The key hurdles to growth that financial institutions expect in 2025

The findings: Financial leaders are optimistic about growth this year, with 58% of financial institutions (FIs) expecting asset growth of 5% or more in 2025, per Wipfli Research’s State of the Banking Industry 2025. Just 36% said the same in 2024.

The key challenges: Despite the optimism, these leaders have identified several issues they’ll need to navigate this year in order to grow. They include:

• Cybersecurity risks: 79% of FIs reported unauthorized access in the past year, driving investments in security tools and fraud prevention measures. 
• Talent shortages: Recruitment and retention challenges persist, prompting strategies like flexible work policies and leadership training programs. Targeted efforts to compete for top talent in areas like AI can be a particularly costly endeavor.
• Digital transformation: While most FIs are implementing genAI solutions, the barriers are higher for many smaller FIs that have more limited resources to integrate legacy systems, manage fragmented data and regulatory complexities, and deliver seamless digital experiences to meet evolving customer expectations. 

What’s next: Larger FIs will have an edge in addressing these challenges due to their deeper budgets and resources. In response, smaller FIs may be driven to find new solutions through third-party partnerships, offer superior workplace benefits, or deploy low-cost marketing techniques. These strategies could help level the playing field and allow smaller institutions to remain competitive despite tighter financial constraints.

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