SaaScada has outlined its predictions for the financial services industry in 2025, focusing on multigenerational banking, ESG business models, and the adoption of Core Banking as a Service (CBaaS).
SaaScada foresees multigenerational banking as a key trend that will support families while enhancing banks' financial stability. Steve Round, Co-Founder, comments, "Multigenerational households are on the rise in the UK, and next year banks will rush to capitalise on this growing market and reap the rewards of a rare win-win situation. Multigenerational banking offers a huge opportunity for banks to retain, and expand, their existing customer base in a more cost-effective way than traditional, costly new business acquisition."
He further elaborates, "By lending to younger generations while taking care of savings for the older generations, banks can strike the balance between their growth and profitability — growing balance sheets and keeping net interest margins healthy with a single product. However, to do this effectively, banks must have access to real-time, accurate customer data so they can offer hyper-personalised services that meet the complex needs of a multigenerational customer base."
In the environmental, social, and governance (ESG) sphere, banks are predicted to integrate ESG principles more deeply into their overall business practices. Round states, "In the vast majority of organisations, ESG exists in a vacuum, as a separate team or in the form of CSR initiatives. In 2025, as the industry tries to tackle rampant climate breakdown, banks will start asking themselves: why shouldn't every product have an ESG element baked in? Even if it comes at the 'cost' of a fraction of a percentage point of reduced interest on a banking product to incentivise customers, the benefits of these products will far outweigh their costs."
He continues, "Banks can no longer afford to bury their heads in the sand when it comes to values-driven banking. We need to transform mindsets across the industry to support any green innovation. ESG-friendly products aren't all or nothing, and the media — as well as other banks — must support efforts to drive green banking products forward, even if they don't cover every base at the same time."
Nelson Wootton, CEO and Co-Founder, highlights the importance of the Digital Operational Resilience Act (DORA) in transforming reporting processes within banks. "As ever more stringent regulatory and reporting requirements push banks to the edge, DORA will be the catalyst banks need to modernise their core systems and overhaul their outdated reporting processes. Long gone are the six-week reporting windows banks are used to, with 24 hour reporting the new norm," Wootton notes.
He emphasises, "One crucial aspect of DORA for banks is the need to report on 3rd party risk to ensure resilience. Ensuring compliance will be a time-consuming process as banks must vet every technology vendor that plays a part in delivering their banking services, to ensure that their infrastructure remains robust - and fully compliant."
The transition to a Core Banking as a Service model is anticipated to be transformative for the industry. Wootton explains, "In 2025, the way core banking systems are delivered and consumed is going to change dramatically. Soon, you will be able to spin and swap core banking just as you would your CRM - something that would have been unthinkable 10 years ago."
He adds, "Core banking systems are the beating heart of finance. Core banking infrastructure enables all the back-end magic that helps banks to process transactions, providing the system of record that ensures that books are balanced, reports are accurate, and the ledger is healthy." Wootton concludes, "The move to a CBaaS model will be a game-changer, and unlock huge opportunities for fintechs and challenger banks looking to disrupt the established order. CBaaS gives organisations a self-service way to rapidly build best-in-class banking products, while de-risking the implementation process, and using real-time data to reduce compliance risk and ensure transparency and confidence."
