For banks and brokers seeking a successful 2025 in a fiercely competitive market, proactively addressing five critical areas discussed in this article - encompassing the latest securities and crypto trends - is paramount.
The securities and crypto industry will continue to undergo massive changes in 2025. Emerging technologies, shifting customer preferences, and increasingly stringent regulatory requirements present both challenges and significant opportunities. Which developments must banks and brokers pay special attention to? These are the five key topics that will shape the industry this year.
1. Hybridization of securities distribution
In 2025, the digitalization of securities distribution will become a strategic necessity. For several years now, it has been evident that resource constraints in physical sales and the increasing preference for digital channels among investors are limiting the growth of branch banks. Digital sales solutions are essential, from both an efficiency and customer perspective. However, digitalization does not mean that personal contact becomes irrelevant.
On the contrary, a hybrid advisory approach that combines digital solutions with personal support and advice has proven to be a promising strategy, merging the best of both worlds: the efficiency of digital sales with the human factor. Traditional banks, in particular, can leverage their advisory expertise and physical sales channels to create a seamless, cross-channel customer experience - digital first, but not digital only.
At the same time, digital advisory services and customer support present new opportunities for digital players to gain additional market share. Nearly 70% of the European investor population expresses a need for support in securities trading. German broker Scalable Capital has already taken the first steps in this direction with guided account opening, ordering processes, and analytics tools such as portfolio checks powered by Blackrock’s portfolio analytics and optimization engine Aladdin Wealth. WealthTech solutions like Aladdin Wealth and ImpaQt offer banks and brokers exciting opportunities to enhance their securities offerings and accelerate their go-to-market strategies, allowing them to capitalize on the next major trend in the industry.
2. Disruption of the securities value chain
Investment-as-a-Service (IaaS) providers like lemon.markets and Upvest are revolutionizing the securities value chain. These companies enable businesses to expand their securities offerings modularly with innovative elements such as fractional trading while significantly reducing processing costs. Over the past two years, partnerships between neobanks and IaaS providers have increased drastically. Lemon.markets, for example, collaborates with companies like beatvest and Holvi, supporting them in product expansion and the development of innovative solutions. Upvest partners with Raisin, Revolut, and N26. The latter recently introduced commission-free stock and ETF trading enabled by the Upvest platform.
Traditional banks and brokers must not ignore these opportunities, but rather rethink the status quo. First, they must take a close look at their internal structures, costs, and partnerships to unlock potential cost efficiencies, sometimes in the millions. Second, such partnerships offer new opportunities on the product side, allowing banks and brokers to expand their offerings and tailor them to customer needs, ensuring competitiveness in an increasingly dynamic market environment.
3. Pricing and product strategy in the securities business
For several years, pressure on transaction fees has been increasing, and zero-fee offerings like N26’s further intensify this trend. Nevertheless, many banks still rely on complex, transaction-heavy pricing models that make securities trading unattractive for many potential customers. The consequences include low securities penetration, sometimes well below 20% (of current account customers holding an in-house investment account), and inactivity rates exceeding 70%.
A positive example for a customer-friendly and competitive pricing model is Erste Bank in Vienna. Since October 2024, it has been offering an attractive all-in pricing model for the retail segment, thereby reducing fee complexity to just one component. This move could set a trend for the entire industry.
Another challenge for traditional banks is the aging customer base. In some cases, over 80% of securities customers are aged 50 or older. To remain competitive, banks must invest in younger customer segments and shift from a short-term approach to a long-term customer lifetime value (CLV) strategy. Additionally, banks must leverage cross-selling opportunities from their strong current account customer base, such as linking current accounts with securities savings plans or introducing cashback offers with direct flows into investment plans.
4. EU-wide payment for order flow ban
The ban on payment for order flow (PFOF) is already in place in many countries and will also take effect in Germany from June 30, 2026. Providers that have heavily relied on PFOF now face the challenge of adapting their business models to compensate for the loss of this revenue stream.
There are three key approaches to addressing this challenge:
- Internalizing parts of the value chain: A notable example is Scalable Capital, which has already responded by establishing its own trading venue in cooperation with the Hanover Stock Exchange.
- Unlocking new revenue sources: This includes the introduction of new fee components, such as subscription fees.
- Creating additional flexibility through cost efficiency: This can be achieved through new partnerships in securities processing, as described in section 2, “Disruption of the securities value chain”.
It is crucial for banks and brokers to develop proactive compensation strategies for lost or soon-to-be-lost income.
5. Travel Rule and MiCAR
Regulatory developments in the EU, such as the Markets in Crypto-Assets Regulation (MiCAR) and the Travel Rule (part of the Transfer of Funds Regulation, TFR) will significantly impact the dynamics of the cryptocurrency sector in 2025. The Travel Rule requires increased transparency and detailed information about both the sender and recipient of crypto transactions. Leading crypto brokers expect the workload for manual verifications to rise substantially. They face the challenge of compensating for the resulting additional costs, possibly by introducing exit fees or by reducing overall costs through the increased use of automated systems, such as AI-based transaction analysis.
MiCAR, which came into effect on December 30, 2024, provides a harmonized legal framework across the EU, which will intensify competition in 2025 and attract new market participants from within the EU. Crypto brokers are required to remain competitive by offering attractive products and pricing models in an increasingly price-driven and competitive market. On the other hand, this also presents new opportunities for brokers to expand into EU markets, offering a compelling value proposition and targeted marketing strategies to acquire new customers.
How Simon-Kucher can optimize your securities and crypto strategy
The securities and crypto industry is facing another major transformation in 2025. Banks that expand their digital distribution channels, adapt their pricing models, and view regulatory requirements as opportunities will be better positioned to capitalize on these changes. The central challenge for established banks and brokers will be to adjust their strategies with the necessary flexibility and speed to successfully counter aggressive market participants. The coming months will be crucial for securing a competitive advantage.
Thanks to contributor Tomasz Serwatka.
