If you work in banking, payments, FinTech or the digital economy, you’ve felt it all year: the back office is no longer backstage. Payments, identity, onboarding and fraud were once dismissed as “plumbing.” Now they’re the user experiance, the margin story and the brand promise, all at once.

ThatS why PYMNTS spent 2025 doing what we do more actively than anyone in the space: putting executives on the record. Between our daily coverage and PYMNTS TV’s Monday Conversation series (a weekly, one-on-one format hosted by PYMNTS CEO Karen Webster), we’ve built a consistent, executive-level feed of how the industry is really thinking when the questions are hard and the answers aren’t scripted.

Artificial intelligence (AI) dominated 2025 not because it’s shiny, but because it’s invasive in the best and worst sense of the word. It’s everywhere: how customers are welcomed, how fraud is blocked, how costs are priced, and – most contentiously – how liability is assigned.

One of the most consistent themes around AI was how it turns “service” into a systems design problem.For example, in travel and hospitality, Mews Founder Richard Valtr framed modernization as a values question disguised as a tech project.Hotels have optimized around rooms and property systems, not people. His most cutting line landed like a design brief: “But [guests] are not a room number. [Guests] are actual people with needs.”

Valtr’s provocation points to a broader payments lesson: Automation isn’t the end of service; it’s the reallocation of attention. If the system can recognize“`html

The Widening Gap Between Policy and Commerce in Financial Services

A significant disconnect is growing between how policy frameworks envision financial services and how commerce actually operates today. Modern commerce is real-time, cross-channel, identity-linked, and fundamentally reliant on data permissions and trust.This gap presents challenges and opportunities for innovation, regulation, and the future of the financial landscape.

The Core of the Disconnect

Historically, financial regulations were built around slower, more intentional transactions. Think of traditional banking, where processes took days to settle. Today, transactions happen instantly, across multiple platforms (online, mobile, in-app), and often involve complex data flows.This speed and complexity are driven by consumer expectations and technological advancements, but existing policies struggle to keep pace.

Real-Time Transactions and Settlement

The shift to real-time payments, fueled by technologies like faster payments systems and blockchain, creates friction with regulations designed for batch processing.Regulations frequently enough focus on minimizing systemic risk through delayed settlement, but real-time systems demand immediate finality. This requires a rethinking of risk management and collateralization strategies. Why is this a problem? Because delayed settlement introduces counterparty risk – the risk that one party won’t fulfill their obligation before the transaction is complete. Real-time systems minimize this risk, but require different regulatory approaches.

Cross-channel Commerce and Identity

Consumers interact with financial services across a multitude of channels – websites, mobile apps, social media, and even physical stores. Maintaining a consistent and secure identity across these channels is a major challenge. Current “No Your Customer” (KYC) regulations, while essential for preventing fraud and money laundering, can be cumbersome and create friction for legitimate customers. The need for streamlined,interoperable identity solutions is paramount. The “why” here is user experience. Repeatedly verifying identity across different platforms is frustrating and can hinder commerce.

Data Permissions and Trust

Modern financial services are data-driven. Personalized offers, fraud detection, and risk assessment all rely on access to consumer data. Though, consumers are increasingly concerned about data privacy and control. Regulations like GDPR and CCPA aim to address these concerns, but they also create complexities for businesses. The key is finding a balance between data utility and consumer privacy. Why is this balance crucial? Because restricting data access too much can stifle innovation and limit the benefits of financial services, while insufficient protection can erode consumer trust.

The Impact on Wholesale Fashion (and Beyond)

the fashion wholesale industry, as highlighted by YEAR CEO, is especially affected by these trends. The industry relies on rapid transactions, complex supply chains, and data-driven decision-making. Outdated financial infrastructure and regulations can hinder efficiency and growth. This isn’t unique to fashion; any industry operating in a fast-paced, data-intensive surroundings faces similar challenges.

Challenges in B2B Payments

B2B payments, common in wholesale, often lag behind B2C in terms of technological advancement. Traditional methods like checks and ACH transfers are slow and inefficient. The lack of real-time visibility into payment status creates uncertainty and can disrupt supply chains.Regulations need to adapt to support modern B2B payment solutions, such as virtual cards and blockchain-based platforms.

Bridging the Gap: Potential Solutions

Addressing this policy-commerce gap requires a multi-faceted approach.

Regulatory Sandboxes and Innovation Hubs

Creating regulatory sandboxes allows fintech companies to test innovative solutions in a controlled environment, without being instantly subject to all existing regulations. This fosters experimentation and helps regulators understand the potential benefits and risks of new technologies. Why are sandboxes effective? They provide a safe space for learning and adaptation.

Interoperable Standards and APIs

Developing open standards and APIs (Request Programming Interfaces) promotes interoperability between different financial systems. This allows for seamless data exchange and reduces friction. Interoperability is essential for creating a more efficient and inclusive financial ecosystem.

Risk-Based Regulation

Shifting from a rules-based approach to a risk-based approach allows regulators to focus on the areas that pose the greatest threat to financial stability. This requires sophisticated risk assessment tools and a deeper understanding of the evolving landscape. Why is risk-based regulation more effective? It allows for a more targeted and proportionate response to emerging risks.