Member Article

Our Technology Sector Group comments on upcoming trends and developments to expect in 2025 for the sector.

1. Artificial intelligence (AI)

In 2025, AI will remain front and centre, as the hype of the last 18 months gives way to more widespread deployment of AI solutions across organisations – but with that will come increasing legal and compliance challenges. Firstly, the phased implementation of the EU AI Act will start to take effect, with key requirements on prohibited AI, and the need to ensure AI literacy across organisations, coming into force as early as February. We’ll also be keeping a close eye on developments in the UK’s approach to AI regulation, as hinted at in the incoming government’s King's Speech of last July. 

We expect to see the emergence of new norms in AI contracting, with AI vendors likely to have to improve their offerings, as customers increasingly expect more assurance from their external suppliers. With the UK government poised to launch a consultation, there is also the potential for a reform of established intellectual property laws to address the copyright and IP issues inherent in the training of generative AI systems in particular. Environmental, social, and governance (ESG) concerns, meanwhile, will also gain prominence. The environmental toll of the infrastructure underpinning AI will focus the minds of how customers and suppliers of AI choose to procure and deploy it – and report it to the outside world. 

In litigation, the proliferation of AI technologies is creating several watch points for the sector. The increase of AI-enabled fraud – including voice cloning and deepfakes – as well as the use and exploitation of data remain concerns, are both expected to gain prevalence this year. Expect to see numerous cases to address AI-related issues, such as copyright and patent infringement, in the latter. 

Finally, expect the demands of AI governance to become more detailed, with organisations looking to build comprehensive approaches to manage AI risk and ensure compliance with legislation, something our recently-launched AI Comply solution is perfectly placed to help with.

2. Blockchain, digital assets & crypto

The tokenisation of real-world assets – the process of converting traditional assets into digital tokens that can be sold, held and traded – is one to watch. This concept is revolutionising the financial landscape by offering increased liquidity, fractional ownership and transparency. It not only democratises investment opportunities, but also introduces cost efficiencies and enhances security through the use of blockchain technology. Expect to hear a lot more about it this year.

As for regulation, following the announcements made by both the Treasury and the Financial Conduct Authority at the end of last year, we should expect to see welcome clarity in 2025, with discussion papers, consultation papers and final policy statements throughout the coming years. In particular, the focus will turn on fiat-backed stablecoins.

Class actions against crypto exchanges are anticipated to grow, along with litigation between crypto exchanges and eMoney providers. In addition, as the “value” of Bitcoin increases investors, including individuals and corporates, will continue to speculate on the potential of ever-increasing returns. Alas, the levels of fraud will also continue to increase at a similar rate. 

3. Connected technology

We will continue to see use of Vehicle-to-everything (V2X) technology grow in the automotive sector. V2X refers to the sensors, cameras and wireless connectivity that allow vehicles to share real-time information with their drivers, other vehicles, pedestrians and roadway. Given the technology is closely tied to the development of autonomous vehicles, expect to see an increase in the number of patent cases coming out of the use of the technology this year. 

Outside of automotive, new Sisvel IoT patent pools will impact how other industries develop connected technology (including, for example, in digital healthcare, wearables, smart homes and smart energy). It remains to be seen how these standards will impact collaboration and licensing within these sectors and whether the same patent licensing model will work outside of automotive.

4. FinTech

The adoption of AI in FinTech will continue, particularly in areas such as fraud prevention, but requires careful governance and an understanding of evolving regulation.  

Operational resilience remains a critical issue and, as well as the full roll-out of the FCA’s Operational Resilience regime in April 2025, the industry will need to address the new EU DORA regime which will apply from 17 January 2025, and the UK’s proposed regime for the regulation of critical third party suppliers to the Financial Services industry. 

Increased use of AI, plus a continued drive towards personalisation, embedded finance and increasing regulatory requirements all mean that effective data management cleansing, orchestration, translation and interoperability will be key.  The UK government has also proposed legislation not only to enshrine open banking, but which will potentially usher in an era of "open data" where consumers can direct service providers to transfer their data to other providers. This will require relevant businesses to have the necessary infrastructure in place to facilitate that transfer.

Summary

Other areas of regulation the sector will need to navigate include the Online Safety Act, which has transitioned to implementation via Ofcom, mandating stringent measures for online platforms to ensure user safety. Meanwhile, the Cyber Security & Resilience Bill, which will be introduced to Parliament this year, aims to fortify the UK's cyber defences by expanding the scope of existing regulations, enhancing oversight and mandating detailed incident reporting. Finally, the Data (Use and Access) Bill seeks to unlock the power of data to boost the UK economy, streamline public services and enhance data protection. By introducing new standards for data sharing and protection, the Bill – which is likely to be in force by the middle of this year – will require technology companies to adapt their data management practices to comply.

In summary, the technology sector is poised for (another) significant transformation this year, driven by advancements in AI, sustainability, data and connectivity. But with that transformation comes risk and regulation. How companies navigate these various regulatory hurdles at play will ultimately dictate the speed of transformation in the industry as we move through 2025.

 

Link to article