Retail Banker International | Banking and payments experts share sector forecasts for 2025
For over 20 years, an annual highlight at this time of the year is the release of the Saxo Bank Outrageous Predictions. This year is no exception.
John Hardy has been at the bank and involved in the annual predictions since the series launched. The predictions are always fun-and one can always expect the unexpected.
There is one notable recurring theme over the years. The bank examines scenarios that could reshape the financial markets as we know them. They do not represent Saxo Bank’s official market forecasts but here is the serious bit. Each year, the predictions serve as courageous, thought provoking, reminders for investors to account for all possible outcomes-even those that appear unlikely. And take note: often it is the outrageous that moves the market.
This year, there are eight predictions and it is a safe bet that if they were to occur, they would send varying degrees if shockwaves across the financial markets.
“The Saxo Outrageous Predictions are not exactly news and not exactly real—at least not yet. While we don’t know which stories will drive the global economy in the coming year, our 2025 predictions, from NVIDIA trouncing its Mag 7 peers to the fall of OPEC, from a bold bet on reflation in China to a great leap forward in biotech, are just as promised: outrageous,” says Hardy.
RBI 2025 forecasts (in alphabetical order by company name)
Vikram Malhotra, CEO & Co-founder, 360 ONE Global
In terms of market segment trends, one key trend in 2024 has been the strong growth of the wealth management sector in the Middle East with many private banks, asset managers, and IAMs investing and expanding in the region.
In another evolving trend throughout the year, wealth managers continued to invest in developing digital platforms to better connect with their next-gen clients and also service the entry-level high-net-worth (HNW) client segment more cost-efficiently. Steps have also been taken to integrate AI into advisory for efficiency gains initially with a larger ambition of providing customised advice at scale.
In 2024, we also saw numerous private banks and wealth managers expanding their offerings and propositions with an ESG focus. This is in response to a strong and ongoing trend of UHNW clients and family offices incorporating ESG into their overall philosophy and mandates. It is likely to gain further momentum with the ongoing inter-generational wealth transfer over the next several years.
One key trend in 2024 has been the continuing shortage of quality talent in Asia and Middle East. There has been a rise in demand for Relationship Managers (RMs) in these regions as many private banks are looking to grow their assets. With the entry of some new private banks in the Middle East market, the supply of quality talent has remained static, creating barriers to growth and straining cost-to-income ratios in the region.
Another key trend in 2024 has been the continued growth of the Independent Asset Management (IAM) sector, which has further exacerbated the talent shortage for traditional private banks. Private banks lost some high-performing RMs in 2024, who either set up their own or joined existing IAMs during the year.
Forecasts anticipated for 2025 in private banking
In terms of market sector trends, the Middle East should continue to experience strong growth and lead the league tables for the net inflow of HNW and UHNW families in 2025. This growth trend is likely to be sustained beyond 2025, as wealthy families and businesses are attracted by factors such as quality of life, personal safety, political stability, rapidly maturing financial infrastructure, and a compelling tax regime. The introduction of the Golden Visa and continuing liberalisation have been game changers in accelerating millionaire migration to the UAE. Further, factors such as adverse changes in the UK tax regime will continue to support these trends in 2025.
In terms of investment preference trends, we have already seen rapid growth in private clients’ interest in alternative assets. We expect this trend to accelerate during 2025 as private clients are more open to allocating (to alternatives) with the prospect of higher returns and more liquidity. On the other hand, alternative asset managers are investing in developing products more suited to private wealth clients and expanding wealth distribution channels to tap into the faster-growing private wealth pools. We expect wealth managers to expand their alternative product suites and recommend higher allocations to alternatives in their strategic asset allocation models during 2025 in response to these structural growth drivers.
We also expect wealth managers to increase their focus on the looming inter-generational wealth transfer in 2025. This will likely be a mix of strategies including organising next-gen events, further digitalising the wealth management journey, and incorporating younger RMs in coverage teams for large UHNW families facing imminent wealth transfers to build better connectivity with the next generation.
We expect the talent shortage challenge for traditional private banks and wealth managers to continue in 2025. Some firms have responded with initiatives such as graduate recruitment programmes to infuse and train fresh talent, and to hire from mass affluent and priority banking segments to beef up their ranks, which will continue in 2025.
We expect the trend of high-performing RMs to leave private banks and join institutional-grade IAMs to continue and accelerate in 2025. The entry of very well-established institutions such as ours, brings institutional credibility, quality, transparency, and governance standards to the IAM sector. We expect to be the key beneficiary of this trend in 2025 and beyond, including when the IAM sector undergoes inevitable consolidation with the rise in compliance factors and higher market volatility potentially putting pressure on the smaller IAMs.
Jay Blandford, CEO, Abrigo
Financial institutions will increasingly integrate automation and AI to address a combination of operational efficiency, risk management, and compliance challenges. With rising pressure from regulators, economic uncertainties, and complex fraud threats, banks and credit unions will deploy AI-driven solutions for enhanced monitoring, decision-making, and process optimisation.
AI will be instrumental in fraud detection, with advanced machine learning models helping to identify emerging fraud patterns, including AI-generated fraud schemes. Automation will also streamline compliance efforts, such as meeting CFPB 1071 reporting requirements, by simplifying data collection, analysis, and reporting workflows.
Risk management will see notable improvements through AI’s ability to predict loan performance and market changes, helping financial institutions better prepare for interest rate shifts and credit risks. AI-enhanced data analytics support deeper insights into loan portfolios, providing tools for precise pricing and portfolio management.
Institutions will increasingly utilise AI and automation to gain performance insights, improve customer experiences, fight fraud, and balance human involvement and the more efficient handling of manual, repetitive tasks.
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