From Recovery to Resurgence

This is the fourth edition of the Global Fintech Report, coauthored by BCG and FT Partners.

The global fintech industry has moved decisively beyond the 2023 “fintech winter.” Revenues surpassed half a trillion dollars in 2025, growing 22% year over year—more than four times the rate of incumbent financial services firms—and the largest public fintechs lifted EBITDA margins by 400 basis points. (See exhibit.) Equity funding rose 53% to $58 billion. IPOs were up 50%.

But this is not a return to 2021 exuberance. The sector has entered a more demanding era: Investors are more selective, public markets are less forgiving, regulation is pulling fintechs closer to banks, and new technologies are reshaping the economics of financial services. Fintech has moved from recovery to resurgence, but the next winners will look and operate differently than today’s leaders. This report draws on conversations with fintech executives, investors, and industry leaders, along with BCG research and our proprietary FinTech Control Tower, to assess where the sector stands and examine seven trends shaping its next chapter.

The State of Fintech: From Recovery to Resurgence

Two years ago, the conversation was about whether fintech business models would be sustainable. Today, public fintech revenue multiples have recovered—74% of the largest 85 public fintechs are profitable versus 68% in 2024. Fintech now accounts for roughly 4% of global banking and insurance revenues, up from 3% the year prior.

Growth has been uneven. Trading and investments grew 38% in 2025 and deposits grew 30%, while payments remained the largest revenue vertical. Capital flowed selectively too: trading and investment fintechs captured a third of equity funding, up from a fifth the year before, and Series E+ funding has grown over 200% since 2023, while seed and angel have contracted.

Still, public markets remain cautious. Many recent fintech IPOs have trailed broader financial services benchmarks, showing that public-market confidence has not fully matched private-market enthusiasm.

Forecast: Seven Trends That Will Shape the Next Chapter

The next phase of fintech will be shaped less by broad optimism than by how companies respond to a set of structural shifts including AI deployment, a digital marketing evolution, digital asset maturation, and regulatory convergence. The trends that follow examine where value is being created, where constraints are tightening, and how competitive advantage is being redefined across technology, distribution, and capital markets as the strongest players move from disruption to consolidation.

AI at scale: not yet, not equal.
The AI conversation has shifted from whether it matters to where it creates material value. Near-term gains are strongest in operations (for example, engineering, fraud, anti-money laundering/know your customer, servicing). Fully embedded products or consumer experiences have yet to scale. Engineering is the most proven use case: BCG experience shows smaller AI-native teams can deliver five times faster when firms redesign the full product-development cycle around AI, as opposed to simply bolting on copilots. Agentic AI is widely discussed, but in financial services, liability, identity, and explainability constraints will keep deployments bounded and human-in-the-loop for now. Regulation may be the bigger gating factor: stricter regimes slow deployment, while those that are more permissive enable faster experimentation.

The shift from search to answers reshapes acquisition.
As customers use GenAI tools to discover products, digital marketing is shifting from search engine optimization to generative engine optimization—making content, product data, and trust signals legible to AI models mediating discovery. As AI intermediaries influence consideration before consumers reach a fintech’s site, scaled media budgets and keyword bidding become weaker moats. Recommendation-worthiness matters more than discoverability.

Agentic commerce: Tech will be ready, consumers aren’t.
GenAI is already reshaping product discovery—shopping-related use grew 35% from February to November 2025—but commerce remains agent-assisted, not agent-led. Scaled agentic commerce will take longer to emerge and will likely start in low-ticket, repeatable categories such as household supplies and groceries, where error costs are low and value is clear. BCG estimates roughly $375 billion in first-wave US e-commerce spending, with $1 trillion eventually becoming agent-assisted out of a $1.9 trillion addressable base. While a single universal buying agent is unlikely to dominate quickly, value will accrue to infrastructure supporting identity, orchestration, and merchant integration, among other elements.

The search for at-scale digital asset use cases continues.
Digital asset players now account for 15% of all global fintech revenues and 23% of equity funding. The asset class has grown to roughly $3 trillion in crypto market capitalization, $300 billion in stablecoins, and $30 billion in tokenized real-world assets. But beyond crypto, scaled use cases remain elusive. About 65% of stablecoin holdings are tied to crypto trading, 25% to dollar access in emerging markets, and 10% to real-economy payments. Cross-border stablecoins have value in specific emerging-market corridors, but face resistance in major markets including India, China, and Brazil. The more credible path to broader adoption now appears to be asset tokenization, but tokenization will not scale evenly. Money market instruments, commodity funds, alternatives, and securitized debt look better positioned to scale where existing infrastructure is costly, fragmented, or illiquid. Scaling will require coordination across market utilities, regulators, issuers, and buy-side participants.

The regulatory gap between banks and fintechs is narrowing.
For years, fintechs delivered bank-like products without operating as fully regulated banks. That gap is closing. In the US, charter and depository institution applications rose five times from 2024 to 2025 and approval pathways are shortening. Clearer licensing routes in the UK and parts of Europe point in the same direction. In India, regulation is increasingly applying to both regulated and unregulated models, reducing the benefit of staying outside the perimeter. The trade-off is no longer free: fintechs moving closer to bank status gain lower funding costs and fuller customer ownership, but face tighter governance, capital, and supervisory expectations.

Neobanks winning globally, but the US is a different story.
Leading neobanks are evolving from single-product disruptors into broader financial platforms, expanding into lending, investing, insurance, cross-border transfers, and wealth management. Chime entered lending in 2025; Revolut received a full UK bank license and expanded wealth products across the EU; Nubank grew credit in Latin America and launched NuCel mobile services in Brazil. Geographic expansion is less straightforward, especially into the US, where the market is crowded with trusted incumbents and scaled fintechs, acquisition costs are high, regulation is fragmented, and the unbanked rate is low. International entrants can still win, but selectively and in niches—and not with the same playbook that worked in markets with wider structural gaps.

The IPO and M&A window is open, but the bar is higher.
Fintech IPOs rose 50% in 2025, and M&A volume climbed from $105 billion in 2023 to $184 billion in 2024 and $251 billion in 2025. More notably, the composition is shifting: scaled fintechs completed 659 deals in 2025 versus 589 by incumbents, reversing the prior year’s pattern. Fintechs are no longer just acquisition targets; the strongest are becoming consolidators. At the same time, AI may ease integration challenges that historically constrained bank-led M&A, supporting more incumbent acquisitions as banks seek modernization. Exit momentum is now driven by structural need, making this cycle more resilient than earlier sentiment-driven bursts.

Where We Go from Here: Calls to Action

As the sector enters its next chapter, each stakeholder has a distinct role to play.

• Fintechs should use AI to solve measurable frictions in engineering, support, underwriting, and compliance rather than chasing flashy narratives. They should pursue charters only when the economics justify the burden, and prepare for public markets early with durable profitability, clear revenue streams, and stronger control of economics.
• Banks should treat AI as a competitive imperative, focusing on a few high-impact use cases. Their trust advantage, balance sheet, distribution, and data remain powerful, but they need to embrace faster execution, modern technology, and fintech-like ways of working. Strong valuations also create room for M&A and partnerships to close capability gaps.
• Investors should underwrite operating quality, not category exposure. Nearly every company has an AI story; fewer can show AI improving product velocity, operating leverage, or underwriting outcomes. They should back firms aligned with structural shifts and prepare them early for a more selective exit environment.
• Regulators should clarify rules for AI, digital assets, licensing, and data sharing, while aligning obligations with activities. As fintechs become more bank-like, standards should rise accordingly. The goal should be safe innovation, interoperability, and fair competition—not protecting incumbents or subsidizing challengers.