The next age of fintech: AI, digital assets and new paths to success

After years of turbulence, the global fintech industry has entered a new era defined not by speculative exuberance but by a balanced focus on scalability, profitability, and operational and regulatory maturity. This is the fifth age of fintech: The first age, from the late 1990s to 2013, marked the emergence of pioneers. The second age, from 2014 to 2020, saw rapid growth but limited profitability. The third age, in 2021–22, was marked by a massive surge in venture capital investment, followed in the fourth age by a major reset and sharp contraction in 2023–24. In this fifth age, we see a set of scaled global fintechs achieving success, a new cohort of AI-enabled insurgents scaling, rising megatrends that put the wind at fintechs' backs, and renewed investor confidence.

In 2025, the global fintech market generated approximately $650 billion in revenues, representing a growth rate of about 21 percent year over year from 2024, and around 23 percent annually over the past four years. This materially outpaced the broader $15 trillion financial-services industry, which has expanded more modestly at a 6 percent annual rate. Despite this growth, fintechs have captured only about 4 percent of total financial-services revenues, underscoring both the progress and the substantial room for growth that remains.

Scale and speed vary markedly across geographies and verticals. North America, with fintech revenues of about $310 billion, remains the biggest market, while payments (about $250 billion in revenue) remains the largest vertical. The fastest growth is in Latin America (40 percent average annual growth over the past five years), driven by a rapid expansion in lending, which has grown at about 50 percent annually since 2021.

Total capital invested has increased by about 40 percent since 2023, particularly among later-stage, scaled fintechs with proven economics; although total deal volumes remain below peak levels.

In 2025, fintech IPOs also returned to prominence, with 31 new listings. In fact, of the top 100 IPOs globally in 2025, fintechs accounted for about 12 percent of total market capitalization. Bolstered by the likes of Adyen, Nubank, and Robinhood, the total market capitalization of listed fintechs has reached $850 billion, its highest level ever.

Earlier-stage investment has recovered more slowly, and growth equity has declined, creating a barbell-shaped investment profile. Capital is increasingly concentrated in a small number of firms — often driven by AI or digital assets — as well as the most compelling early-stage challengers, while midstage players face real challenges in finding the capital needed to grow. Meanwhile, scaled fintechs are leveraging their balance sheets to drive consolidation, accounting for more than 50 percent of acquisitions in the sector.

Among the key findings of the report:

• ‍$650billion: total fintech market size in 2025, representing 4 percent penetration of wider financial services value pools‍
• ~$2trillion: the projected size of the fintech industry by 2030, if recent growth rates are sustained‍
• +40% increase in annual capital deployed to fintech since 2023‍
• ~5 fintechs approaching“centicorn” valuations ($100 billion)‍
• >50% of fintech acquisitions are now by other, larger Fintechs rather than incumbents or sponsors‍
• $35trillion of stablecoin transaction value in 2025; but just 1 percent of this is related to“true payments”
• 21 applications received for US banking charters in 2025, more than previous four years combined‍
• 13 percent of fintech revenue generated by “horizontal” players

Four trends that will shape the future of fintech

Looking ahead, our analysis suggests four trends will shape this fifth age of fintech.

Artificial Intelligence

The first and most consequential force is artificial intelligence. It is the accelerant behind most trends in this report. AI is supercharging structural trends that have been eroding incumbent advantages for years — but the pace has changed. Fintechs are deploying AI to build products in weeks that once took years, to serve customer segments that were previously not economically viable, and to compress cost structures so that legacy operating models cannot compete on price. Early-adopter incumbents are seeing real returns. But for those that have not yet moved decisively, the competitive gap is widening. For many midsize incumbents, the strategic pressure is increasingly acute: invest for scale or risk progressive irrelevance. For scaled fintechs, AI is a double-edged sword — it powers their current advantage while simultaneously lowering the barriers that once protected them from the next wave of insurgents.

Digital assets

Second is the rise of digital assets such as stablecoins and tokenized deposits. With instant, near-free settlement, the promise of stablecoins for cross-border payments and remittances is clear. However, of the $35 trillion reported annual stablecoin transaction volume, only about 1 percent, or $390 billion, represents true end user payments, such as paying suppliers or sending remittances. The remainder is trading, arbitrage, and crypto-native activity. A range of industry estimates suggests that by 2030, the market value of stablecoins will be between $2 trillion and $4 trillion, implying a compounded annual growth rate of about 40 percent, with a broader range of on-chain tokenized assets potentially even higher.

Bank licenses

Third, fintechs are increasingly viewing banking licenses not as constraints but as strategic tools to unlock cheaper funding, enable expansion opportunities, enhance trust with customers, and reinforce their moats. In 2025, 21 fintechs applied for banking charters in the United States, more than in the previous four years combined. This could further reinforce the market bifurcation between the largest-scaled fintechs with licenses and the rest, and potentially reduce a key moat for incumbent financial institutions.

Rise of "horizontal" fintechs

Finally, a new form of fintech is gathering momentum and attracting a disproportionate share of investment. These are "horizontal" fintechs — software firms that help digitize incumbents from the inside out. They are ecosystem enablers that improve the efficiency of parts of the financial-services value chain. Today, these horizontal fintechs represent about 13 percent of industry revenues and have grown 25 percent faster than those directly competing with financial-services players over the past four years. They pose little direct competition to incumbents and, in fact, help them modernize and survive, particularly those without the scale, cash, or appetite to build similar solutions themselves. In some pockets — for example, UK insurtech — they have received 90 percent of all investment over the past five years.

New recipes for success

This report concludes with a look at where the next areas of material disruption will emerge. Our analysis suggests that fintechs that reach a new level of maturity across three dimensions could come out on top. The three dimensions are as follows:

1. Economics. The industry has moved from a phase in which growth alone was rewarded, through a period where profitability became paramount, into a new equilibrium that demands both. Winning firms demonstrate strong growth while achieving profitability or demonstrating a near-term graduation path to credible unit economics.
2. Regulatory posture and production-grade capabilities. Fintechs are increasingly shifting the perception of regulation from a barrier to a source of differentiation. Mature compliance capabilities are a touchstone of distinctive modern fintechs.
3. Product and distribution. In a world in which AI is reshaping the cost and speed of product development, the age-old debate between product and distribution now looks to be over. Trusted distribution is the critical ingredient that will differentiate winners from losers; fintechs that have earned that trust through years of reliable service, transparent pricing, and regulatory credibility will find it compounds over time. That is not to say user interfaces and products won't be important; rather, they will be less differentiating. A feature is no longer a fintech.

The sector is emerging from a turbulent period. The industry is nonetheless larger and more profitable than ever, and investment is returning. While penetration remains low and opportunity abounds, the most successful fintechs are demonstrating a new level of maturity across their economics, products, distribution channels, and operating models.