Future of Financial Services in the UK – Consumer Insights
Nearly a third of under-35s are keen to use AI tools that can highlight cost savings by switching to different providers or suggesting new products. The rising cost of living is driving interest in both new providers and new tools, as well as boosting willingness to share financial data to access guidance and cheaper deals. This will bring heightened opportunities for disruption from innovative FinTechs and new financial providers.
UK Financial Services Industry Trends
Digital banks will pose a bigger threat to high street banks by 2030. 57% of people think digital banks will be just as appealing as high street banks in five years’ time, rising to 69% among Gen Z. This is despite the majority of people believing there will still be a need for branches in the future. As branch networks decline and digital banks prove their longevity and gain trust, there is increasing scope to gain main account market share.
The biggest opportunities will come through AI and its role in more personalised and dynamic financial products. Already we have seen the launch of FinLLM – the UK’s first dedicated large language model for financial services. If consumer awareness and trust can be strengthened, budgeting, product research and financial guidance could be taken to the next level through such innovation.
This report looks at the following areas:
- How consumers feel about their financial prospects for the next five years, and financial priorities moving forward, with many focused on building up savings to boost resilience in an uncertain world.
- Comfort with newer financial providers and FinTechs, and the main factors that will encourage people to choose these brands over established providers.
- The evolution of payments and technologies people expect to grow by 2030, with mobile payments reaching record levels and already offering a fast, convenient option.
- The impact of AI on financial services in the coming years, and which tools consumers are interested in using.
- Consumer attitudes towards the future of financial services, including expectations of digital banks growing, improved sustainability and concerns over retirement plans.
About the Report
| Report Attributes | Details |
|---|---|
| Published Date | June 2025 |
| Consumer Data | 2,000 internet users aged 16+, March 2025 |
| Number of Pages | 73 |
| Demographic Breakdown | Generation – Generation Z, Millennials, Generation X, Baby Boomers |
| Competitive Strategies & Launch Activity Featured | NatWest, Aveni, Klarna, Mastercard, Curve Wallet, Monzo, Revolut |
Meet the Expert Behind the Analysis
This report was written by Adrian Reynolds. Adrian has over a decade of experience working in research and insights. He joined the technology and media team in 2017, having previously worked as a TV analyst. Since January 2022, Adrian has focused on financial services and FinTech. He holds a BSc in Business Administration and a Master’s in International Business.
AI is set to drive the pace of innovation in financial services in the next five years, bringing greater scope for disruption and more personalised services.
Adrian Reynolds
Associate Director
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EXECUTIVE SUMMARY
- Opportunities for the future of financial services
- The future of financial services is more personalised
- Rapidly-evolving AI will bring new opportunities for financial services
- Don’t underestimate the human touch
- Market dynamics
- The economic environment has hit FinTech funding and valuations
- The number of bank branches will decline further, but consumers are not ready to let go
- Cash will still play a big role over the next five years, despite the growth of contactless payments
- Graph 1: payment methods used weekly, 2025
- What consumers want and why
- Consumers remain largely optimistic that their financial situation will be improved by 2030
- Graph 2: financial sentiment for the next five years, 2025
- After five years of instability, building financial resilience is the priority for many consumers
- Graph 3: consumer financial priorities for the next five years, 2025
- Cost savings are the key factor as more people accept new providers due to the challenging economic environment
- Graph 4: important factors in considering new financial providers over established providers, 2025
- New payment technologies could struggle due to the speed and efficiency of mobile payments
- Graph 5: payment methods consumers expect to become popular in five years, 2025
- Trust will be key for AI tools but innovations could transform financial services
- Graph 6: interest in AI tools that use financial data, 2025
- Customers still see a need for bank branches in 2030, but expect digital bank growth
- Graph 7: attitudes towards the future of financial services, 2025
- Innovation and marketing trends
- AI will play a greater role in banking over the next five years
- AI innovations can disrupt financial services and payments
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MARKET DYNAMICS
- The FinTech market
- It has been a challenging time for FinTech brands
- Digital banks are BNPL brands lead the way in fintech usage
- Graph 8: awareness and usage of FinTech brands, 2023
- Trust is the major issue for new financial providers as they establish themselves
- Graph 9: trust in new financial providers, by financial product, 2023
- Regulation is essential but trust still takestime
- Market drivers
- Consumer financial confidence is likely to remain fragile amidst global uncertainty
- Graph 10: financial confidence index, 2020-25
- Graph 11: financial wellbeing index, 2020-25
- Long-term rise in house prices is hitting affordability
- Growing reliance on renting could drive disruption in the housing market
- The Consumer Duty should have more impact over the next five years
- Graph 12: behaviours towards Consumer Duty regulation, 2024
- Digital banks’ market share growth will prove slow
- Graph 13: current account ownership, by types of provider, 2024
- Branch networks will decline further but consumers are not ready to let go
- The demand for bank branches will continue
- More branch closures are expected in the coming years with customers focused on digital channels
- The focus on sustainability is likely to grow again over the next five years
- Graph 14: importance of sustainability when choosing a new main bank, by generation, 2024
- Contactless payments will grow but cash will still be important over the next five years
- Graph 15: payment methods used weekly, 2025
- Cryptocurrency investment will continue but it will not make inroads as a viable payment by 2030
- AI will play an increasing role in financial services but there is a need to boost trust
- Graph 16: use of AI tools, 2024
- AI can drive innovation in insurance but policyholders remain wary
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WHAT CONSUMERS WANT AND WHY
- Consumer financial expectations
- There is some optimism after a particularly challenging five years
- Graph 17: financial sentiment for the next five years, 2025
- Younger generations are confident they will be better off in 2030
- Graph 18: financial sentiment for the next five years, by generation, 2025
- Global uncertainty is making financial planning increasingly difficult
- All generations are finding it more difficult to make long-term plans over their finances
- Graph 19: “I find the world too uncertain to make long term plans about my finances”, by generation, 2025
- Financial priorities
- The main priority for consumers is building up financial resilience
- Graph 20: consumer financial priorities for the next five years, 2025
- Younger consumers are being drawn towards higher risk investments
- The wide range of priorities by generation highlights the need for financial providers to tailor products and services
- Consideration of new financial services providers
- Younger consumers are comfortable with using new financial providers
- Graph 21: consumer comfort levels with using new financial providers, 2025
- Consumers are more willing to risk new providers if the cost savings are clear
- Demonstrate net cost savings to draw people away from established brands
- Graph 22: important factors in considering new financial providers over established providers, 2025
- Strong customer service is vital for newer providers or customers will return to established brands
- Newer brands should highlight superior sustainability records
- The rising cost of living will heighten opportunity for disruption in financial services
- Graph 23: “the rising cost of living makes me more likely to consider new financial providers over established ones”, 2025
- The future of payments
- Convenience of smartphone payments will make it difficult for other payment tech to break through
- Graph 24: devices used to make payments in the last three months, 2024
- Device payments are the norm for younger consumers
- Many expect growth in facial recognition but privacy and speed issues are likely to limit use
- Graph 25: payment methods consumers expect to become popular in five years, 2025
- Biometrics lead the way in consumer expectations of payment evolution
- Smartwatch payments are likely to grow but smartphones will still dominate
- Graph 26: payment methods consumers expect to become popular in five years, by generation, 2025
- Younger consumers have more faith in cryptocurrency becoming a viable payment option
- Interest in AI in financial services
- AI tools in financial services will need to overcome scepticism and concerns over data security
- Graph 27: interest in AI tools that use financial data, 2025
- AI auto-switching could help credit card holders ensure they have the best value deal
- Utilise AI to provide guidance and new products to younger consumers
- AI can offer more personalised and dynamic financial advice
- AI will drive innovation in budgeting tools
- Graph 28: interest in AI budgeting tools, by generation, 2025
- Attitudes towards the future of financial services
- Digital banks have potential to increase market share if they can instil trust
- The increasing shift towards digital channels will bring opportunity for digital banks
- There are widespread concerns over saving for retirement
- Workers need support to start retirement planning from a young age
- Older consumers will take more convincing to use AI and other new tech in financial services
- Graph 29: concerns that technology in financial services will increase the risk of scams, by generation, 2025
- Younger demographics are optimistic on banking sustainability
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INNOVATION AND MARKETING TRENDS
- Competitive strategies and launch activity
- AI is going to play a greater role in banking over the next five years
- NatWest collaborates with OpenAI and is exploring a wide range of AI projects
- Aveni launches the first dedicated generative AI for UK financial services
- Klarna case highlights the difficult balance in cutting staff in favour of AI
- Payments providers are investing in anti-fraud measures as scams evolve with AI
- Curve Wallet looks to provide competition to Apple Pay
- Agentic AI could disrupt shopping and payments
- Monzo adds contents insurance as digital banks continue to expand offerings
- Revolut is integrating AI and expanding into mortgages
- Revolut looks beyond financial markets and looks to disrupt telecoms
- Advertising and marketing activity
- Total advertising on financial services has declined and further shift away from TV is likely
- Graph 30: total advertising spend on financial services, by medium, 2021-24
- The high ad spend of established brands can act as a major barrier for fintechs
- Social media advertising has grown and will play a bigger role in financial services over the next five years
- Graph 31: total advertising spend on financial services, by medium, 2024
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APPENDIX
- Report scope and definitions
- Consumer research methodology
- Abbreviations and terms
- Nielsen Ad Intel coverage
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