Global finance is in motion. Long-standing structures are being tested by slower growth, technological leaps, geopolitical divides, and new players.

Navigating a Low-Growth, High-Uncertainty World

The macroeconomic backdrop today offers both challenge and opportunity. UNCTAD forecasts global growth slowing from 2.9% in 2024 to 2.6% in 2025–2026, leaving the world in a low-growth, high-uncertainty equilibrium.

In mature markets, U.S. Treasury yields have climbed back to pre-2008 levels. J.P. Morgan projects the 2-year and 10-year yields at 3.50% and 4.35% by year-end, with room for a further 40–50 basis point rise in term premium.

Emerging markets face a contrasting cycle: growth decelerating toward 2.4% and central banks cutting rates even as developed economies hold rates higher for longer. This de-synchronized policy cycles dynamic will reshape capital flows, currencies, and debt landscapes.

Banks at a Crossroads

On the surface, banks have delivered strong returns. From June 2023 to June 2024, global banks achieved about 30% total shareholder return, driven by wider net interest margins.

Yet beneath that performance lies a structural challenge: banks are losing their fair share of revenues to neobanks, trading platforms, private credit providers, and alternative lenders. Capital markets and nonbank players are capturing higher-margin segments.

The debate at IIF and IMF/World Bank meetings centers on the future role of banks: as core infrastructure and safety anchors, or as direct competitors to agile, less-regulated entrants.

• Rising fintech and digital challengers
• Regulatory pressures and compliance costs
• Legacy technology and innovation gaps

Payments: The Engine Room of Finance

Payments remain the most valuable subsector in financial services, with global revenues of about $2.5 trillion and returns on equity averaging 18.9% in 2024.

Growth from 2019–2024 averaged 7% per year, spiking to 12% in 2023 before slowing to 4% in 2024 as interest tailwinds fade and lower-cost methods gain traction.

Around 46% of global payment volume is still cash, but digital wallets (30%) and account-to-account transfers are eroding traditional fee pools, especially in markets like India, Brazil, and Nigeria.

Fragmentation and Regionalization

The era of one global financial system is giving way to a mosaic of regions with different standards, timelines, currencies, and trust anchors. Tariffs, data governance, energy security, and national priorities drive this shift.

Regional payment rails like Brazil’s Pix and India’s NPCI are expanding beyond their borders, reducing dependence on global card networks and correspondent banking.

Two divergent scenarios could unfold: one where global passkeys—shared standards—maintain interoperability, and another where deeply regionalized systems prevail, creating distinct financial blocs.

Charting a Course Forward

In this shifting landscape, stakeholders must adapt strategies to thrive. Here are actionable steps that can guide businesses, investors, and policymakers:

• Adopt a diversified portfolio approach to balance exposure across regions and asset classes.
• Invest in digital and payment innovation to capture emerging revenue pools.
• Engage with regulators to shape supportive frameworks that foster competition and stability.
• Monitor geopolitical developments and embed agility in strategic plans.
• Build partnerships with fintechs, local rails, and nonbank providers to harness complementary strengths.

Global finance remains fluid. By understanding the forces of slowdown, technological change, structural competition, and fragmentation, organizations can transform uncertainty into opportunity and build resilient futures.