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Trends in 2025 for Welfare

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Aarcha Zenya, Thilo Marquardt, Gustaf Soderlund & Vanshikha Bhat
Feb 21, 2025

How will digitalization accelerate transformation in welfare services throughout 2025?

According to an OECD report, utilizing artificial intelligence (AI). However, despite significant strides towards digitalization, welfare organizations are not fully realizing the potential of AI to improve user-centricity, foster innovation through collaboration, and speed up accessibility advancements. They have also yet to make the best use of increasingly sophisticated AI—or what’s known as agentic AI. A focus on these areas underpins the key trends for welfare services in 2025. 

While the use of AI may have contributed to what the describes as a 50% increase in the delivery of social benefits, the fact remains that there is huge untapped potential for digital tools to help create a more inclusive, sustainable and effective welfare system for future generations.  Our work with welfare agencies worldwide has enabled us both to identify the trends shaping welfare services this year and to help organizations seize the opportunities these trends present, notably in advancing the use of AI.

Welfare organizations have increasingly followed the private sector’s footsteps in placing citizens at the center of their operations. This shift involves adopting a focus on life events, such as birth, graduation, (un-)employment, marriage, and death. Public organizations recognize the need for proactive systems to support these life events—for example, an acceptance letter from a university should automatically trigger educational support schemes. However, making this a reality is easier said than done. Two key elements are essential for achieving this proactivity within user-centric welfare.
The first is a joint systems architecture. Developing interoperable systems allows different welfare programs and services to connect seamlessly, providing a holistic view of beneficiaries. The “single door” concept for public welfare services is not new—the Norwegian Labor and Welfare Administration (Nav) was established in 2006 with the goal of being a one-stop-shop for labor market, national insurance, and social service inquiries. However, from a technological standpoint, most welfare providers are only at the early stages of embracing a joint systems architecture.
Second, data sharing and usage are pivotal for addressing citizen needs. Collaborative data ecosystems facilitate partnerships between multiple institutions to actively share and utilize data. These ecosystems enable joint value creation to gain deeper insights into the specific needs and preferences of different citizens. This allows proactive interventions, personalized service delivery, and optimized resource allocation. Robust data governance and protection policies are essential to maintain trust.
Several countries are exploring joint systems architecture and data intelligence concepts to enhance user-centricity, positioning them as trendsetters in this area. The app in Singapore is a digital platform that offers access to over 100 government services, facilitating interactions with public agencies so that citizens can receive support tailored to their life events. Similarly, the UK’s initiative allows citizens to report a death to multiple government agencies simultaneously. This reduces the administrative burden on the bereaved, demonstrating the potential of integrated systems to enhance user experience during critical and emotional life events. Additionally, the is a good example that showcases how social security and welfare services can be improved with secure storage and sharing of personal information and credentials. These cases highlight that responsive and efficient welfare systems can be created with connected technologies and data intelligence.

Welfare agencies recognize that innovation is necessary to keep pace with citizens’ needs and expectations, while enhancing service delivery and improving efficiency. Many are now looking at several game-changing technologies, such as AI, blockchain and virtual reality (VR). AI is already lowering the workload of social workers: AI-driven transcription for example can free up caseworkers’ time to focus more on citizens’ needs. Similarly, blockchain technologies aid in increasing the efficiency and security of welfare payments, ensuring accurate and safe payment to the right recipients. Furthermore, immersive training environments can be created for social workers with virtual reality, a prerequisite for preparedness and effectiveness in real-life situations.
The drive for innovation can be achieved through collaboration. Initiatives such as the European Social Network facilitate sharing of learnings from innovation within the realm of social services, including welfare, employment and education. Collaboration setups are continuously evolving at the country level. For example, we are witnessing the rise of “GovTech”—a collaborative initiative aimed at fostering innovation and digital transformation within the public sector. Welfare organizations have joined GovTech Campus Deutschland to collaborate on a range of topics, related not only to the public sector but also to the broader ecosystem. Welfare agencies are also closely working on areas such as the future of multi-cloud within social security, the development of ecosystems of labs, technology radars, use cases and proofs of concept.
However, welfare providers can go far beyond exchanging best and worst practices. They have much to gain from addressing common challenges together. By pooling resources and expertise, they can effectively tackle areas such as AI intellectual property, data sharing, and interoperability. This collaborative approach not only accelerates innovation but also ensures that solutions are scalable and sustainable across different regions and contexts.

The estimates that approximately 1.3 billion people, or 16% of the global population, live with disabilities. Legislation such as the European Accessibility Act, Accessible Canada Act, Equality and Anti-Discrimination Act in Norway, and the UK’s Disability Discrimination Act, is designed to ensure that products and services are made accessible to people with disabilities, promoting inclusivity across nations and sectors. As a result, welfare organizations are increasingly prioritizing digital accessibility.
Digital accessibility means designing and developing digital content to meet the needs of all users, including those with visible and non-visible disabilities. Websites, mobile apps, and all digital interfaces can be made more inclusive and accessible. Unfortunately, digital accessibility has sometimes been overlooked in the move towards digital-first experiences; but digital tools can also be used to close the accessibility gap.
Welfare organizations can leverage customer experience technologies to offer alternative ways for citizens to interact, listen, write and speak. A ѻý report on digital accessibility underscores the growing emphasis on creating inclusive digital environments. For instance, the report mentions the implementation of voice recognition software and screen readers to aid individuals with visual impairments. Additionally, digital platforms are incorporating real-time captioning and sign language interpretation services to assist those with hearing impairments. These technologies not only enhance accessibility but also improve the overall user experience by making digital interactions more intuitive and user-friendly. Moreover, the report highlights the significance of user-centered design—involving users with disabilities in the design and testing phases. This approach ensures that the specific needs of all users are addressed, leading to better accessibility outcomes.

Governments worldwide have quickly made the development and adoption of AI a core goal. The UK government’s cites it as potentially the “single biggest lever to deliver its five missions, especially the goal of kickstarting broad-based economic growth.” Singapore’s drives for AI use that is not just project-based but systemic, with a conversational chatbot answering resident’s questions about public services. aims for 80% of the public sector to have adopted AI by the end of this year. How does the application of AI promise to transform the welfare sector?
There is an increasing focus on AI agents, with AI applications that are capable of planning and executing tasks with minimal or limited human intervention. Additionally, the applications evolve from rule-based actions to reasoning-based actions by leveraging real-time data. With AI agents proactively and autonomously completing distinct assignments, humans are freed up to focus on more meaningful and impactful work. Examples of AI-assisted work include detecting fraud, managing administrative HR tasks, and assisting citizens with routine enquiries. While the AI ensures fewer mistakes and more efficient problem solving, humans can focus on building better relationships with both citizens and new staff.
Many countries are now developing or piloting AI agents that could revolutionize interactions between citizens and government. AI-enabled virtual assistants can deliver a seamless and informative self-service experience wherever people need support in navigating public services and policies: from tax enquiries to social benefits, medical benefits and more. Key components include realistic and live interactive conversations, a robust knowledge base and multilingual support. The transformative potential of AI in enhancing public sector services is coming into view.

2025 – a year of maturity or uncertainty?

Will 2025 be the year of maturity for agentic AI in social welfare? Being a crucial touchpoint for public sector interactions, welfare organizations stand to benefit immensely from the potential of AI. However, the journey towards maturity involves strong executive support, robust technological infrastructure, a solid data foundation, a trained workforce, and a clear AI strategy.

Even with all of these building blocks in place, welfare organizations must also acknowledge—and address—the associated challenges of AI. These include ethical considerations such as the potential for algorithmic bias, which might lead to unfair treatment of certain groups. Data protection is also vitally important: Clear governance and transparency are needed for all tools handling sensitive personal information. And organizations must consider how greater usage of AI can be compatible with their commitments on sustainability: .  

Finally, while agentic and other forms of AI can contribute much to the transformation of welfare services, they should not be regarded as the only solution for digitalization within the welfare sector. Our work with Chief Digital Officers in welfare organizations often reveals a need to prioritize other pressing issues – for example outdated legacy systems, and gaps in the mobile friendliness of some public sector websites. All of these have their place in an ongoing story of digital transformation, and all can contribute in different ways to helping agencies deliver more for less.

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Authors

Aarcha Zenya

Client Manager
The public sector serves as the backbone of our community. With technology and citizen needs evolving rapidly, public organizations must continuously update and enhance mission-critical systems. At ѻý, we assist these vital transformations with our expertise and innovative solutions. As a Client Manager, I help Norwegian public sector organizations meet citizens’ dynamic demands, fostering a brighter future for all.

Thilo Marquardt

Vice President, Client Partner, Co-Lead Welfare
We envision a society where people can realize their potential, where equal opportunities prevail, and social security is easily accessible to everyone. By modernizing their applications and services, welfare organizations can improve citizens’ lives every day, and we are proud to contribute to that with our deep technology expertise and international experience of optimizing social security systems.

Gustaf Soderlund

VP, Global Pega Leader and member of Digital Leadership team, ѻý FS 
Gustaf has many years of experience selling, delivering, and leading business process and customer engagement solutions in a variety of industries, including banking and insurance Gustaf currently leads Pega globally and is the Augmented Services leader for Financial Services.

Vanshikha Bhat

Senior Manager, Global Public sector / Industry platform 
” We at ѻý public sector help governments organizations across the globe in driving initiatives that address the diverse needs of vulnerable populations. Our involvement also aids in navigating complex processes, optimizing resource, and fostering innovation. We thrive towards enhances the impact and sustainability of government programs, positively affecting the lives of those in need.”