The global fintech sector is entering a pivotal new chapter.
According to BCG and QED Investors’ latest Global Fintech Report, the industry is maturing rapidly – defined not just by innovation, but by profitability, scale, and the integration of emerging technologies such as AI and blockchain.
The days of “growth at all costs” are over; in their place, we see a renewed focus on durable business models, sharpened regulatory scrutiny, and disciplined capital allocation.
Green Shoots Emerging
After a turbulent period marked by market volatility and regulatory headwinds, green shoots are emerging.
In 2024, fintech revenues surged by 21%, outpacing traditional financial services threefold.
Challenger banks like Nubank and Revolut drove significant gains in deposits, while trading platforms and crypto firms rebounded.
Even insurtechs saw 40% revenue growth, especially among brokers and tech enablers.
Crucially, nearly 70% of public fintechs turned profitable in 2024 – up from less than half in 2023 – while average EBITDA margins climbed to 16%.
IPO Remains Frosty
However, the IPO window remains frosty.
Just 28 fintechs went public in 2024, none raising over $1 billion.
Still, market readiness is evident: 150 pre-2016 fintechs with $500 million+ in equity funding await their turn, including Stripe and Monzo.
For now, M&A activity is likely to dominate the landscape, with stronger fintechs using their capital advantage to consolidate and expand.
Yet fintech’s penetration across global banking and insurance remains surprisingly shallow – just 3% of total revenues, exposing vast “white space” for future growth.
Payments Dominate
Payments dominate fintech revenues, accounting for 55% of scaled revenue in 2024, followed by challenger banking and crypto trading.
Other verticals, particularly insurance, secured lending, and wealth management, remain largely untouched by disruptive innovation – offering prime terrain for new entrants.
The sector’s evolution is now being shaped by two transformational forces: AI and onchain finance.
While GenAI has already begun reducing costs through automation, the next frontier lies with agentic AI – autonomous agents capable of acting, learning, and optimising financial decisions on behalf of users.
From automated savings to proactive investment strategies, agentic AI could deliver a new era of hyper-personalised, hands-free money management.
However, real-world deployment hinges on solving challenges around regulation, interoperability, and data privacy.
On the blockchain front, stablecoins and asset tokenisation are gaining traction.
While stablecoins have proven popular in high-inflation markets and for cross-border payments, their killer use case remains elusive.
Asset tokenisation, by contrast, may be fintech’s next great disruptor.
With the potential to slash intermediary costs, accelerate settlement, and democratise access to illiquid assets, tokenisation could fundamentally rewire global capital markets.
In short, fintech’s future lies in smart scale, not speed; in solving meaningful pain points, not chasing hype.
Investors are now rewarding sustainable economics, not just growth.
Emerging fintechs would do well to focus on B2B automation, embedded financial infrastructure, and underserved segments – while embracing the potential of AI not as a gimmick, but as a core enabler of differentiation.
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