Instant payments and AI will be dominating banking in 2025

The integration of open banking frameworks, real-time payments, and AI-driven fraud prevention tools is set to redefine financial services in 2025, enabling faster and more tailored solutions to meet customer expectations.

January 15, 2025. The financial industry is preparing for a year driven by regulatory updates and technological advancements: the EU Instant Payments Regulation (IPR) will enforce real-time transaction standards across the Eurozone, artificial intelligence will play a key role in fraud detection, and flexible systems like Request to Pay (RTP) are set to gain broader adoption. These developments are expected to adjust how banks operate and engage with their customers, according to industry experts from Mano Bank, Lithuania's first specialized bank.

Key trends to watch in 2025

1. Instant payments will gain more momentum

The EU IPR, is set for implementation for January2025-instant payments feature is becoming obligatory for all financial institutions. IPR mandates Eurozone banks to process transfers within 10 seconds.

However, research by Intix highlights a readiness gap, with only 33% of banks fully prepared for compliance. For consumers, this regulation promises faster access to funds, while banks must accelerate system upgrades to meet the demand.

This requirement ensures that banks and payment service providers within the SEPA (Single Euro Payments Area) are capable of both sending and receiving instant payments at the same cost as standard SEPA credit transfers. The goal is to enhance the speed, efficiency, and accessibility of payments across Europe, fostering a more integrated and competitive financial ecosystem.

"Increased consumer demand for speed is the main factor contributing to the adoption of instant payments. Real-time transactions provide a convenient alternative to traditional credit cards and appeal to their demand for immediacy​. As IPR set specific requirements for 2025, we expect to see a surge in transaction volumes and a better correlation between banks' needs and consumer preferences. The ecosystem will be fully ready from 2026," commented Blazgienė.

2. AI use in fraud detection and prevention

AI-driven fraud detection systems, like SWIFT's anomaly detection service set to launch this month, are enhancing cross-border payment security by identifying unusual transaction patterns in real time.
Additionally, the EU's Artificial Intelligence Act (EU Regulation 2024/1689) ensures ethical deployment of AI in fraud prevention, classifying these systems as high-risk and mandating transparency, robust data governance, and human oversight in their operation. These measures build trust while safeguarding the financial system against emerging threats.
The AI Act applies to entities operating within the European Union and those outside the EU if their activities impact the EU, ensuring a harmonized regulatory framework for AI technologies.

3. RTP integration

RTP (Request to Pay) allows businesses and consumers to manage transactions with greater transparency and control. Request to Pay (RTP) works by letting a payee send a secure payment request to a payer, who can then review, accept, decline, or adjust the terms before completing the payment directly from their bank account. The latest survey related to RTP adoption was conducted by the Euro Banking Association (EBA) in 2024, and found that 78% of participants expressed interest in RTP adoption.

According to Giedrė Blazgienė, RTP is a step forward in the development of payment systems. It will enhance both efficiency and control for businesses and consumers alike by providing a standardized framework for payment requests across the SEPA region.

"Financial ecosystem will become more digitalized and interconnected, and RTP can be that medium that will ensure seamless, secure, and efficient transactions. After implementation, it will ensure convenient payments for both merchants and buyers and create other innovative solutions. Most importantly, interoperability will eventually become mandatory for financial institutions.

"Interoperability ensures that financial systems and services can seamlessly communicate and function across borders and platforms. For example, if I travel abroad and use a payment app from my home country, interoperability would enable the payment service provider in the foreign country to accept the transaction without any technical barriers. The amount would be automatically detected and processed, making cross-border payments as seamless as domestic ones. This capability will eventually become a standard across the EU," elaborated Blazgienė.

However, the study concluded that RTP solutions remain largely undeveloped, with no dominant players in the market.

According to EBA, financial institutions should act quickly to integrate RTP services into their portfolios, leveraging this potential to enhance market position and customer loyalty while obtaining a competitive edge in FinTech industry.

4. Digital wallets and Account to Account (A2A) payments for more personalized service

Digital wallets and A2A payments continue to gain popularity, driven by demand for cost-efficient solutions. A study by Visa projects that A2A transaction value in Europe will reach $11 billion by 2029, nearly doubling its current levels.

A2A payments, powered by open banking technology, allow direct transfers between bank accounts without the need for intermediaries like card networks. Once instant payments become mandatory in Europe, these transactions will not only be faster but also seamlessly integrated across various payment providers, offering greater flexibility and efficiency for consumers and businesses alike.

"The trend for digital wallets and A2A transactions will likely continue because consumers' demand for seamless, cost-efficient solutions will only grow. The rapid adoption is happening not just for convenience but also because of an increased trust in non-traditional payment methods. A2A payments will be integrated into real-time payment systems, and as a result, it will reduce our reliance on credit cards," concluded Blazgienė.

For further information, please contact:
Raminta Lilaitė-Sbalbi
Sensus PR
raminta@sensuspr.com
Tel. No. +37062439200

ABOUT MANO BANK
Mano Bank is a financial institution dedicated to serving businesses and private clients across Europe with strong attention and personalized care. As the first bank in Lithuania to receive a specialized banking license in 2018, Mano Bank has been dedicated to providing business loans and payment services. By integrating digital technology with a cost-efficient approach, Mano Bank enables partners to save time and resources, allowing them to thrive in today's business environment.

This release was published on openPR.