New technology adoption, evolving business models and emerging investment opportunities are on the horizon, according to Deloitte’s “2025 Financial Services Industry Predictions” report.

The global consultant predicts significant changes across financial services, as the industry adapts to evolving customer behavior and demands.

Doubling down on customer-centric opportunities and scaling advanced technologies could help financial services firms innovate and be poised for transformational growth, the report stated.

“The rapid advancement of technology and evolving market dynamics are creating unprecedented opportunities across the financial services industry,” said Jim Eckenrode, executive director of the Deloitte Center for Financial Services. “Companies that embrace these changes and innovate will likely be well-positioned to thrive in the coming decade. Our predictions highlight the importance of being proactive and forward-thinking in adapting to these transformative trends.”

One prediction is there will be an increase in retail investors’ allocations to private capital by 2030.

In the U.S., investments are expected to grow from $80 billion to $2.4 trillion.

The growth will be driven by expanded product offerings and regulatory changes that make private capital more accessible to retail investors.

The trend suggests that investment managers are increasingly recognizing the untapped potential of retail investors, the report noted, leading to a significant rise in private capital allocations over the next decade.

Deloitte forecasts that by 2030, one in four large-value international money transfers will be settled on tokenized currency platforms, potentially reducing the cost of corporate cross-border transactions by 12.5 percent, and saving businesses an estimated $50 billion.

Tokenized currencies, including stablecoins and digital cash instruments, could allow faster, more secure, cost-effective transactions, and can transform the way banks and businesses handle international payments, the report outlined.

The insurance sector is expected to see a growth in the adoption of fee-based risk management services.

By 2030, Deloitte predicts that U.S. property and casualty insurers could see their fee-based revenues grow from $21.6 billion in 2023 to $49.5 billion.

Insurers will focus more on offering services to help customers prevent losses before they occur, leveraging advancements in technology such as smarthome devices and generative AI.

The approach could not only enhance customer resilience but also create new revenue streams for insurers, Deloitte said.

The commercial real estate landscape is expected to see a significant investor shift toward alternative property types.

Deloitte forecasts that by 2034, nearly 70 percent of industry portfolio values will be comprised of alternative properties such as data centers, cell towers, life sciences, health care facilities and senior housing, marking a substantial increase from just over 40 percent today.

Deloitte estimates that assets under management for active exchange-traded funds (ETFs) in the U.S. will grow from $856 billion in 2024 to $11 trillion by 2035 — a 13x increase.

The increase is expected to be driven by investors shifting from mutual funds to active ETFs, offering transparency, flexibility and lower costs.

Deloitte predicts that the global market for tokenized real estate will expand, reaching $4 trillion by 2035, up from less than $300 billion in 2024.

The growth is expected to be driven by the adoption of blockchain technology, the report found, enabling fractional ownership of real estate assets.

Tokenization could open new avenues for real estate investment, overcoming challenges related to operational inefficiency and high administrative costs.

Finally, implementing AI-driven technologies across the insurance claims life cycle and integrating real-time analysis from multiple modalities, property and casualty insurers could reduce fraudulent claims and save between $80 billion and $160 billion by 2032.