Fintech in 2025: AI & sustainable finance to lead change

The financial technology (fintech) industry is poised for significant transformations in 2025, driven by emerging trends in sustainable finance and artificial intelligence. Industry leaders like Krishna Subramanyan, CEO of Bruc Bond, and Karl Durrance, Managing Director of Stripe ANZ, have laid out expectations for how these sectors will evolve in the coming year.

Krishna Subramanyan emphasises the critical role of sustainable finance in addressing climate change challenges. He underscores the impact of Article 6.4's carbon markets, expected to reduce costs associated with Nationally Determined Contributions (NDCs) by USD $250 billion annually. "The fintech industry has experienced an intensified focus on climate change and sustainability in 2024," he states, particularly noting the absence of prominent financial players at COP29 and the USD $1.8 trillion needed for climate adaptation finance.

Subramanyan predicts that in 2025, the regulatory framework surrounding carbon markets will catalyse blockchain-based carbon tracking and the development of digital Environmental, Social, and Governance (ESG) reporting tools. He notes, "Financial institutions' role in climate change extends far beyond direct funding - we shape market signals, influence investment patterns, and help determine the speed of the global transition to sustainable practices." The coming year is expected to witness a tech-driven shift towards sustainable finance, with fintech organisations globally potentially making strides in tangible climate action.

Meanwhile, Karl Durrance from Stripe ANZ provides insights into other technological advancements, marking 2025 as a year of opportunity, particularly for Australian businesses. With expected interest rate cuts in the US and Australia, businesses are anticipated to shift focus from cost control towards growth. Durrance cites a Roy Morgan report indicating that nearly half of businesses anticipate improved financial standing in the next year.

Durrance projects that agentic AI will significantly transform business operations. This advanced AI technology, unlike traditional chatbots, enables autonomous workflows that offer real-time, personalised interactions on a large scale. He predicts, "A Deloitte report forecasts that 25% of companies using generative AI will pilot agentic AI projects by 2025, growing to 50% by 2027." Embracing AI's capabilities now could position businesses at the forefront of technological advancements.

Furthermore, 2025 is likely to see Australian businesses broaden their global market reach. Despite geographic distances, the increasingly borderless world offers Australian companies new opportunities for global expansion. Stripe's research suggests that by next year, 66% of businesses globally will pursue international expansion, bolstered by payment innovations that facilitate multicurrency management and cross-border operations.

An emerging trend in the payments industry is the growing interest in stablecoins, which promise to reduce cross-border transaction fees. Durrance notes that while only 3% of Australian consumers currently use crypto for transactions, this figure is expected to rise as consumer demand increases. He views this as a prime opportunity for forward-thinking businesses to align with evolving payment preferences.

Both Subramanyan and Durrance agree that these trends are not independent but converging to create unprecedented opportunities. As 2025 approaches, the fintech industry braces for changes that could redefine business operations and sustainable finance. Businesses that adapt to these developments swiftly are likely to not only survive but become leaders in the next wave of global commerce.