Financial Markets Trends in 2025

The new year is here, our predictions are too.

The financial services industry is at a pivotal moment, and rapid advances in technology are forcing firms to rethink their operations. This presents new opportunities, as well as new challenges for institutions as they face increased pressure to keep pace with increasing regulatory complexity, while staying ahead of 2025 financial market trends. 

Sumeet Chabria, Senior Advisor for Genesis Global, highlights that the industry is at an “inflection point.”

There is a growing need for firms to modernize core systems, reduce reliance on outdated and risky computing practices and take full advantage of opportunities to digitalize key areas like trading, compliance and client services. These areas, traditionally manual and cumbersome, offer significant potential for automation and innovation that could radically improve efficiency and reduce costs.

However, this will be no easy feat. The industry is facing immense challenges: regulations and compliance in financial technology are becoming more intricate, competition for top-tier engineering talent is fierce, and firms are tasked with doing more with less, especially as inflation, high interest rates, and market volatility take their toll. 

Firms that can navigate these pressures while embracing technological innovation stand to gain a competitive edge, but they will need to move swiftly and strategically. In this environment, staying ahead means not only leveraging technology to streamline operations, but also fostering a culture of innovation that allows firms to respond to shifting market conditions and customer expectations. 

This report explores some of the key upcoming 2025 financial market trends, as well as emerging technologies in financial services industry​. It will outline the key issues that firms in the financial sector are facing, and offer potential solutions.  

1. Do more with your existing team and resources

The challenge: Finding the balance between innovation, and cost control

Teams are under constant pressure to innovate and deliver more with less. This requires finding the delicate balance between innovation and cost control. Click on each challenge to learn more about what firms are facing.

Compliance in financial technology

As cybersecurity threats intensify, regulations and compliance in financial technology are becoming more stringent. Financial institutions are now facing greater pressure to ensure their systems and products meet evolving industry standards.

For instance, the T+1 settlement cycle took effect in the US in May 2024.This shortened the settlement period for most securities issuances and trades to one business day after trade, instead of two business days after trade. 

When this change came into effect, compliance systems suddenly had less time to detect and report issues.This meant they needed to be upgraded to maintain the same level of auditability and reporting as before, but with faster processing. 

As a result of changes like this, firms are significantly increasing their investments in compliance frameworks and technologies to safeguard data, mitigate risks and remain compliant with complex regulatory demands.

Restrained IT budget

Uncertain economic conditions, inflation, high interest rates, and volatile stock markets are all putting pressure on IT budgets. As a result, many firms are prioritizing essential spending. This involves focusing on core initiatives, investing in software to increase efficiency, while delaying more ambitious projects, and maintaining existing systems. Maintaining today’s infrastructure can represent up to 70% of technology budgets, according to research by Gartner.

In response to these budget constraints, there is a growing push within firms to maximize the use of existing internal technology as much as possible.

Competition for specialist engineering talent

Rapid advancements in technology such as AI and automation over the past few years have sparked a significant demand for specialist engineering talent. As innovation accelerates, the skills required to keep pace are in short supply, and a large number of companies are competing for a small pool of highly qualified professionals.

In addition to attracting experienced engineers, firms are increasingly focusing on developing emerging talent software engineers, recognizing the need to invest in training and nurturing the next generation of skilled professionals.

Even amid recent layoffs, companies are being forced to raise wages and offer more attractive benefits to retain top engineers. As a result, personnel costs now account for nearly 35% of IT budgets, according to Forrester’s Budget Planning Guide 2025: Technology Executives report. 

Meanwhile, employees are increasingly seeking more than just financial compensation. At key decision points, digital workers often place as much, if not more, importance on career development and advancement opportunities, according to McKinsey.

One way that firms are attempting to meet these expectations is through prioritizing career development through strategic investments in software. According to ISG global benchmarking data, software spending currently accounts for 21% of IT budgets, with projections indicating a 10.5% increase by 2027. This trend highlights the growing recognition of the critical role that software tools play in enhancing workforce efficiency and driving business performance.

How Genesis helps firms increase productivity

Overcoming compliance 

To address compliance challenges, you need software that has real-time operations and regulatory assurance. The Genesis Application Platform includes built-in security features such as encryption, auditing, and entitlement management, ensuring all applications are compliant by default. Our platform’s real-time core handles the low-latency, high-throughput demands critical for initiatives like the T+1 settlement cycle mentioned above. 

Tackling budget and talent restraints

To manage restrained IT budgets, one way to keep costs down is to adopt technology that integrates with existing technological ecosystems that you’ve already invested in. The Genesis platform has interoperability with identity management systems, observability tools, and deployment pipelines that allows firms to leverage their current investments. Developers can reuse existing front-end and back-end skills, reducing training and transition costs.

Our platform helps firms attract and retain specialist engineering talent by offering flexibility and avoiding lock-in. Developers can work with familiar technologies like Java, Kotlin, React, and Angular, enabling them to maintain and enhance their existing skills while safely exploring cutting-edge AI capabilities. Simultaneously, you can reduce overall reliance on specialist skills by enabling generalist developers to contribute effectively, ensuring teams can innovate and scale even in competitive hiring markets.

Increasing productivity with AI 

Another element we must consider for improving productivity is the rise in AI and automation. AI has shaken up every industry, and it’s providing many new opportunities to reshape the trading landscape too. It has made it faster and easier for firms to bring applications to market. As Stephen Murphy, CEO of Genesis Global, puts it, “To compete for market share, reduce costs, and comply with evolving regulations, bringing applications to market quickly is key.”

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A closer look at developer productivity 

• Genesis partnered with one of the world’s leading financial groups to help implement a rapid business transformation program across its securities business. This included building a Client Portal, a FX Trading Execution Platform, and custom applications around the core platform. Genesis played a key role in boosting developer productivity and accelerating speed to market. 
• Genesis ensured the robust reporting, audit features, and system interoperability required in highly regulated environments. Consolidating everything within a single core platform allowed for efficient management of complex business requirements, seamless integration of changes, and reduced support costs. 

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According to Forrester’s report, more than 90% of IT decision makers expect their budgets to increase in 2025. This creates new opportunities for firms to invest in AI and automation and other software to increase efficiency, while reducing cloud spending to optimize costs. In fact, AI tools can be effective in lowering cloud expenses by predicting usage patterns, automating resource scaling, and minimizing wasteful spending on idle resources.

There are also opportunities for firms to use AI and automation throughout the financial markets software development lifecycle to boost developer productivity. 

At Genesis, we believe that the next phase of AI-enabled software development will evolve from today’s focus on making individual developers more productive to augmenting the full software development lifecycle. Within financial markets AI solutions will need to operate within highly specific guardrails and frameworks to ensure they do not jeopardize resilience, compliance, and security.

Genesis enables clients to adopt AI safely, or ‘on guardrails’, and at scale. Genesis’ tools are designed to help developers work more efficiently, rather than replacing them entirely. “A question I get all the time is how can I reduce costs? And one of the ways to do that is to lower the time to delivery, and I find Genesis does that,” says Genesis partner Cliff Gerber, Director, Luxoft.

2. Contain, extend or replace exiting solutions

The challenge: Reducing operational and regulatory risks

Existing systems pose both operational and regulatory risks, and maintaining them is costly and inefficient. At the same time, fully replacing them is risky and expensive, as these systems often support mission-critical operations.

There are two primary solutions to this challenge. The first is to replace end-user computing (EUC) systems and carry out legacy application modernization, if feasible. The second solution is to augment existing systems using vendor scaffolding, which involves building on what you already have to minimize costs and disruption.

Our solution: Gradual, flexible modernization

Genesis’ approach allows financial institutions to quickly and cost-effectively transform their tactical solutions into robust, auditable applications, while maintaining operational resilience. Using The Genesis Application Platform to develop in-house solutions rather than relying on pre-built applications from third parties means firms can tailor their software to meet specific needs and respond more effectively to market demands.

Vendor scaffolding

The challenge: Limiting risk and dependency

As vendor systems become more integrated within firms, they are often extended with client-specific functionality. While this customization can enhance operational risk management and efficiency in the short term, it can lead to long-term challenges.

By taking this approach, institutions can improve risk regulation and compliance. They can also increase their agility to keep up with the ever evolving expectations of their customers, and reduce uncertainty. Through this iterative process of identifying, prioritizing, and removing obstacles, they can ensure the continuous delivery of value, and stay ahead of the competition.

• Increased third-party risk is one of these challenges, given the high vulnerability and heavy reliance on external providers. This includes operational and compliance risks, as well as difficulties with integration and data migration.
  
  72% of capital markets firms depend on third-parties for mission critical systems, according to a 2019 Calent report. However, third-party applications often come with high costs, limited flexibility, and few opportunities for innovation.
  
  60-80% of financial institutions struggle with third-party risk, according to research by the Ponemon Institute. Additionally, 83% of organizations have faced a third-party vendor incident in the past two years, according to Gartner.

• Vendor lock-in is another key issue. Over time, firms can become too dependent on vendor software, which limits their negotiation power. High switching costs further hinder innovation, making it both difficult and costly to explore new solutions.

“Financial companies have come into this stage today where they’re not able to get off a vendor platform easily. We call that vendor lock-in, not having an exit strategy,” says Sumeet Chabria, Senior Advisor to Genesis Global. “It’s a concern with any vendor platforms now. So companies are looking at third party risk much more closely.”

Our solution: Implementing a flexible scaffold layer 

Genesis recommends implementing a flexible, supportive “scaffolding” structure around vendor systems. This approach enables firms to build new functionality around, rather than within, the vendor systems. This decoupling approach provides firms with a valuable insurance policy, and reduces third-party vendor risk. It allows them to extend the vendor system, begin an incremental decommissioning process, or delay migration, while retaining the flexibility to migrate when needed.

Legacy Application Modernization

The challenge: Over-reliance on legacy systems

Legacy applications were not built to support continuous delivery, and many components of these systems can create significant obstacles that hinder business operations. Aging, custom applications have become bottlenecks to both business agility and growth. In fact, 79% of applications report that legacy applications hinder digital transformation. 

Over the years, the complexity and technical risk of these systems have increased, while their business fit, value and agility have declined. As a result, most of these applications are ill-equipped to keep pace with the demands of modern businesses. This makes legacy application modernization necessary.

Large banks are among the most frequent users of legacy technology. Many remain reliant on these systems because they are seen as reliable and have served the business well over time, and overhauling them would require substantial effort. However, these legacy systems often struggle to meet modern consumer expectations.

As these systems have evolved, so has the buildup of technical debt.

Maintaining and upgrading this infrastructure is also expensive. According to Gartner, at least 50% of tech expenses for large banks are spent on maintaining and upgrading existing systems. This financial strain is pushing many large firms to explore modernization strategies.

Modern technologies are far better suited to meet the demands of today’s businesses. In a survey by Gartner, 47% of respondents selected “integrate, innovate and modernize enterprise applications” as a focus for the next 12 months, making it the third highest priority overall. 

Our solution: Developing tailored, in-house solutions

Genesis provides a modular approach to modernizing legacy systems, which enables gradual and flexible modernization while ensuring continuity and reducing risks. But how exactly do we facilitate this? Our platform’s real-time core facilitates seamless data flow between legacy and modernized components, even during transitions, preventing disruptions to business-critical operations. Developers can leverage pre-built components to replicate and extend legacy logic rapidly, minimizing time-to-market. 

“Bringing software applications to market quickly is the key differentiator for banks, asset managers, and other financial firms under pressure to reduce operational costs and comply with changing regulations,” says Stephen Murphy, CEO of Genesis Global.

EUC Replacement

The challenge: Reducing errors introduced by EUC tools

In recent years, end-user computing (EUC) tools have gained popularity as an efficient way for firms to address workflow challenges. These tools empower users with little to no coding experience to build and customize their own applications. However, while EUCs can offer short-term solutions, they also introduce significant risks.

Spreadsheets are among the most widely used EUC tools, with many businesses relying heavily on them for tasks such as data analysis, financial modeling, and reporting. However, a 2024 study analyzing over 35 years of research found that 94% of business spreadsheets contain errors.

These errors can have serious consequences, leading to financial, operational, and compliance risks. According to a 2020 Risk.net survey, 66% of financial institutions admitted that EUC tools were a major source of operational risk. Meanwhile, 57% of capital markets firms reported compliance breaches linked to the use of EUCs, according to a 2020 Chartis survey.

Beyond risk, scalability and maintainability are also major limitations of EUCs. These tools are typically designed to meet short-term needs for individual users or small teams, often lacking proper documentation and long-term integration planning. Over time, this can result in higher costs, technical inefficiencies, and the creation of data silos, which can severely undermine business agility and growth.

Our solution: Accelerating the transition from EUC tools to modern, financial markets-grade applications

Many financial institutions are now ready to move away from disparate end-user computing (EUC) tools in favor of secure and compliant, enterprise-grade applications. 

Genesis supports firms in accelerating this transition. We collaborate with teams to help them leverage reusable components, templates and integrated development tools. This means institutions can quickly replace fragmented, siloed EUC solutions with secure, scalable, and compliant software. 

One example of this approach is Genesis’s Credit Risk Insurance Application (CIA) solution, which is designed to replace traditional EUC tools used by financial firms to manage credit risk. It integrates data from multiple sources and processes it according to predefined rules. By replacing error-prone EUC systems, firms can standardize their risk management process to improve risk regulation and compliance while maintaining operational continuity.

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A closer look:

CIA is a key part of the Genesis Application Platform. It has already helped firms around the world improve their operational risk management and maintain compliance.

• ING, a global bank serving over 38 million clients in more than 40 countries, has been using the CIA solution across its operations in the US, Hong Kong, and Singapore since July 2020. CIA automates the workflow for managing credit insurance transactions, and improves the firm’s operational risk management while reducing cost.

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Improve existing solutions and reduce inefficiencies with Genesis 

Our solutions are designed to help financial institutions reduce the inefficiencies, operational costs, and regulatory risks associated with legacy systems and disparate EUC tools.

Our flexible ‘buy-to-build’ approach enables firms to modernize their systems without the risks and costs typically tied to full system replacements. Meanwhile, our vendor scaffolding strategy allows firms to enhance existing solutions, reducing over-reliance on external vendors.

By replacing fragmented, outdated EUC tools with secure, compliant, financial markets-grade applications, Genesis helps financial firms to drive both efficiency and compliance across the business.

Part 3: Innovate with speed and compliance

The challenge: Innovating with limited resources

In today’s fast paced global marketplace, firms must constantly innovate and scale to increase their speed to stay competitive. With limited time and resources, they face the challenge of accelerating development while maintaining flexibility and compliance.

Our solution: Enabling rapid experimentation

The Genesis Application Platform helps teams rapidly experiment with new ideas and opportunities. This means they can take swift action, pivot when necessary, or discontinue ideas quickly—ensuring continuous innovation and increased speed to market, without compromising compliance.

Whitespace Innovation

The challenge: Taking risks, balancing budgets, and maintaining compliance 

Many firms struggle with poor coordination between product and innovation teams, particularly when exploring new opportunities. While whitespace innovation often comes with high risks and a possibility of failure, it also offers the potential for significant long-term rewards, and can offer a significant competitive advantage. 

Only 35% of firms are willing to take on the high risks associated with whitespace innovation, despite the potential for long-term gains, according to research by Cognizant. This, when coupled with a lack of engagement from business leaders, can hinder or even derail business development. 

In addition, limited IT budgets often restrict the scope of innovation initiatives, and further reduce speed to market. However, securing budget approval is just the first step. Even once funding is in place, firms face further challenges. 

Building compliant, financial-markets-grade applications is a lengthy and complex process, and many firms are struggling to find and retain the specialized talent needed to execute these initiatives successfully.

CFOs are increasingly focused on driving business growth and mitigating risk, with 28% of CFOs prioritizing IT initiatives aimed at revenue generation, 27% targeting risk management, and 25% investing in next-gen disruptive technologies, according to research by Rimini Street.

However, there’s a noticeable disconnect between the priorities of CFOs and the actions of CIOs. The research reveals that CIOs are largely focusing on controlling IT costs through investments in emerging technologies (44%), SaaS and cloud services (42%), and outsourcing application support (36%).

While CFOs are concentrating on initiatives that drive revenue growth and improve operational risk management, CIOs are primarily addressing cost control and operational efficiency. Although efficiency remains crucial, the growing complexity of regulation and compliance demands that firms remain agile, and that they are able to quickly adapt to regulatory shifts, market changes, and evolving customer needs.

Our solution: Streamlining the process

Genesis provides a structured environment for firms to experiment and innovate rapidly while maintaining regulatory compliance. The platform offers a marketplace of pre-built components and templates, enabling teams to prototype and iterate new applications at speed. Integrated compliance tools ensure applications are conformant by design, reducing the risk of regulatory delays.

For example, a leading asset management firm leveraged Genesis to develop a Primary Bond Issuance (PBI), enhancing operational efficiency and driving faster decision-making. By enabling rapid experimentation, Genesis helps firms seize new opportunities without the typical risks associated with innovation​.

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A closer look:
Primary Bond Issuance (PBI) is a ready-to-deploy solution that aggregates data from multiple sources—including analytics, compliance, and trade systems—to provide a centralized, real-time view of the market. Portfolio managers and analysts can use it to swiftly evaluate deals and request allocations.

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Market Infrastructure

The challenge: Building complex software in highly regulated environments

Developing brand new complex software in highly regulated environments is challenging, and requires a high level of engineering expertise. However, specialist engineering talent is scarce—and expensive. 

Furthermore, building, launching, and operating regulated market infrastructure is a long and laborious process. The compliance and rollout process, which ensures that software meets required standards, is complex and difficult to navigate. Even once software has been built, the compliance process can often take between four to six months. Errors and outages can have severe consequences, and destroy market confidence. 

Companies are becoming increasingly confident in adopting tech-based financial solutions.This growing trust is driven by factors such as enhanced security technologies (like encryption and multi-factor authentication) and more intuitive interfaces..

At the same time, firms are recognizing the critical need to ensure their systems are secure and compatible with the services consumers expect. According to the 2024 Gartner CIO and Technology Executive Survey, 47% of respondents identified “integrate, innovate, and modernize enterprise applications” as their top focus for the next 12 months, making it the third highest priority overall.

Our solution: Providing tailored solutions to address key challenges

Genesis works together with firms to create modern, scalable, and customized solutions designed to address key challenges such as high availability, compliance, and performance. . Our platform’s pre-built integrations with industry-standard protocols (e.g., SWIFT, FIX) and modular architecture enable firms to build and adapt trading, clearing, and settlement systems with speed and agility.

For example, Genesis helped Neptune modernize its fixed-income trading platform, delivering a scalable, resilient solution that handles approximately one billion messages daily. This approach ensures institutions can respond dynamically to regulatory and market changes while maintaining operational integrity​.

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A closer look: 
Neptune, a fixed income data distribution company, connects over 30 dealers to more than 80 buy-side firms on its platform. However, for years, it relied on outdated core technology that lacked scalability and key features. In just six months, Genesis addressed these challenges by building a new platform from the ground up.

Leveraging our platform, Neptune can effortlessly add new features, datasets, and analytics as needed. The modern graphical user interface (GUI) provides traders, analysts, and risk managers with easy access to data, helping them make informed trading decisions. Since its launch, the platform has successfully processed approximately one billion messages per day.

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Overcome legacy limitations with Genesis

In today’s competitive and heavily regulated financial markets, firms are facing increasing pressure to innovate and increase speed to market, while maintaining compliance. As demands on financial markets infrastructure grow, the complexity of developing software and ensuring compliance creates significant hurdles. 

The lengthy processes involved in maintaining compliance can delay critical project rollouts, and many firms struggle to integrate new technologies with outdated legacy systems, further complicating their efforts. To navigate these challenges, institutions must overcome legacy limitations and embrace modern technology. 

The Genesis Application Platform enables developers to quickly build and adapt applications tailored to their needs, all while ensuring compliance. This empowers firms to drive innovation, streamline operations, and meet the evolving demands of their customers.

Staying Ahead of 2025 Financial Market Trends by Accelerating Innovation with Speed and Compliance 

As we look ahead to upcoming 2025 financial market trends, it is clear that firms will face the increasingly complex challenge of balancing the urgency of innovation with the need for operational efficiency, risk management, and compliance. The firms that will thrive are those that can successfully combine technological innovation with operational flexibility.

Genesis’s flexible approach to modernization—whether through vendor scaffolding, legacy system upgrades, or the replacement of inefficient end-user computing tools—ensures firms can innovate without the costly, disruptive risks of full system replacements. 

Our platform also helps firms to accelerate whitespace innovation by enabling generalist developers to develop custom solutions quickly. This encourages experimentation and allows teams to quickly explore new opportunities, without compromising on compliance or quality. This agility is critical for financial institutions striving to stay competitive. 

Ultimately, firms that embrace this model of agile development, strategic modernization, and compliance-focused innovation will be the ones that thrive as we move into 2025.