Fintech’s Evolution: Embracing AI and B2B Platforms
The financial technology (fintech) sector has transformed dramatically from 2020 to 2025. In just five years, fintech has shifted from a hype-driven boom into a mature industry focused on sustainable growth and innovation. This report examines how fintech companies globally – with a spotlight on Asia – have evolved, how they’re integrating artificial intelligence (AI) into services, and why many are pivoting from B2C (consumer-focused) offerings to B2B platforms and embedded finance. We’ll also highlight key players leading this transformation, funding trends favouring efficiency-focused startups, and forecasts for the next 3–5 years in AI, regulation, and B2B growth.
Five Years of Global Fintech Transformation (2020–2025)
Pandemic Boom and Reality Check: The early 2020s saw an explosion in fintech adoption and funding. COVID-19 lockdowns accelerated digital banking usage worldwide – 73% of all bank interactions globally now occur via digital channels. Consumers grew comfortable managing finances through apps, and by 2021, trust in fintechs equalled that of traditional banks in many markets. Venture capital poured into the sector, with 2021 fintech funding hitting a record ~$92 billion, nearly triple the prior year. This frenzy culminated in sky-high valuations and rapid customer growth for consumer fintech apps (from digital wallets to stock-trading and lending platforms).
However, 2022 brought a sharp correction. As macroeconomic conditions tightened, fintech funding fell over 40% year-on-year (from $92B in 2021 to ~$55B in 2022). Publicly traded fintech stocks lost billions in value, and many late-stage startups faced “down rounds” (valuation cuts). The era of growth-at-all-costs ended abruptly. Fintechs that once prioritised user acquisition shifted focus to sustainable business models and profitability. The average time between funding rounds lengthened, round sizes halved, and startups hunkered down to extend their cash runways. In short, the boom led to a much-needed reality check – survival now required real revenue and efficiency, not just user growth.
Asia’s Rapid Rise: Fintech’s global growth has been especially pronounced in Asia and emerging markets. Developing economies leapt ahead in digital finance adoption – for example, Africa surpassed 800 million mobile money accounts in 2022 (nearly half the world’s total), and Southeast Asia saw digital wallets and payments go mainstream. Within Asia, fintech has driven greater financial inclusion for unbanked populations. India’s UPI instant payments network and China’s super-apps (WeChat, Alipay) brought modern finance to hundreds of millions. Across Asia–Pacific, fintech revenues are expanding faster than in the West; emerging markets accounted for 15% of global fintech revenue in 2022, a share expected to double to 29% by 2028.
Regulatory changes also enabled growth. Several Asian countries issued new digital banking licenses (e.g. Hong Kong, Singapore in 2020), fostering competition. Open banking frameworks and real-time payment systems launched in markets like India and Malaysia, creating infrastructure for fintech innovation. Even traditional banks in Asia embraced partnerships with fintech startups to reach underserved customers. This global and Asian momentum means that despite recent headwinds, fintech still holds immense long-term potential – McKinsey projects fintech industry revenues will grow ~15% annually through 2028, 3× faster than those of traditional banks.
AI Integration: Smarter, Safer, More Personalised Finance
One of the defining features of fintech evolution since 2020 is the deep integration of artificial intelligence into financial services. Fintech companies are leveraging AI and machine learning to enhance efficiency, improve risk management, and deliver highly personalised user experiences. In fact, about 91% of major financial institutions are already exploring or using AI in some capacity, indicating how essential the technology has become in finance. Here are some key AI-driven innovations transforming fintech:
Hyper-Personalization of Services: AI allows fintechs to tailor products to individual customer needs at scale. By analysing a user’s transaction history, spending patterns, investments, and even digital footprint, algorithms can offer personalised financial advice and product recommendations. For example, robo-advisors like Wealthfront and Betterment use AI to build custom investment portfolios for each client based on their goals and risk tolerance. This was once a service only wealthy clients could access, but AI has democratized personalized advice, making sophisticated strategies available to average consumers. The result is happier customers and higher retention – when users feel a service truly “knows” them, they are more likely to stay loyal and buy additional products.
Advanced Fraud Detection & Risk Management: As digital transactions surged, so did fraud and cybercrime – financial fraud caused an estimated $485.6 billion in losses globally in 2023. Fintechs are fighting back with AI-driven fraud prevention. Machine learning models can analyse massive volumes of transaction data in real time and flag anomalous patterns far more effectively than static rules. Unlike traditional systems, AI fraud detectors “learn” to recognise subtle signs of suspicious behaviour (e.g. unusual spending spikes or logins from odd locations) and can block illegitimate transactions instantly. Companies like Feedzai have deployed AI tools that scan billions of data points to identify fraud as it happens. These systems also reduce false positives, improving the customer experience by avoiding unnecessary card freezes or security hurdles. In short, AI has become indispensable for managing risk – from fraud prevention to anti-money-laundering checks and credit underwriting models.
Chatbots and Virtual Assistants: Fintech and banking apps increasingly offer AI-powered chatbots to handle customer service and onboarding. Using natural language processing, these virtual assistants can answer questions, help users navigate apps, and even perform transactions via simple chats. For instance, Bank of America’s “Erica” chatbot has served millions of users with tasks like bill reminders and balance queries, reducing load on call centres. Similarly, many fintechs have integrated chatbots (often powered by GPT-like language models by 2024) to provide 24/7 support. Notably, Klarna’s AI chatbot has “drastically reduced support costs while improving response times”. These bots handle routine inquiries instantly, leaving human agents to tackle complex issues. Early evidence even suggests users sometimes prefer a well-designed AI assistant over waiting for a human agent. Beyond support, conversational AI is used for customer engagement – e.g. personalised budgeting tips or product recommendations delivered via a friendly chat interface.
Data-Driven Lending and Credit Scoring: AI and alternative data are reshaping how loans are underwritten. Rather than relying solely on traditional credit scores, fintech lenders use machine learning to assess creditworthiness using hundreds of variables – from a borrower’s payment history to digital footprint. This has expanded access to credit for thin-file customers (common in Asia’s emerging markets). Upstart in the US and Nubank in Brazil, for example, built AI-driven credit models that better predict risk for underserved borrowers. Nubank’s AI models have enabled higher loan approval rates with lower default risk, contributing to the digital bank’s rapid growth. In markets like Indonesia and India, fintechs use AI to analyse smartphone data or e-commerce transactions as proxies for trustworthiness, thereby offering micro-loans to people and small businesses who lack formal credit histories. This AI-enabled alternative data lending is boosting financial inclusion while managing risk more dynamically.
Automating Operations with RPA: To improve efficiency, many fintechs and banks turned to robotic process automation (RPA) and AI for back-office tasks. Everything from customer onboarding (e.g. automating KYC document checks with computer vision) to compliance monitoring is being streamlined. For example, large banks like DBS in Singapore employ AI to sift transaction alerts and reduce false compliance flags, allowing compliance staff to focus on true risks. Automated bots now handle routine processes like form processing, account reconciliations, and even basic bookkeeping for fintech services. This automation not only cuts costs but also reduces human error, contributing to fintechs’ operational efficiency – a critical advantage in the post-2021 era of tighter margins.
In sum, AI has become the technological backbone of modern fintech. It enables startups to scale personalised services (a key differentiator against one-size-fits-all incumbents) while keeping fraud and costs in check. As we’ll discuss in the outlook, AI’s role is only set to grow – with emerging tools like generative AI promising even more proactive and insightful financial services.
Pivot to B2B: Fintech Platforms and Embedded Finance
While early fintech revolutions often targeted consumers directly (think neobanks and peer-to-peer payment apps), recent years have seen a strategic shift toward B2B platforms and “fintech-for-fintech” solutions. Many fintech companies are now focused on providing infrastructure, software, and embedded finance capabilities to businesses, rather than competing for end consumers’ wallets. This pivot from B2C to B2B is evident across the industry:
Rise of B2B Fintech Solutions: By 2025, enterprise-focused fintechs dominate industry rankings. In Forbes’ Fintech 50 list for 2025, 31 of the 50 companies (over 60%) primarily serve business clients, offering everything from payment processing and invoicing software to banking-as-a-service platforms. This marks a clear shift from a few years ago when consumer-facing apps grabbed more attention. The trend reflects strong demand from companies (big and small) for specialised financial tools that can improve their efficiency or enhance their own customer offerings. It also correlates with funding realities – in the 2022–2024 downturn, B2B fintechs proved more resilient in attracting investment than B2C startups. Investors recognised that acquiring retail customers had become expensive and challenging, whereas selling software or API services to businesses yielded more stable revenue. In fact, funding for B2B fintech segments grew over 25% annually from 2018 to 2022, as enterprises eagerly adopted digital solutions to replace clunky legacy systems.
Embedded Finance & Banking-as-a-Service (BaaS): A major driver of the B2B boom is the concept of embedded finance – integrating financial services into non-financial products or platforms. Companies that traditionally weren’t “fintechs” (like e-commerce sites, ride-hailing apps, ERPs) want to offer payments, lending, or insurance within their own user experience. Fintech providers have arisen to fulfill this need via white-label APIs and BaaS platforms. For example, startups offer white-label digital banking modules so that any retail brand or tech platform can offer accounts, cards or loans to its customers without building a bank from scratch. This “finance-as-a-feature” model has exploded in recent years. Globally, the embedded finance market is surging – one analysis estimates total transaction value through embedded finance will grow from $92 billion in 2024 to $228 billion by 2028 (148% growth). Popular examples include ride-hailing apps providing insurance to drivers, airlines embedding travel delay insurance at ticket checkout, or SaaS software offering integrated payment processing for invoices. Platforms enabling these services (via API) – such as Stripe’s Treasury and Issuing APIs or banking-as-service providers like Marqeta and Railsr – have flourished by selling their infrastructure to consumer-facing brands.
Serving the Underserved SMEs: Small and medium-sized enterprises (SMEs) have historically been underserved by traditional banks, and fintechs are closing that gap via B2B services. SMEs make up ~90% of businesses worldwide, yet they often struggle to get loans, affordable payment solutions, or advanced cash management from big banks. Fintech startups seized this opportunity by offering tailored platforms for SME needs – from digital bookkeeping and payroll services to instant merchant cash advances. In 2022, 35% of U.S. SMEs reported considering fintech providers for services like lending or payments integration, and about 20% of Asian SMEs were already using fintech financing or payment solutions. Companies like Parafin (which made the Fintech 50 list in 2025) exemplify this trend by providing revenue-based financing to small businesses via partner marketplaces. Likewise, Indian fintech unicorn Razorpay built a full-stack payments and banking platform for SMEs, helping thousands of online merchants accept payments and access working capital. These B2B fintechs are unlocking credit and tools for small businesses that fuel employment and economic growth.
Open Banking and API Ecosystems: The move to B2B has been facilitated by open banking regulations and API standardisation in many regions. Open banking (mandated in the EU by PSD2 and pursued in markets like the UK, Australia, and increasingly the U.S.) requires banks to securely share customer data with authorised fintech apps. This has created a rich ecosystem of data aggregators and API startups (e.g. Plaid, Tink) that provide the “pipes” connecting fintechs to bank accounts. The result is that building a new fintech product is easier than ever – developers can plug into banking infrastructure via APIs instead of needing to partner one-by-one with banks. Even in the U.S., which has lagged, regulators are now advancing open data rules (the Consumer Financial Protection Bureau’s Rule 1033 will require banks to share consumer data on request). This regulatory push further opens the field for B2B fintech platforms, as more companies can integrate account info, payments, and other financial functions into their apps seamlessly. Fintechs focusing on “infrastructure” – secure data sharing, compliance-as-a-service, modular core banking systems – have thus become critical B2B players enabling the whole fintech sector.
Overall, the pivot to B2B represents fintech’s maturation. Rather than each startup trying to acquire millions of end-users, many realised the bigger opportunity (and more sustainable business) is to become the “intel inside” for finance – i.e. providing the technology and services under the hood for banks, businesses, and even other fintechs. This layered model means fintech’s impact is increasingly behind the scenes: your favourite retail brand’s new payment plan or your accounting software’s built-in loans likely come from a specialist fintech platform powering it in the background.
Case Studies: Fintech Innovators Embracing AI & B2B
To illustrate these trends, here are a few standout companies and how they adapted in the past five years with AI integration and B2B/platform strategies:
Stripe (USA) – A leading payments infrastructure company, Stripe has been a pioneer of B2B fintech. Its APIs enable businesses worldwide to accept online payments, manage subscriptions, and even embed banking services. Stripe’s sustained success (featured on the Fintech 50 list for 10 consecutive years) underscores demand for “fintech as a service.” The company also leverages AI (e.g. Stripe Radar for fraud detection) to protect merchants – using machine learning across billions of transactions to instantly flag suspicious charges. Stripe exemplifies how a fintech can scale globally by empowering other businesses with reliable, intelligent financial tools.
Ant Group (China) – Once known for the hugely popular Alipay mobile wallet, Ant Group’s trajectory changed after its blockbuster IPO was halted in late 2020 by regulators. In response, Ant pivoted from aggressive consumer lending to more of a technology partner role. Domestically, it aligned with government priorities and poured resources into AI – investing record amounts in AI research and development to bolster its tech capabilities. Ant modularised into units including a technology solutions arm that offers its AI-driven risk management and financial cloud services to banks and other institutions. Internationally, it has sought partnerships (e.g. with local e-wallets in Asia and projects along China’s Digital Silk Road) to expand Alipay’s reach in a compliant way. Today, Ant Group still handles payments for over a billion users, but it is also an infrastructure provider, licensing its AI-powered finance platforms to banks and aiming to be an “AWS of fintech” in the long run. This shift from pure B2C to AI-powered B2B services was crucial for Ant’s post-crackdown recovery.
Grab (Southeast Asia) – Singapore-based Grab illustrates the power of embedded finance within a platform. Originally a ride-hailing app, Grab transformed into a super-app offering food delivery, e-wallet payments, insurance, and more. In 2021–2022, Grab (with partner Singtel) also obtained a digital bank license, launching GrabBank to offer deposit accounts and credit to users and small merchants. Grab’s fintech arm integrates services seamlessly into its app – for example, drivers can access micro-loans or insurance in-app, and consumers use GrabPay for rides and online purchases. In Thailand, Grab and messaging app LINE are “leading the charge” in embedded finance, offering payments and micro-loans within their non-bank platforms. By embedding finance into everyday services, Grab deepened user engagement and opened new revenue streams. It also began offering some of its fintech capabilities to partners: for instance, allowing other e-commerce apps to use GrabPay as a checkout option. Grab’s model shows how in Asia, tech platforms evolved into fintech providers, blurring the line between consumer app and financial service ecosystem.
Nubank (Brazil) – One of the world’s largest digital banks (with over 70 million customers), Nubank rode the wave of consumer fintech adoption in Latin America. Over the past five years Nubank invested heavily in AI and data to scale its lending and keep credit losses low. It developed AI-driven credit scoring that helped extend credit cards and personal loans to millions of Brazilians without traditional credit history. This resulted in higher approval rates among underserved segments while maintaining low default rates. Nubank is also branching into platform services – offering its core banking technology to other fintechs via APIs and partnering with retailers for co-branded cards. Its acquisition of an AI tech firm in 2023 signalled even deeper integration of AI in products (like an AI chatbot for customer service and financial advice). Nubank’s success demonstrates how combining a strong B2C brand with behind-the-scenes AI optimisation can create a fintech powerhouse.
Plaid (USA) – An influential fintech in the open banking space, Plaid provides data connectivity between bank accounts and fintech apps (B2B2C model). In the last few years, as user growth in money-management apps slowed, Plaid adapted its business model by adjusting pricing and expanding services. It forged partnerships with large banks and embraced new data-sharing regulations to ensure it remained the hub for fintech integrations. Plaid’s ability to power everything from Venmo payments to Robinhood account funding made it integral to the fintech ecosystem. Faced with economic challenges, the company focused on sustainable growth – diversifying into identity verification and fraud prevention services for its business clients. Plaid’s story highlights how even mid-stage fintechs had to pivot toward broader B2B offerings and partnerships to thrive post-2021.
Parafin (USA) – A rising startup (founded 2020) that embodies the B2B fintech shift, Parafin partners with platforms (like online marketplaces and gig economy apps) to offer embedded financing to small sellers and contractors. For example, through Parafin, a marketplace can offer its sellers cash advances against future sales – providing much-needed capital without the seller leaving the platform. Parafin’s lending models use AI to underwrite based on a business’s real-time sales data. Its inclusion in 2025’s Fintech 50 list underscores the trend of niche, vertical-focused fintechs succeeding by solving specific pain points for SMEs. By operating exclusively B2B (B2B2C), Parafin avoids the costly challenge of customer acquisition and instead plugs its services into platforms that already have captive users. This approach has proven a win-win: platforms get to offer financial products to increase user loyalty, and Parafin gains scalable access to borrowers via those partners.
(These are just a few examples – other notable innovators include Chime (a U.S. neobank that built its own core banking infrastructure to fully leverage AI for fraud and personalization), Klarna (a Swedish fintech known for “buy now, pay later” that broadened into an AI-driven shopping app with virtual customer service agents), and Mambu (a German cloud banking platform whose SaaS core is used by banks and fintechs across 65+ countries). Each illustrates facets of the AI and B2B platform trend in fintech.)
Funding Trends: Investors Back Efficiency and Enablement
Fintech’s roller-coaster funding cycle in the last five years has ultimately led investors to favour startups that offer operational efficiency, data-driven insights, or enable other businesses – essentially, fintechs that make the financial system work better behind the scenes. During the 2020–2021 boom, investment was broad-based, including many B2C fintech apps riding digital adoption trends. But the 2022 correction and beyond saw a flight to quality and resilience:
B2B Fintechs Attracting Capital: As noted, B2B-focused fintech companies experienced smaller funding declines than consumer fintechs during the downturn. In 2022, funding for B2B fintech segments proved more resilient – areas like banking-as-a-service (BaaS), embedded finance, and SME software saw more moderate pullbacks (~25% decline) compared to payments or consumer lending fintechs (~50% drop). In fact, some B2B categories continued to grow in funding. This aligns with VC sentiment that fintechs enabling other businesses (through APIs, compliance tools, etc.) have clearer near-term revenue and profitability paths. By 2023, many venture firms explicitly shifted focus to “ picks-and-shovels” fintech startups rather than those directly competing for retail market share.
Survival of the Fittest (and Most Profitable): The funding crunch forced fintechs to refine business models. Companies that demonstrated real revenue, strong unit economics, and a path to profitability gained a distinct edge in raising money. Those with merely a growth story struggled. According to industry analysis, investors in 2023–2024 were increasingly zeroing in on startups with clear value creation and even positive cash flow, rather than subsidizing user growth. As a result, many fintechs adapted – cutting costs, monetising more carefully, and sometimes pivoting from consumer to enterprise clients to boost margins. Fintechs on the 2025 Fintech 50 list collectively showed “remarkable resilience” despite VC funding dropping from $144B in 2021 to $34B in 2024. They did so by focusing on sustainable growth, not blitzscaling. For example, some well-known players like Plaid revised pricing to capture more value from enterprise customers; others expanded product lines to diversify revenue.
Investor Preference for Innovation + Efficiency: Even in a tighter funding environment, innovation hasn’t halted – it’s become more targeted. There’s robust investor interest in fintechs that use emerging tech (like AI or blockchain) to solve specific inefficiencies. Many new funding deals in 2023–2024 went into fintechs tackling niche but critical problems: regulatory compliance automation, treasury management for businesses, credit scoring using alternative data, etc. New entrants that identified underserved niches with compelling tech saw success – for instance, Forbes noted 18 new companies on the 2025 Fintech 50 that are “making waves with innovative solutions,” such as Figure (which uses blockchain for lending and saw 50% revenue growth in 2024). Investors are still willing to bet on fintech startups, but only if they have a clear thesis: either significantly improve an incumbent process or unlock a new market.
Regional Funding Shifts: Globally, North America and Europe saw the steepest fintech investment declines post-2021, while Asia and emerging markets proved relatively resilient. In ASEAN (Southeast Asia), for example, fintech funding in the first three quarters of 2024 totalled $1.4B – virtually flat (-<1%) year-on-year despite the global downturn. This stability (versus >35% drops in NA/EU) highlights that investors still view Asia’s fintech sector as high-growth and underpenetrated. Southeast Asia’s fintech funding has grown 10× since 2015 overall, with payments and lending startups leading the way. Going forward, we can expect more capital to flow toward regions and segments where fintechs can both grow rapidly and generate sustainable profits (e.g. payment processors in emerging markets, B2B software for banks, etc.). Large fintechs with strong balance sheets have also engaged in M&A – acquiring smaller startups at lower valuations to fill product gaps (for instance, big fintechs buying AI-powered analytics startups to enhance their platforms).
In summary, the funding climate has matured alongside fintechs themselves. The free-for-all of the early 2020s gave way to a more discerning, value-driven investment approach. Fintech companies that help others become more efficient, or that deeply leverage data/AI for an edge, have risen to the top of investor wish lists. This trend reinforces the shift to B2B enablement and bodes well for infrastructure and AI-rich fintech ventures.
Outlook: The Next 3–5 Years in Fintech (AI, Regulation, and B2B Growth)
What does the future hold for fintech as we look to 2025 and beyond? The coming years will likely be defined by deeper AI integration, evolving regulatory frameworks, and the continued expansion of B2B fintech and embedded finance. Here’s a forecast of key developments:
AI Everywhere – and Smarter: If the last five years were about fintechs adopting AI, the next five will be about AI truly transforming fintech products. We can expect AI to become the core of financial services – from AI-driven personal finance coaches for consumers to AI-powered decision engines running in the background of corporate finance systems. Generative AI and advanced machine learning models will enable more conversational and proactive services. For example, your banking app might deploy an AI assistant that monitors your financial health continuously, warns you of upcoming cash flow issues, and automatically suggests optimal actions (moving funds, adjusting investments) in real-time. Hyper-personalisation will reach new heights: using AI, banks and fintechs will anticipate major life events and tailor offers accordingly (e.g. offering a new parent discounted baby-related financing, as one prediction envisioned). AI will also unlock “autonomous finance” – routine decisions (like choosing the best savings account or refinancing a loan when rates drop) could be handled by algorithms with minimal user input. On the B2B side, AI-enhanced fintech platforms will give businesses better insights and automation. Vertical SaaS platforms (for industries like healthcare, retail, etc.) that have embedded finance will weave AI into their solutions, delivering a “golden age of automation and intelligence” by unifying software, data, and AI-driven finance in one package. Importantly, as AI use grows, regulators will likely increase scrutiny – expecting transparency in AI-driven credit decisions to prevent bias, for instance. Fintechs will need to build “responsible AI,” balancing innovation with fairness and privacy, to comply with emerging AI regulations (like the EU’s proposed AI Act).
Regulation as a Catalyst (and Challenge): Regulatory developments will significantly shape fintech’s next phase. In many regions, open banking/data-sharing rules will fully take effect, forcing traditional banks to collaborate or compete in new ways. The U.S. CFPB’s open banking rule (expected by 2025) could be a game-changer, finally unlocking American consumers’ data to fintech apps by law. This would spur a wave of new services (budgeting, product switching, tailored lending) and benefit data aggregator platforms. Regulators are also reining in specific fintech segments – for example, buy-now-pay-later (BNPL) products face new regulations in the EU that bring them under consumer credit rules. This will likely lead to consolidation (only the compliant, well-capitalised BNPL providers will survive) and push providers to adjust business models (e.g. more transparent pricing). We can also anticipate continued oversight on crypto-assets and fintechs dealing in digital assets, which may indirectly affect fintech innovation (though mainstream fintech has largely shifted focus away from volatile crypto). In Asia, regulators are encouraging fintech in some areas (India’s unified payments interface is expanding, and Indonesia, Malaysia, etc. are rolling out open banking), while in China authorities now keep big fintechs on a tight leash regarding risk. Balancing innovation and consumer protection will be an ongoing theme. Notably, if fintechs continue moving into B2B services, many may operate more out of the spotlight of retail financial regulation, but will still need to adhere to enterprise security and data standards. Collaboration with regulators – through sandboxes and tech forums – will be crucial for fintechs launching novel AI-driven products, to ensure they meet requirements around fairness and transparency.
Every Company a Fintech (Embedded Finance 2.0): The trajectory toward embedded finance and B2B fintech is set to continue and even accelerate. In the next 3–5 years, we will likely see financial services embedded in nearly every consumer experience that makes sense. Just as payments are now integrated into apps like Uber, other financial offerings (insurance, installment credit, investment options) will become ubiquitous features in non-financial contexts. This means the market for B2B fintech infrastructure – APIs for identity verification, wallets, lending-as-service, etc. – will keep growing quickly. Analysts forecast the embedded finance sector to expand at ~30%+ CAGR in many regions, reaching hundreds of billions in revenue. We’ll see more non-traditional players launching fintech offerings: retail brands might offer branded banking accounts, tech giants will deepen their finance plays (Apple’s credit card and buy-now-pay-later, Amazon’s small business lending, etc.), and even SMEs may use fintech platforms to extend financial products to their own customers (for instance, a marketplace offering financing to buyers via an API from a fintech). All this will be enabled by fintech platform companies in the background – those who perfected the art of providing compliant, modular financial services. The competitive advantage will go to fintechs that can offer plug-and-play solutions with minimal friction, robust security, and easy integration. We may also see partnerships where traditional banks white-label their services through fintech middleware, effectively becoming BaaS providers to leverage their licenses while fintechs handle tech and user experience. In sum, B2B fintech’s slice of the pie will grow larger, making fintech less visible on the surface but deeply embedded under the hood of the economy.
New Frontiers: Real-Time and Global Reach: A few other trends worth noting in the near future: real-time payments and cross-border fintech networks will proliferate. Following the success of systems like India’s UPI and Brazil’s Pix (which in 2024 was processing 42 billion instant payments annually, over 30% of all transactions in Brazil), many countries are implementing or linking real-time payment systems. This will reduce reliance on cash and cards, and fintechs that provide real-time payment tech or build services on those rails (like instant payroll, just-in-time insurance at purchase) will benefit. The U.S. is slower here due to fragmentation, but FedNow launched in 2023 and might gain traction by partnership with fintechs offering user-friendly layers. Additionally, globalisation of fintech will continue – expect more cross-border fintech collaborations, standardisation of digital identity (making it easier to onboard users globally), and fintechs expanding to new markets either directly or via white-label deals. Asia’s big players (Ant, Grab, Paytm, etc.) will seek growth beyond home markets, and Western fintechs will similarly target Asia/Africa for expansion now that those regions contribute a growing share of fintech revenue.
In conclusion, fintech in 2025 is no longer just a disruptor on the sidelines of banking; it is an integral part of the financial system’s fabric. The industry has matured through challenges – shifting from wild growth to sustainable innovation. Fintech firms are harnessing AI to make financial services more intelligent and efficient, and they are increasingly building the platforms that allow other businesses (and even banks) to offer fintech capabilities. Investors and regulators have likewise matured in their approach, seeking a balance that encourages useful innovation while mitigating excesses. Over the next few years, we can expect a fintech landscape where artificial intelligence and embedded finance are omnipresent, customer experiences (for both individuals and businesses) are highly personalised and seamless, and the distinction between a “fintech” and a “traditional” financial institution continues to blur. In this new chapter, the winners will be those companies – whether startups or incumbents – that embrace AI, leverage B2B partnerships, and adapt swiftly to the evolving market and regulatory dynamics. Fintech’s evolution is far from over; in fact, its most impactful phase may be just beginning, as it truly empowers every facet of the global economy with smarter, simpler financial innovation.
Sources:
McKinsey & Co., “Fintechs: A New Paradigm of Growth” (2023) – industry analysis of fintech funding and growth prospects.
FinTechtris, “10 Years of FinTech Evolution: Insights from 2025 Forbes Fintech50” (Feb 2025) – trends from the Forbes Fintech 50 list, highlighting B2B dominance and adaptive strategies.
Dorik Blog, “5 Ways AI is Revolutionizing FinTech in 2024” (Jan 2025) – examples of AI in fintech for personalization, fraud detection, etc..
Crunchbase News, “Fintech Isn’t Just Back, It’s Being Rearchitected for AI” (Oct 2023) – insight on how new fintech startups are vertical-focused, AI-native, and infrastructure-driven.
Crunchbase News, “AI Accelerates Embedded Finance… Tech Predictions for 2025” (Dec 2024) – forecast on AI’s role in vertical SaaS and embedded finance, and hyper-personalization in financial services.
UOB/PwC, “FinTech in ASEAN 2024: A Decade of Innovation” (2024) – report on Southeast Asia fintech funding trends and growth over the last decade .
BusinessWire, “Thailand Embedded Finance… 2024” (May 2024) – notes on embedded finance growth and examples with Grab and LINE in Southeast Asia.
Additional sources: Reuters, Bloomberg, and industry news on Ant Group’s restructuring and AI investment, and various fintech company press releases and reports.
Report Generated by The ALFA Group