It’s a year of relationship building and rebuilding for commercial banks as they navigate uncertainties around interest rates, loan growth, increasing their noninterest income, and all while getting more digital action. It demands preparation and partnerships.
Taking a multifaceted view of this decisive year, Bottomline’s 2025 Market Outlook Report: Commercial Digital Banking assembles industry research and opinions from different corners of the finance world to decode pressing matters facing B2B banking.
Instant Payments as a Revenue Driver
Instant choices are proliferating. A global sampling shows RTP and FedNow in the US, the European Payments Council’s SEPA Instant Credit Transfer, UPI in India, along with Alipay in China, and Pix in Brazil, as part of a worldwide revolution in instant B2B payments.
Businesses now expect real-time transaction capabilities to manage cash flow more efficiently and capitalize on immediate opportunities.
The 2025 Market Outlook Report notes that commercial banks worry about instant payments disrupting revenue streams “from traditional payment methods like wire transfers, as customers may opt for the faster, less-expensive payment options,” but adds this: “The reality is that instant payments can actually become a revenue driver. The key is to think in terms of payment solutions, not just payment options.” It’s a vital distinction.
Digital solutions have made seamless payment experiences the expectation, reducing settlement times from days to seconds in some cases. Commercial banks must adapt to this fast-paced environment by investing in robust payment infrastructures, ensuring that security measures can prevent fraud and cyberattacks in a fast-moving ecosystem.
Ready or Not, Here’s ISO 20022
The implementation of the ISO 20022 messaging standard poses significant challenges for commercial banks. Banks and FIs gain rich data, interoperability, and improved compliance. However, the changeover may require overhauling legacy systems. Banks must navigate the complexities of converting existing messaging formats, training staff, and ensuring a smooth migration to avoid disruptions.
“Crucially, migrating to ISO 20022 requires significant updates to or replacements of legacy systems,” according to the report. “Aging infrastructures and proprietary formats simply were not designed to handle the standard’s extensive data requirements. For instance, legacy systems that manage CHIPS or ACH do not easily align with ISO 20022’s XML-based formats.”
Gen AI for Everything?
Generative AI is rapidly transforming the landscape of commercial banking. In 2025, more banks will leverage AI-driven models to enhance customer service, automate decision-making, and create personalized business payment experiences.
Already transforming tasks from back-office processes to loan underwriting and many other aspects of B2B banking, Gen AI “is fundamentally reshaping the commercial digital banking landscape,” per the new Market Outlook Report.
“By driving personalized experiences, enhancing fraud detection, optimizing operational efficiency, and supporting strategic decision-making, AI is not just a tool for today – it is the future of banking,” it states.
That implies a brave new world of smarter chatbots and virtual assistants providing 24/7/365 support, resolving queries, and processing transactions without human intervention. Gen AI also aids in credit risk assessment by analyzing huge datasets to predict borrower behavior, as well as detecting fraudulent activities within vast amounts of data.
As Gen AI continues to evolve, commercial banks must balance innovation with ethical considerations, ensuring AI systems are transparent, fair, and devoid of biases.
The Year of B2B Embedded Finance
Embedded finance has emerged as a force multiplier in commercial banking. This year more businesses are integrating financial services directly into their platforms, creating seamless B2B user experiences and unlocking new revenue streams.
For instance, more payment platforms are offering embedded solutions, allowing customers to complete transactions without leaving their system. For example, more supply chain platforms are using embedded financing options, enabling businesses to access credit at the point of need.
“Embedded services enable corporate customers to centralize and manage finances from within their enterprise resource planning (ERP) or customer relationship management (CRM) systems,” the report states, “rather than needing to connect to a banking portal.”
See the complete report for 10 ways embedded finance supports business workflows.
The Future of Analytics is Now
Data analytics is the backbone of decision-making in commercial banking. This year many banks have pledged to harness the power of big data to gain insights into customer behavior, market trends, and operational efficiencies. Advanced analytics tools enable banks to identify growth opportunities, optimize pricing strategies, and mitigate risk.
It gets really thrilling when delving into the realm of predictive analytics, with which banks can accurately forecast trends and make informed decisions. However, the sheer volume of information presents challenges in data management, requiring banks to invest in sophisticated data infrastructure and ensure data privacy and security.
“These analytic capabilities enable banks to not only maximize engagement and profitability by using data to identify additional sales or relationship-building opportunities,” per the report, “but also to reduce churn through machine learning and AI-enabled predictors by driving more proactive customer outreach based on user and customer portfolio-level behavior and activity.”
From the desirability of instant payments, to new capabilities enabled by ISO 20022, as well as embedded finance, advanced data analytics, and Gen AI, banks can now deploy a truly transformative digital toolset. Putting new tech to work sooner rather than later gives banks a competitive edge. That often explains the gap between leaders and laggards, as is illuminated by the 2025 Market Outlook Report: Commercial Digital Banking.