The year the industry stopped experimenting and started transforming
10 Dec 2025
Industry leaders reflect on 2025’s shifts and milestones, highlighting the transformation underway and the key trends shaping the future of financial services
Image: ngampol/stock.adobe.com
What were some of the key issues facing the market in 2025?
Joerg Ambrosius, Executive Vice President, President of Investment Services at State Street
The defining feature of 2025 was the cost and complexity of operating in today’s asset-servicing landscape. Rising regulatory demands, cyber-resilience expectations and the continued push for data transparency have made it harder for smaller or less technologically mature providers to keep pace. As a result, consolidation accelerated across the year as firms sought partners with the scale, infrastructure and investment capacity required to remain competitive.
This was also the year in which the importance of scale became clearer than ever — not scale in isolation, but scale paired with modern technology, strong integration discipline and specialised capabilities. Institutions increasingly gravitated towards providers that are able to couple global reach with proximity, strong data foundations and a high-touch service model.
The firms that succeeded in 2025 were those that could combine end-to-end transparency with resilient infrastructure and harmonised standards across markets, enabling more consistent service and better onboarding experiences for clients.
Gary O’Brien, Head of Bank and Broker Segment Strategy, Securities Services at BNP Paribas
In 2025 we have seen the continuation of key trends including flight to quality, digitisation, and collaboration. Financial institutions continue to consolidate their activity with best of breed providers across markets and regions to benefit from greater efficiency and best practice from their partners.
Obviously, there’s also a continued focus on digitisation to further improve automation and data availability alongside a continuation of pilot use cases focused on digital issuances and tokenisation. These aspects aim at increasing access to new and evolving asset classes whilst also streamlining the post trade aspects of traditional markets. These two trends have further highlighted the growing importance of collaboration.
Collaboration amongst financial institutions and fintechs has been key for enhancing market solutions for investors and issuers. Some of the examples are our appointment of Proxymity for Proxy Voting solutions and our appointment of Broadridge for Class Actions related activities on behalf of our clients, as we aim to continue creating an enhanced asset servicing experience for our clients across markets and regions.
Theo Wasserbeg, Country Manager, UK and Ireland at Embat
We were at Google’s Gemini Founders Forum when they named it: AI theatre, the gap between what looks transformative on stage and what actually survives in production. For treasury teams in 2025, that gap became impossible to ignore. The pilots that would “revolutionise forecasting” or the dashboards promising “real-time visibility”? All brilliant in the boardroom; all dead within weeks of meeting messy, exception-ridden reality.
What 2025 actually delivered was clarity. AI pilots are easy, but AI-first workflows are hard. The difference comes down to ownership: progress only happened when the people closest to the work could design, adapt, and trust their agents.
Without the right infrastructure, even the best AI stayed trapped inside the team that built the demo. We also learned why finance automation has been stuck at a 30 per cent ceiling for two decades.
Rule-based systems crumble on exceptions; AI interprets intent. That shift isn’t incremental; it’s a new category of capability. It’s how teams moved from automating tasks to retiring entire workflows.
The real breakthroughs came from contained value: narrow, auditable AI use cases that delivered measurable, compounding wins. Reconciliation time cut by 75 per cent; forecasting accuracy above 90 per cent; audit prep shrinking from weeks to days.
Each success chipped away at the belief that complexity and rework are inevitable. 2025 settled it: modernisation is not a technology problem. It was always cultural.
The curtain has closed on AI theatre. The teams that stopped performing and started building are already operating in a different reality, and there’s no going back.
Dirk Loscher, CEO of Clearstream Europe and Head of Custody and Investor Solutions
The year 2025 was fundamentally about laying the groundwork for future transformation; it was the year for setting up the plan. The efforts to create a Savings and Investment Union (SIU) gained significant momentum, becoming a central theme in European capital market discussions and shaping numerous strategic initiatives. In this spirit, we rebranded our German Central Securities Depository (CSD) to Clearstream Europe, a name that reflects our long-standing mission to connect the continent.
Our Pan-European CSD solution connects to almost all European markets at one platform, handling over 50 per cent of all TARGET2-Securities (T2S) settlement flows and linking a wide range of CSDs, Central Counterparties (CCPs), trading venues and market participants across Europe. Concurrently, the industry marked the 10-year anniversary of T2S. While T2S is clearly to be celebrated for its spirit of harmonisation and connection, its core objectives remain only partially fulfilled, with the settlement market still facing fragmentation and inefficiency.
Despite significant efforts from the CSD community to build links and overcome national barriers, T2S has in many ways remained an “empty highway.” Looming over all these discussions was the elephant in every post-trade room: the move to T+1.
Throughout the year, Clearstream has focused on supporting our clients and the industry to ensure a smooth transition in 2027: education, tailored support and participation in joint industry initiatives like dedicated working committees, which undertook extensive analysis to map out the existing challenges and formulate viable pathways to overcome them.
Pervaiz Panjwani, Chief Product Officer, Waystone
2025 marked a turning point for fund administration as managers confronted mounting complexity across private markets, multi-jurisdictional regulation, and a rapidly evolving product landscape.
The growth and access to private markets, including private credit and real assets, have pushed legacy in-house teams to their limits, while diverging regulatory frameworks and rising reporting demands have accelerated the shift toward consolidated outsourcing models.
At the same time, Europe’s exchange traded fund (ETF) ecosystem underwent its own structural shift: active ETFs moved firmly into the mainstream, with assets rising nearly fivefold since 2019 as investors sought differentiated strategies in a familiar, liquid wrapper. This expansion - powered by digital platforms, savings plans and global momentum from the US — has added an entirely new set of operational, governance and capital-markets requirements that managers increasingly rely on specialist partners to deliver.
Abdel Hmitti, President, Vistra Fund Solutions
Private markets assets under management are growing exponentially, but there is huge pressure on fees and profitability. As more high–net–worth individuals (HNWIs) and retail investors enter the space, the demand for transparency and lower costs will rise, putting traditional operating models under real strain.
The critical differentiator now is how firms use technology. AI and automation have gone beyond pilots and experimentation to become the main route to scaling efficiently, while improving the quality and speed of investor reporting. But the winners will be firms that use technology to elevate the investor experience and improve transparency, rather than just cut costs.
Firms must decide whether to compete as low-cost manufacturers, specialists, or platform-driven service providers. In a converging industry where the control of the client interface is becoming a major source of value, firms that can align their people, technology and business model will be best placed to succeed. While size matters, the next phase of private-market growth will reward intelligence, adaptability and the ability to deliver trust at scale.
Jamil Jiva, Head of Asset Management at Linedata
2025 was shaped by investors searching for positive returns in a tougher economic climate. Tariffs, uneven growth and stop-start markets pushed investors away from traditional equities that struggled to deliver the returns or confidence they used to. This pushed alternatives back into the spotlight. From gold to catastrophe bonds, clients wanted assets that could hold up in a difficult economic environment. The challenge was many of these instruments are complex and lack the transparency of public markets, so advisers spent more time explaining risks and terms. Because they aren’t publicly traded, you can’t go to a Bloomberg terminal to answer questions about pricing or terms and conditions of the security.
The most successful firms were able to use advances in generative AI to help demystify these products. Meanwhile, behind the scenes, firms quietly strengthened their data architecture and piloted AI tools to support analysis and reporting, setting themselves up for more ambitious adoption in 2026.
Roy Zimmerhansl, Head of Capital Markets, WTS Hansuke
2025 rewarded firms willing to move beyond vanilla securities finance. Elevated macro volatility, diverging central bank paths, and renewed equity dispersion pushed more sophisticated directional and hedging activity — particularly in equities, credit, and Asia following South Korea’s short-selling ban lift. Hedge fund de-crowding from Magnificent Seven names into broader markets created fresh borrow demand, while deep specials like CoreWeave generated outsized returns. Securities lending revenues hit record highs, up nine per cent year-on-year in H1.
The industry is straining under regulatory and plumbing pressures. Preparing for coordinated UK-EU-Swiss T+1 settlement in October 2027 — while managing divergent Basel III Endgame timelines and capital asymmetries — has absorbed significant resources. Too many firms still run legacy workflows against compressed settlement deadlines that need transformation — across repo, collateral management, and equity finance. Operational friction and capital constraints are absorbing value that should flow through to clients.
Dean McIntyre, Chief Commercial Officer, SimCorp
In the beginning of the year, we published our annual survey of 200 buy side executives, where we asked them about the top data challenges with their infrastructure. The number one challenge identified was maintaining data models and underlying metadata, followed by difficulty in ensuring data quality throughout the investment lifecycle. Our research showed that 65 percent of buy side firms were planning to consolidate systems for addressing their data challenges. Data silos will always appear when there isn’t a clear data strategy.
Different teams will have their own data needs and will create their own processes if an investment house does not have a clear plan. Our advice is to ensure you have a holistic data strategy and understand how data flows through the firm. Creating a single source of truth became critical — not only for operational efficiency but also for enabling AI adoption. We are seeing widespread adoption of AI within the buy-side to improve decision making, streamline productivity and gain operational efficiency. The main question we ask is about the foundations, ‘is your data AI ready’? Without clean, accurate data, AI can actually amplify flawed decisions rather than prevent them.
Large asset owners continue on the journey from traditional Strategic Asset Allocation to Total Portfolio Approach (TPA) frameworks, integrating public and private markets for a unified view of risk and performance. This structural shift replaces siloed asset-class buckets with an outcome-based or returns focused approach, where every investment is measured by its contribution to the total portfolio.
TPA depends on robust technology infrastructure and real-time Investment Book of Record capabilities to deliver accurate exposures across all asset classes in one unified framework. A notable milestone: CalPERS became the first US pension fund to adopt TPA in November.
Ben Challice, CEO, Pirum
Sometimes the largest hindrance to our industry can also be one of the strongest drivers of change.
In 2025, we experienced a massive awakening in the importance of technology supporting the total trade lifecycle and therefore the impact to the bottom line. The speed of digital automation from trading through to post-trade operations across securities finance is challenging market participants to prioritise efficient connectivity to counterparts and platforms.
Trading counterparts can no longer rely on fragmented legacy operations or manual processes, but deciding how to improve today’s trade flows while also shifting to new digital technology solutions, requires a delicate balance of priorities, resources, and counterparty adoption. And that’s before we even start talking about the potential impact of AI.
Joerg Ambrosius, Executive Vice President, President of Investment Services at State Street
The defining feature of 2025 was the cost and complexity of operating in today’s asset-servicing landscape. Rising regulatory demands, cyber-resilience expectations and the continued push for data transparency have made it harder for smaller or less technologically mature providers to keep pace. As a result, consolidation accelerated across the year as firms sought partners with the scale, infrastructure and investment capacity required to remain competitive.
This was also the year in which the importance of scale became clearer than ever — not scale in isolation, but scale paired with modern technology, strong integration discipline and specialised capabilities. Institutions increasingly gravitated towards providers that are able to couple global reach with proximity, strong data foundations and a high-touch service model.
The firms that succeeded in 2025 were those that could combine end-to-end transparency with resilient infrastructure and harmonised standards across markets, enabling more consistent service and better onboarding experiences for clients.
Gary O’Brien, Head of Bank and Broker Segment Strategy, Securities Services at BNP Paribas
In 2025 we have seen the continuation of key trends including flight to quality, digitisation, and collaboration. Financial institutions continue to consolidate their activity with best of breed providers across markets and regions to benefit from greater efficiency and best practice from their partners.
Obviously, there’s also a continued focus on digitisation to further improve automation and data availability alongside a continuation of pilot use cases focused on digital issuances and tokenisation. These aspects aim at increasing access to new and evolving asset classes whilst also streamlining the post trade aspects of traditional markets. These two trends have further highlighted the growing importance of collaboration.
Collaboration amongst financial institutions and fintechs has been key for enhancing market solutions for investors and issuers. Some of the examples are our appointment of Proxymity for Proxy Voting solutions and our appointment of Broadridge for Class Actions related activities on behalf of our clients, as we aim to continue creating an enhanced asset servicing experience for our clients across markets and regions.
Theo Wasserbeg, Country Manager, UK and Ireland at Embat
We were at Google’s Gemini Founders Forum when they named it: AI theatre, the gap between what looks transformative on stage and what actually survives in production. For treasury teams in 2025, that gap became impossible to ignore. The pilots that would “revolutionise forecasting” or the dashboards promising “real-time visibility”? All brilliant in the boardroom; all dead within weeks of meeting messy, exception-ridden reality.
What 2025 actually delivered was clarity. AI pilots are easy, but AI-first workflows are hard. The difference comes down to ownership: progress only happened when the people closest to the work could design, adapt, and trust their agents.
Without the right infrastructure, even the best AI stayed trapped inside the team that built the demo. We also learned why finance automation has been stuck at a 30 per cent ceiling for two decades.
Rule-based systems crumble on exceptions; AI interprets intent. That shift isn’t incremental; it’s a new category of capability. It’s how teams moved from automating tasks to retiring entire workflows.
The real breakthroughs came from contained value: narrow, auditable AI use cases that delivered measurable, compounding wins. Reconciliation time cut by 75 per cent; forecasting accuracy above 90 per cent; audit prep shrinking from weeks to days.
Each success chipped away at the belief that complexity and rework are inevitable. 2025 settled it: modernisation is not a technology problem. It was always cultural.
The curtain has closed on AI theatre. The teams that stopped performing and started building are already operating in a different reality, and there’s no going back.
Dirk Loscher, CEO of Clearstream Europe and Head of Custody and Investor Solutions
The year 2025 was fundamentally about laying the groundwork for future transformation; it was the year for setting up the plan. The efforts to create a Savings and Investment Union (SIU) gained significant momentum, becoming a central theme in European capital market discussions and shaping numerous strategic initiatives. In this spirit, we rebranded our German Central Securities Depository (CSD) to Clearstream Europe, a name that reflects our long-standing mission to connect the continent.
Our Pan-European CSD solution connects to almost all European markets at one platform, handling over 50 per cent of all TARGET2-Securities (T2S) settlement flows and linking a wide range of CSDs, Central Counterparties (CCPs), trading venues and market participants across Europe. Concurrently, the industry marked the 10-year anniversary of T2S. While T2S is clearly to be celebrated for its spirit of harmonisation and connection, its core objectives remain only partially fulfilled, with the settlement market still facing fragmentation and inefficiency.
Despite significant efforts from the CSD community to build links and overcome national barriers, T2S has in many ways remained an “empty highway.” Looming over all these discussions was the elephant in every post-trade room: the move to T+1.
Throughout the year, Clearstream has focused on supporting our clients and the industry to ensure a smooth transition in 2027: education, tailored support and participation in joint industry initiatives like dedicated working committees, which undertook extensive analysis to map out the existing challenges and formulate viable pathways to overcome them.
Pervaiz Panjwani, Chief Product Officer, Waystone
2025 marked a turning point for fund administration as managers confronted mounting complexity across private markets, multi-jurisdictional regulation, and a rapidly evolving product landscape.
The growth and access to private markets, including private credit and real assets, have pushed legacy in-house teams to their limits, while diverging regulatory frameworks and rising reporting demands have accelerated the shift toward consolidated outsourcing models.
At the same time, Europe’s exchange traded fund (ETF) ecosystem underwent its own structural shift: active ETFs moved firmly into the mainstream, with assets rising nearly fivefold since 2019 as investors sought differentiated strategies in a familiar, liquid wrapper. This expansion - powered by digital platforms, savings plans and global momentum from the US — has added an entirely new set of operational, governance and capital-markets requirements that managers increasingly rely on specialist partners to deliver.
Abdel Hmitti, President, Vistra Fund Solutions
Private markets assets under management are growing exponentially, but there is huge pressure on fees and profitability. As more high–net–worth individuals (HNWIs) and retail investors enter the space, the demand for transparency and lower costs will rise, putting traditional operating models under real strain.
The critical differentiator now is how firms use technology. AI and automation have gone beyond pilots and experimentation to become the main route to scaling efficiently, while improving the quality and speed of investor reporting. But the winners will be firms that use technology to elevate the investor experience and improve transparency, rather than just cut costs.
Firms must decide whether to compete as low-cost manufacturers, specialists, or platform-driven service providers. In a converging industry where the control of the client interface is becoming a major source of value, firms that can align their people, technology and business model will be best placed to succeed. While size matters, the next phase of private-market growth will reward intelligence, adaptability and the ability to deliver trust at scale.
Jamil Jiva, Head of Asset Management at Linedata
2025 was shaped by investors searching for positive returns in a tougher economic climate. Tariffs, uneven growth and stop-start markets pushed investors away from traditional equities that struggled to deliver the returns or confidence they used to. This pushed alternatives back into the spotlight. From gold to catastrophe bonds, clients wanted assets that could hold up in a difficult economic environment. The challenge was many of these instruments are complex and lack the transparency of public markets, so advisers spent more time explaining risks and terms. Because they aren’t publicly traded, you can’t go to a Bloomberg terminal to answer questions about pricing or terms and conditions of the security.
The most successful firms were able to use advances in generative AI to help demystify these products. Meanwhile, behind the scenes, firms quietly strengthened their data architecture and piloted AI tools to support analysis and reporting, setting themselves up for more ambitious adoption in 2026.
Roy Zimmerhansl, Head of Capital Markets, WTS Hansuke
2025 rewarded firms willing to move beyond vanilla securities finance. Elevated macro volatility, diverging central bank paths, and renewed equity dispersion pushed more sophisticated directional and hedging activity — particularly in equities, credit, and Asia following South Korea’s short-selling ban lift. Hedge fund de-crowding from Magnificent Seven names into broader markets created fresh borrow demand, while deep specials like CoreWeave generated outsized returns. Securities lending revenues hit record highs, up nine per cent year-on-year in H1.
The industry is straining under regulatory and plumbing pressures. Preparing for coordinated UK-EU-Swiss T+1 settlement in October 2027 — while managing divergent Basel III Endgame timelines and capital asymmetries — has absorbed significant resources. Too many firms still run legacy workflows against compressed settlement deadlines that need transformation — across repo, collateral management, and equity finance. Operational friction and capital constraints are absorbing value that should flow through to clients.
Dean McIntyre, Chief Commercial Officer, SimCorp
In the beginning of the year, we published our annual survey of 200 buy side executives, where we asked them about the top data challenges with their infrastructure. The number one challenge identified was maintaining data models and underlying metadata, followed by difficulty in ensuring data quality throughout the investment lifecycle. Our research showed that 65 percent of buy side firms were planning to consolidate systems for addressing their data challenges. Data silos will always appear when there isn’t a clear data strategy.
Different teams will have their own data needs and will create their own processes if an investment house does not have a clear plan. Our advice is to ensure you have a holistic data strategy and understand how data flows through the firm. Creating a single source of truth became critical — not only for operational efficiency but also for enabling AI adoption. We are seeing widespread adoption of AI within the buy-side to improve decision making, streamline productivity and gain operational efficiency. The main question we ask is about the foundations, ‘is your data AI ready’? Without clean, accurate data, AI can actually amplify flawed decisions rather than prevent them.
Large asset owners continue on the journey from traditional Strategic Asset Allocation to Total Portfolio Approach (TPA) frameworks, integrating public and private markets for a unified view of risk and performance. This structural shift replaces siloed asset-class buckets with an outcome-based or returns focused approach, where every investment is measured by its contribution to the total portfolio.
TPA depends on robust technology infrastructure and real-time Investment Book of Record capabilities to deliver accurate exposures across all asset classes in one unified framework. A notable milestone: CalPERS became the first US pension fund to adopt TPA in November.
Ben Challice, CEO, Pirum
Sometimes the largest hindrance to our industry can also be one of the strongest drivers of change.
In 2025, we experienced a massive awakening in the importance of technology supporting the total trade lifecycle and therefore the impact to the bottom line. The speed of digital automation from trading through to post-trade operations across securities finance is challenging market participants to prioritise efficient connectivity to counterparts and platforms.
Trading counterparts can no longer rely on fragmented legacy operations or manual processes, but deciding how to improve today’s trade flows while also shifting to new digital technology solutions, requires a delicate balance of priorities, resources, and counterparty adoption. And that’s before we even start talking about the potential impact of AI.
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