5 Big Ideas that will change finance in 2025
As 2024 draws to a close, the financial markets stand at a crossroads – a moment to evaluate this year's strategies while positioning for the challenges ahead. Which emerging trends will reshape the investment landscape in 2025 and which will prove to be mere market noise?
Last year, generative AI and a volatile economic climate defined the global business environment. As we peer into 2025, the financial landscape is being reshaped by forces that put people at the centre of value creation. From the surprising link between employee satisfaction and stock performance to the changing face of retail banking, this year's trends suggest a fundamental shift in how we measure and create financial success.
Every December, LinkedIn News spotlights bold predictions, emerging trends and innovative ideas from our editors and experts around the world that are poised to shape the year ahead. This year’s 5 Big Ideas offer a glimpse into what may define the European and global finance industry in 2025.
What prediction or trend do you expect to have the biggest impact in the year ahead? Share your thoughts in the comments or by posting a video with the hashtag #BigIdeas2025.?
The investment landscape of 2025 will see a fundamental shift as employee wellbeing becomes a mainstream metric for stock valuation alongside traditional financial indicators. This transformation is already gaining momentum, backed by compelling evidence that happier workplaces deliver superior returns.
Recent studies paint a clear picture: companies prioritising employee satisfaction consistently outperform their peers. The HAPI ETF, launched by Irrational Capital in 2022, has already outperformed 90% of peer funds by selecting stocks based on employee satisfaction metrics. This success builds on earlier research showing that firms with high employee satisfaction outperformed their peers by 2.3% to 3.8% annually in long-run stock returns.
"People are not a cost to our businesses – they are an investment we should all be making if we want better performing companies", argues Dan Ariely , behavioural economist and co-founder of Irrational Capital. "Our research shows that treating employees well positively influences how businesses perform in the stock market."
This trend is further validated by comprehensive research, analysing data from 1,600 US companies and 15 million employee surveys. Their findings reveal that companies with higher workplace wellbeing scores demonstrate superior performance across multiple metrics including firm value, return on assets and profits. Most strikingly, the top 100 companies ranked by employee wellbeing outperformed both the S&P 500 and Dow Jones by 20% since 2021.
However, Alex Edmans , professor at 英国伦敦商学院 , emphasises that markets still undervalue employee satisfaction despite increased ESG focus. "Investors typically focus on quantitative, 'box-ticking' measures like CEO-to-worker pay ratios and demographic diversity. This only captures a small part of employee satisfaction, which can only be measured qualitatively through factors like credibility, fairness, respect, pride and camaraderie."?
Edmans notes that the relationship is particularly strong in flexible labour markets like the US, where there's greater dispersion in employee satisfaction levels and thus more competitive advantage from being best in class.
By 2025, expect investment firms to move beyond simple metrics toward more holistic measures of workplace culture and employee satisfaction in their valuation models. This shift represents a growing recognition that employee wellbeing isn't just a feel-good metric – it's a crucial indicator of long-term business success that requires deep, qualitative understanding rather than mere box-ticking.
Author: Manas Pratap Singh , finance editor at LinkedIn News
More than 50% of the decline in global growth in recent years has been due to tepid productivity gains. In the coming year, major economies will invest in their workforces to turn this around.?
Over the past few years, global economic policymaking has been preoccupied with many other things – dealing with the pandemic and its aftermath, navigating global conflicts and geopolitical tensions, fighting inflation and avoiding a global recession.?
The global economy has persevered and shown remarkable resilience through it all. But it has been left with a worrying legacy of low growth and high debt. Now is the time for global economies to capitalise on the resilience it has developed in recent years to focus on growth. We can do that by making work work better for more people.
Policymakers in 2025 will need to invest in reforms like reducing barriers to competition, cutting red tape and advancing digitalisation, to name just a few. The right reforms can help boost productivity, enhance skills and seize the benefits of the green and digital transitions. Governments will need help from the private sector, who can provide capital and innovation, to pull this off.
We will raise our growth ambitions and create good jobs where people need them most.
Author: Kristalina Georgieva , managing director of the IMF
Extreme weather events are getting bigger, more frequent and affecting areas they previously didn't, and – as insurers pull out – governments will find themselves stepping in.
In Florida, where this storm season cost an estimated $100bn (€94.6bn), premiums have soared and insurers have left the state, some going into liquidation. In the UK, the Bank of England estimates 4m UK homes could be uninsurable by 2030 and Australia's Climate Council puts its figure at one in 25 homes.
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Experts say we're reaching a tipping point and insurance models need to change rapidly. "The weather system is much more volatile and that volatility is increasing. We're seeing 'threshold events' – things that the models may not capture because they don't exist in the historical record," Sandy Trust, of Institute and Faculty of Actuaries, tells LinkedIn News.
The consequences for the wider economy are raising red flags. Governments are intervening as "insurers of last resort" but are looking at what's next. "With insurance prices going up, they're saying, 'What do we do about this?'" says Trust. In Europe, the EU is exploring an "emergency backstop" for the insurance industry, and the French government recently kicked off a consultation on the problem. "Insurance is the invisible lubricant of the economy – it shouldn't be left to fail," Trust says.
Thinking will be not just on an individual scale but whether whole groups of people can access insurance. "The fundamental purpose of insurance is risk sharing and the question is how narrow a group you share with," says actuary Lloyd Richards. "You can probably share things more equitably if you think globally rather than regionally."
Author: Siobhan Morrin , editor at LinkedIn News
In the year ahead, the US will firmly cement its role as the leading destination for foreign investment and capital expenditure.?
For decades, globalisation put a damper on the US as an investment destination. Persistently high production costs in the US created offshoring opportunities for China and India to gain pace.
However, an intensifying set of push and pull factors has redirected the spotlight back to the US. China’s cautious consumer and property market and Europe’s fragmentation and lack of growth have made these regions less attractive to investors. Meanwhile, conflicts in the Middle East and Ukraine have pushed investors to seek safety in the US.
The US’s unmatched capital market strength has enticed companies looking to be closer to their end consumers, and they are relocating their supply chains accordingly. This, combined with a business-friendly environment, has opened doors for semiconductor manufacturing, energy efficiency and electrification projects.
Carrots matter – the Inflation Reduction Act and CHIPS and Science Act helped drive Taiwan’s TSMC Arizona to up its cumulative capital investment in its Phoenix site past $65bn in 2024, the state’s largest-ever foreign direct investment. Cheap natural gas and rapidly evolving AI are other sectors where the US is out in front. While much remains to be seen in terms of US policy and regulation under the incoming administration, I expect the compelling US investment opportunities will continue to strengthen. And I never bet against the American entrepreneur.
The US comprises nearly 50% of the world’s capital, and its private sector is strong. While global lanes have changed as supply chains diversify, it’s clear that all roads are increasingly leading to the US.
Author: Jane Fraser , CEO of 花旗
Bank customers have deserted branch visits in favour of smartphone apps for years, but face-to-face banking hasn't had its last word yet. Welcome to the "banking lounges" era: with the growing threat of scams, this renewed in-person experience will feel more like going to an Apple store or Starbucks than simply visiting your bank.
These banking lounges will look and feel more like tech concept stores than physical branches. Think: less transaction windows and long queues and more open meeting spaces, education seminars and even freshly brewed coffee. "In the future, a visit to the bank may feel more like buying a new phone than opening a new account," financial crime consultant Luke Raven says.
According to Raven, banks are under pressure from regulators to do more to protect customers from scams and fraud. In the UK, where fraudsters stole close to ￡600m in the first half of 2024, banks are obligated to refund fraud victims up to ￡85,000. "In some countries there will be mandated reimbursement by default, while in others banks will be on the hook if they haven’t done a good job," he says.
This, in turn, will push banks to "break the spell" that scam victims are under by offering a human interaction – ideally face-to-face. While small transactions will still be done from the palm of your hand, banks will invite customers to do their banking in-store for big, life-changing moments – such as buying your first home or gifting a large amount of money to loved ones – where trained support staff can help prevent instances of scam, fraud and even simple human error.
Author: Misa Han , finance editor at LinkedIn News Australia
These emerging trends paint a picture of a financial sector that's becoming more human-centric, technologically adaptive and environmentally conscious. While challenges around climate risk and global growth persist, the innovations in workplace satisfaction metrics, banking relationships and investment patterns suggest that 2025 will be a year where finance better serves both people and profit. As always, those who can anticipate and adapt to these shifts will be best positioned to thrive in this evolving landscape.
What prediction or trend do you expect to have the biggest impact in the year ahead, and why? Share your thoughts in the comments or by posting a video with #BigIdeas2025.?
Great insights! At Mobilexpense, we’ve seen how intuitive tools and a culture of trust empower employees to manage expenses effectively, boosting compliance and financial health. Prioritising wellbeing, like embracing workplace diversity, drives satisfaction, creativity, and productivity. When employees feel valued, they’re more likely to champion innovation, proving finance is as much about people as it is about numbers. Here's an interesting article on this topic: https://www.mobilexpense.com/en/blog/diversification
Head Manager at MB "Kapitalo Investavimas"
2 个月Also, I still believe, that history lessons sometimes are forgotten for our view on coming changes and possible discrepancies in the economy. One example is COVID, then it started, I told my colleagues , that after the first two are three months, there were huge mistakes done politically, one of the examples are SARS virus, then it started in Africa, politically we stopped people movement from it's starting point, to stop it's spreading, while looking now to COVID, politically, people movement was stopped only then it reached out the hole continents. I don't want to talk about all kinds of scientific theories, because I am not a doctor, but I just want to point to possible points into history lessons, which can remind us how to react to such situations.
Product Controller @ HSBC || Chartered Accountant, CMSA?, FVMA?|| Capital Market & Securities || P&L Reporting, & Balance Sheet Substantiation || Continuous Improvement Mindset.
2 个月The widespread adoption of AI & ML technologies across financial services will continue in 2025, transforming how financial institutions analyze data, predict market trends, and make decisions. This will call for continuous training for professionals for regulatory compliance. Secondly, I expect significant investment in the blue economy in 2025 due to the global efforts to address sustainability, climate change, and the transition to greener economic models. I expect coastal nations to introduce incentives for investments in water preservation and recycling of marine waste to attract investors.
MI Analyst - Lloyd's of London | Ex- DLF | Hero Group | DLF Home Developers Limited
2 个月In 2025, hyper-personalized finance, powered by AI and data analytics advancements, will redefine the financial services industry. By leveraging vast customer data, financial institutions will deliver tailored, real-time solutions such as bespoke investment portfolios, dynamic risk-based pricing, and proactive financial guidance. This shift will enhance customer satisfaction and engagement and create a significant competitive advantage, strengthening loyalty and profitability. Hyper-personalization will transform how financial value is delivered, moving beyond generic offerings to precision-targeted services that empower customers and foster long-term trust. However, this transformation comes with challenges that must be addressed. Data privacy and security will remain critical, requiring institutions to adhere to rigorous ethical and regulatory standards. Ensuring fairness in AI-driven decision-making and eliminating algorithmic bias will also be pivotal to building customer trust. Hyper-personalized finance represents more than a technological evolution—it is a fundamental shift toward customer-centric innovation, setting a new benchmark for efficiency, trust, and financial success in the years ahead.