up with regulatory compliance has become more difficult during the last five years, and as fines for failures in client money protection become more punitive, AI and automation could offer much needed solutions. For example, by storing data in a single unified database and validating and tracking every data point, automated reconciliation platforms let auditors see the full data lineage from ingestion to enrichment, matching, sign offs and journal entries. This provides an audit trail that can be referenced when reporting.

APIs: the future of integration

APIs will continue to be the backbone of integrated financial services firms. By streamlining communication between platforms, APIs will create faster transactions, real-time data ingestion, and more responsive workflows.

Gone are the days of manually uploading file-based bank statements into reconciliation platforms. An API connection can pull data directly from the bank’s system, cutting out the need for file exports, transfers, and loading. When reconciling data from 10 or more sources, these out-of-the-box connections drastically reduce complexity and eliminate much of the manual labour that was once required.

APIs are driving operational efficiency across the board, giving firms the opportunity to gain a competitive edge. The scalability they unlock will allow businesses to easily manage the ever-growing volume and complexity of transactions and data. As firms across the industry prioritise building scalable and flexible tech stacks, APIs are a clear path toward achieving efficiency with real time insights.

Digital assets: complexity meets opportunity

Elon Musk will soon take up a position in the White House and his influence may see digital assets play an even bigger role in shaping the financial services industry. With the price of Bitcoin surging to record highs in early December and other cryptocurrencies like DOGE expected to skyrocket in the new year, digital assets and tokenisation signal a massive shift in how businesses approach reconciliation and payments processing.

We’re also seeing growing experimentation with Central Bank Digital Currencies (CBDCs), which, unlike traditional cryptocurrencies, operate under centralised governance. Governments worldwide, including the UK, China, and India, are actively exploring CBDCs as part of their economic strategies. For now, this points to a near-future where physical and digital assets coexist, adding more complexity to manage rather than replacing traditional systems outright.

Reconciling the two worlds will become an essential focus for financial institutions, as managing this will be critical to success. The continued interplay between centralised and decentralised systems, and therefore digital and physical assets, will require firms to make long-term investments in automated reconciliation technology.

Whether through traditional crypto, tokenised assets, or CBDCs, digital assets are forcing firms to rethink their basic processes. Firms that embrace automated technology will be more likely to stay afloat.

Get ready to embrace change

The financial services industry stands at a precipice. Legacy systems and outdated processes are no longer viable in a world driven by real-time processing, AI breakthroughs, automation, and API integrations. These technologies bridge the gap between technology and operations, offering great potential to those ready and willing to embrace them.

In 2025, to remain competitive businesses must prioritise innovation and adaptability. By replacing outdated systems with modern, integrated solutions, financial institutions can position themselves for long-term success.