Key Trends and Market Dynamics for the Second Half of 2025

Published: August 19, 2025

Bank of America’s EMEA Corporate Banking and Global Payments Solutions teams recently held a roundtable at the bank’s London office where they shared the current thinking on key themes for the remainder of 2025.

Macroeconomic context and outlook

The initial expectations for 2025 did not materialise as anticipated due to macroeconomic pressures. Instead of a surge in M&A, dollar strength, and strategic activity, the market experienced delays and hesitations, especially due to ongoing tariff uncertainties. However, it was noted that sentiment has begun to improve in recent months. Whether participants – especially banks and corporates – take a pragmatic or more starry-eyed path is yet to be seen.

M&A activity is increasing modestly, with expectations of stronger volumes in late 2025 and into 2026. Clients are focusing on creating “fortress balance sheets”, emphasising liquidity and conservative funding strategies. Concern and positioning persist nonetheless around the watchwords of currency volatility, commodities, inflation, and interest rates.

Corporate funding and risk strategy

Amid the macro turmoil, the funding environment remains strong, with companies proactively tapping capital markets and banking facilities. Some firms are accessing convertible debt markets, which have seen a modest resurgence. Others are using revolving credit lines to facilitate greater strategic flexibility. Unsurprisingly, many firms are also now focusing more intently on cost optimisation, especially given rising interest costs as their ultra-low-rate debt matures.

Strategic themes for treasury clients over the next few months are therefore likely to include realigning fixed/floating debt ratios in anticipation of falling rates, hedging FX and commodity exposures, and increasing attention on working capital efficiency and tighter management of receivables and supply chains.

Payments technology and innovation

The payments and treasury landscapes are being shaped by several key drivers. Regulatory compliance costs are rising, and this means many banks are carefully balancing operational resilience with innovation.

Meanwhile, with real-time payments growing in popularity, at least in the B2C space, corporates mostly prefer receiving over sending, as it can be more strategic and beneficial to focus on making payments ‘on-time’ rather than in real-time. The push for standardisation (especially through ISO 20022) is seen by many clients as helpful for information richness and operational streamlining. However, the bank is adamant that modernisation of any kind must be driven by real client needs, rather than generating technology change with no strategy behind it.

Client focus

Corporate clients are sharply focused on cash concentration and visibility, to optimise yield in the new higher-rate environment and ensure working capital is managed effectively. During times of stress, treasurers should make sure the fundamentals are in place to ensure that their liquidity structures are as efficient as can be. Operational efficiency is also high on the agenda, especially as treasurers are often to be found leading transformation projects with smaller teams.

In this realm, AI can play a transformative role. It was noted that treasury teams are increasingly curious about how AI and ML can streamline processes and boost efficiency, such as through cash forecasting, reconciliation, and document drafting. A good example of incorporating AI in treasury management is within CashPro, Bank of America’s digital banking platform. The bank has integrated Erica, its AI virtual financial assistant, into CashPro Chat. It was noted that more than 40% of client enquiries are being answered by this intelligent virtual service adviser.

Key takeaways

• Economic sentiment is improving, and strategic planning is ramping up for 2026.
• Companies are emphasising liquidity, flexibility, and FX risk management.
• The shift to higher-for-longer rates is driving investment in treasury efficiency and automation.
• AI is being carefully integrated, particularly in analytics.
• The banking sector is healthy, with more M&A on the horizon.

The Bank of America panel included: Richard King, Head of EMEA Corporate Banking; Matthew Davies, Head of Global Payments Solutions, EMEA and Global co-head of Corporate Sales, GPS; Michael Coppock, Head of International Financial Institutions Corporate Banking; Simeon Stevens, Head of Corporate Banking UK & Ireland; Baris Kalay, Head of Corporate Sales, GPS EMEA; and Pablo Izquierdo, Head of Financial Institutions Sales, GPS EMEA.