As we step into 2025, the global fintech market is buzzing with excitement and possibilities. The industry is expected to hit a staggering $340 billion this year, and the pace of innovation shows no signs of slowing down. At M2P Fintech, we closely watch how technologies like AI, machine learning, and RPA are transforming the way we experience financial services.
That being said, from AI-powered wealth management tools to the new innovations in neobanking, here are 10 key predictions we believe will shape the future of fintech in 2025.
1. Embedded Finance will surge
Embedded finance industry is projected to rise drastically in 2025, and in the upcoming years, it is estimated that embedded finance market will grow from $115.8 billion in 2024 to $251.5 billion by 2029 globally. This industry has diverse applications, from payments and banking to investing and beyond.
Embedded finance will play a pivotal role in digital businesses, as the consumer seeks a more seamless and integrated experience. Embedded finance in India is expected to flourish from $5.8 billion in 2024 to $28.6 billion by 2029.
Trends that are likely to shape this space include AI and automation, blockchain and smart contracts, PSD3 regulations, and connected industries. As more consumers realize the convenience and value of embedded finance, its adoption will continue to rise.
2. Robotic Process Automation (RPA) to expand its role
Robotic Process Automation (RPA) in financial services is set to evolve beyond the basic automation in 2025. Driven by trends such as hyper-automation, advanced AI integration, and the emergence of RPA-as-a-service, the global RPA market is projected to reach $13.87 billion by 2028, at a CAGR of 24.31%. In India specifically, the market for RPA is anticipated to reach $787.3 million by 2032.
With more and more organizations prioritizing cost savings, high productivity, and a neat customer experience to meet the demands, making the market for automation is expected to expand wider. This growth enables FIs to automate complex processes and enhance operational efficiency and customer service, all while ensuring compliance with regulatory standards.
3. Wealthtech industry is on an upward trajectory
The wealthtech industry is primed to experience rapid expansion in 2025 with a projection to reach $12.07 billion by 2030, at a CAGR of 13.9%.
The combined wealth of millennials and Gen Z, along with their preference for digital-first solutions, will drive innovations in the wealth management space. The integration of wealth management with gaming and social media will enhance the adaptability of the wealthtech platform.
The rise of digital portfolios, rather than the physical assets, marks the investments in the financial instruments, which now make up 33% of India’s GDP. Especially post-pandemic, the usage of mutual funds and demat account inflows reached unprecedented levels.
Looking forward to 2025, India’s wealthtech market carries immense potential; traditional hubs like Delhi and Mumbai continue to drive growth. Tier-2 and Tier-3 cities offer untapped markets for first-time investors who are eager to invest in these digital portfolios according to their risks and needs.
4. Blockchain to take the lead
The finance industry will gain more momentum in the blockchain race, as the technology is heavily focused on cheaper and faster financial transactions across borders. In the future, the adoption of blockchain will rise significantly to build more transparent and secure financial systems.
At a CAGR of 82.2%, experts anticipate the global blockchain market to reach $1,235.72 billion by 2030. As consumers across the world need secure transactions, the opportunity for blockchain technology will immensely grow in the near future. Security and transparency, decentralization, and efficiency will boost the rise of blockchain technology.
India’s blockchain market is predicted to reach revenue of $53,182.9 million by 2030, at a CAGR of 89.4%. Scalability, regulation, complexity, energy consumption, and security are the major challenges blockchain technology must overcome for its growth.
5. AI will transform the industry
This year, artificial intelligence (AI) is expected to revolutionize the fintech industry by improving operational efficiency and customer experiences. Projections indicate that the market for AI in fintech will reach $31.71 billion in 2027, steered by factors such as threat prevention, preventive analysis, demand for personalized user experience, high security, and faster transactions on the go.
On the other hand, experts predict that India’s market will reach $8.30 billion in 2025, at a CAGR of 27.86% to reach a market volume of $28.36 billion by 2030. By leveraging AI, fintech companies aim to create more inclusive financial ecosystems, ultimately making financial services more accessible and responsive to diverse consumer needs.
6. Internet of Things (IOT) in fintech is set to snowball
By 2029, the global IoT market is projected to reach $1.56 trillion with a 10.49% increase in market volume. With advancements in 5G connectivity, digital twin technology, edge computing, AI and ML, and blockchain, the rise of IoT looks promising.
The Indian market of IoT is projected to expand to $49.82 billion by 2029. From smart payments to data-driven risk management, the IOT-fintech synergy is about reimagining financial services by creating personalization, security, efficiency, and accessibility for the consumers.
The combination of IoT and fintech presents a unique opportunity that could transform the way customers bank, insure, invest, and transact financial opportunities.
7. Buy Now, Pay Later (BNPL) will mature
BNPL is expected to thrive in 2025, with the global market reaching $344 billion. Financial analysts attribute this growth to several factors, including the rising adoption of digital wallets and mobile payments, improved credit assessment models, increased regulatory oversight, and growing consumer demand for flexible and inclusive payment options.
In India, the BNPL market is set to experience notable market expansion, estimated to reach $17.96 billion by the end of 2025. Surge in e-commerce, digital P2M payments, and increase in millennial and Gen Z consumer spending capacity would fuel this growth.
While the competition among payment service providers is expected to drive innovation and accessibility, analysts suggest high interest rates and associated fees can potentially hinder growth and adoption.
As the sector matures, it is likely to undergo consolidation, with market players focusing more on responsible lending practices. This shift will be driven by growing scrutiny from financial regulators, ensuring that BNPL services remain sustainable and consumer friendly.
8. Open Banking to become more popular
The state of open banking in 2025 looks incredibly promising and transformative. Open banking is set to become more popular in regions like the UK and Europe, making the global open banking payments transactions value increase to $330 billion by 2027.
On the other hand, with financial institutions, regulators, and fintechs working together, the sector will see significant developments, enabling secured data sharing and collaboration between financial institutions, customers, and companies.
In India, the open banking market is forecasted to reach a revenue of $7,485.8 million by 2030, at a CAGR of 29.8%. Further, financial analysts predict that artificial intelligence will play a crucial role in open banking by improving fraud detection, offering more accurate financial analytics, and providing personalized recommendations.
9. Neobanking sector will flourish
2025 looks like a promising year with stellar growth and innovation for the neobanking market. Emerging trends such as the increasing adoption of AI, digital partnerships, shared banking, personal finance combined with market expansion, a digital-first approach, personalized services, and the integration of blockchain technology are expected to fuel this growth.
The low-cost model for end customers, which offers extremely low monthly fees for banking services like minimum balance maintenance, withdrawals, and deposits, will propel the global neobanking market to reach $394.6 billion by 2026.
While the neobanking market in India is set to reach $138.70 billion in 2025, its success is based on the adoption by millennials, micro, small, and medium enterprises (MSMEs), and those who have high income and earnings.
10. Gamification market is expected to boom
Gamification is emerging as a pivotal trend in the fintech sector, significantly enhancing customer engagement and retention. This trend is expected to strengthen substantially in 2025, driven by increased adoption across various sectors, including banking and retail, as businesses leverage gamification to enhance customer experiences and foster loyalty.
In India, the gamification trend is gaining momentum as fintech apps are adopting gamification strategies that resonate with local users. Elements such as rewards points, badges, and challenges motivate users to engage more deeply with apps. This not only enhances user engagement but also promotes financial literacy among the younger demographic.
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