Trends for 2025: IT and innovation predictions for Canadian banks

A milestone year or more of the same? 

Looking into my crystal ball, I foresee an eventful year for Canadian banks. The "Big Six”, now joined by a rising digital challenger, can expect significant customer growth, smooth sailing with regulators, and tangible IT cost savings. I’m no fortune teller – I focus on helping Canadian banks achieve their strategic goals. Recent discussions with IT and Business leaders at Canadian banks have given me a view into what they’re putting on their agendas in 2025. 

Several trends have the potential to put banks on track to realizing my predictions. That’s because many banks are focusing on steps that are likely to reap competitive and cost rewards over the long term. Some players may surge ahead of the pack in 2025 – with an enthusiastic embrace of the year’s trends. Others could lag if they take an overly cautious approach. Let’s consider some obstacles and trends poised to dominate the year ahead.

2025 hurdles: Uncertainty and competition 

Banking leaders in Canada share concerns about the incoming administration in the United States. They worry about the impact of possible tariffs on the economy. In response, many leaders are pausing or scaling back initiatives. The exceptions are projects undertaken for regulatory reasons or those likely to help banks do more with less and lower costs. However, the competitive landscape may be the hurdle that, when addressed, will lead to the most transformative outcomes.

After years of paying scant attention to newer entrants to financial services, Canada’s banks recognize the need to respond – or risk losing market share. For instance, startups are offering specialized financial services targeted at specific customer groups, such as digital wallets for newcomers to Canada. One challenger is taking market share from larger competitors by attracting small business owners with products especially for them. A newer market entrant grew by expanding from investment management into traditional banking products, such as savings accounts. Its assets under management (AUM) have increased from CA$9.7 billion AUM in 2020 to CA$50 billion AUM in 2024.

2025: Trends counter obstacles

Pause projects or keep investing? Banks that continue to invest in areas that offer competitive advantage and cost efficiencies can expect to thrive. We see banks concentrating on efforts in four promising areas:

• Automation: When you automate processes, you reach the pinnacle of efficiency. That is why we’re seeing a focus on automation in Canada and other banking markets. Intense pressure to do more with less – faster – makes automation a top goal for IT leaders. Plus, recent advances in machine learning and generative AI (GenAI) make it possible to automate more complex processes. Areas ripe for automation include quality assurance testing, product personalization, compliance, and IT operations.
• New products/stickiness: To compete with newer market entrants, banks want to improve the omnichannel customer experience. That’s taking shape as efforts to introduce new products and enhance loyalty with enhancements built around personalization. Investments in better digital banking have helped to combat all-digital brands. Consider a big five bank’s recent creation of a digital experience that streamlines banking for newcomers to Canada.
• Accelerating innovation: Most Canadian banks have groups devoted to innovating – including product innovation. However, many promising ideas never launch. Risk aversion is one reason, and IT inflexibility is another. That’s changing. For example, a market leader recently introduced GenAI to boost productivity for its service agents and engineers. In 2025, expect banks to put more muscle behind fresh ideas to differentiate from the competition.
• Modernization: What’s obstructing efforts to innovate, automate, and release new products? In many cases, it is legacy systems. Several Canadian banks are exploring paths to modernize these platforms to increase agility and lower costs. A modern infrastructure empowers banks to unlock the benefits of cloud, GenAI, and advanced analytics while lowering operating costs by as much as 90%.

Converging trends behind predictions

This blog opened with three ambitious predictions: customer growth, regulatory success, and lower costs. Success with the four trends enables those outcomes. The trends converge to empower banks to deliver banking built around new products and innovative experiences. Modernization reduces the line-of-business silos that make it difficult to provide a holistic financial product experience to customers. Automation frees resources to uncover ideas that resonate with customers. Take family-first banking as an example of what is possible.

With family-first banking, you create an end-to-end banking experience oriented around the needs of parents, children, and seniors. Parents find financial products tailored to their priorities, like adult-directed banking for kids and bundles of banking and non-banking financial products. Automated and compliant product personalization helps generate offers tailored to individual families. Innovations like role-based access empower family members to delegate tasks. For instance, seniors can enlist family members to help with finances without the risks of password sharing. Revenue surges thanks to cross-selling and upselling success, and a just-for-me experience boosts loyalty.

Let’s make 2025 amazing

At Amdocs, we help modernize banking from the core to the customer. We have worked with over 50 banks and financial service providers to bridge the gap between business goals and legacy constraints. By ending line-of-business silos while embracing automation and personalization, banks use agility to drive revenue growth. How can we help you modernize banking? Talk to our team today.