Fintech Market Insights

Re-Bundling the Bank 💡 Costs are growing for fintechs, but it's not just higher interest rates affecting their margins. Customer acquisition costs (CAC) are also on the rise and contributing to overhead. In response, some fintechs are seeking partners with existing customer bases. In June, for example, eBay and Venmo announced a partnership, allowing shoppers to pay for their purchases with their Venmo balance or methods linked to their Venmo account. Other fintechs, including big names like SoFi, have applied for bank charters. There is also a move to diversify revenue streams, illustrated by Robinhood’s reduced reliance on transaction fees for the bulk of its income. Both trends underscore a clear reality: As fintechs get squeezed, it is less viable for them to offer single, standalone products 💳 At the center of these moves is a focus on customer value. One effective way to reduce CAC is offering customers value on the financial side through products that help build savings or offer rewards. Another strategy is to add products to an existing customers base. Driven by their customers' growing expectations for digital solutions, Large Financial Institutions are increasingly partnering with, investing in and acquiring fintechs, leveraging the functionality and customer bases that fintechs have built in their specialized areas. Acquisitions such as JPMorganChase’s purchase of wePay for payments are one way for retail banks to add capabilities without building them in-house. At the same time, strategic partnerships can create efficiencies in customer acquisition. However, achieving a proper win-win in those relationships can be difficult to strike 🤝 Fintech partnerships are intended to be symbiotic, with tech companies like Chime providing a user-friendly front-end while a chartered partner bank such as The Bankcorp or Stride Bank, N.A. provides the FDIC-insured accounts and handles risk and compliance. This allowed fintechs to walk like a bank and talk like a bank while leaving the actual banking to someone else. In the last decade, deposits in fintech partner banks have skyrocketed, growing 9x faster than deposits in small US banks overall 🚀 Regulators are stepping up their oversight by issuing 50 severe enforcement actions in the last six months. A lopsided number of these actions are targeting partner banks. Startups are responding to the increased regulation by beefing up compliance talent and by reviewing existing processes, in some cases severing ties with partners. That opens the door to AI-native startups who can meet a high bar for regulation. Source: Silicon Valley Bank - https://t.ly/LfKVy     #Innovation #Fintech #Banking #OpenBanking #EmbeddedFinance #API #BaaS #FinancialServices #Payments #Lending #Blockchain #Compliance 

Stripe’s annual newsletter is out. The most interesting part isn’t Stripe itself, but the structural shifts it highlights. Here’s my summary. 𝟭. 𝗠𝗮𝗿𝗸𝗲𝘁𝘀 structurally concentrating Profits, capital, and talent are concentrating faster than ever before, with top firms capturing a disproportionate share of profits and market value - widening the gap between leaders and the rest.        𝟮. 𝗦𝗼𝗳𝘁𝘄𝗮𝗿𝗲, 𝗰𝗼𝗺𝗽𝘂𝘁𝗲, 𝗮𝗻𝗱 𝗱𝗮𝘁𝗮 infrastructure as the primary engines of economic growth Nearly half of US GDP growth is driven by software, computers, and data center investment signaling a long-term shift of economies toward digital and AI-native production. 𝟯. 𝗘𝗻𝘁𝗿𝗲𝗽𝗿𝗲𝗻𝗲𝘂𝗿𝘀𝗵𝗶𝗽 entering a faster pace Company formation, product launches, and code production are all accelerating sharply, with startups reaching meaningful revenue milestones much faster than in the past - suggesting it is becoming much easier to build and scale companies. 𝟰. 𝗚𝗹𝗼𝗯𝗮𝗹 𝗯𝘆 𝗱𝗲𝗳𝗮𝘂𝗹𝘁 as the standard operating model New digital businesses increasingly treat the entire internet as their domestic market, with meaningful revenue coming from countries far outside traditional Tier-1 economies which means global payments, tax, and compliance have to be in place from day one. 𝟱. 𝗦𝘁𝗮𝗯𝗹𝗲𝗰𝗼𝗶𝗻𝘀 becoming payment rails Stablecoin payment volume is decoupling from crypto speculation and growing rapidly, with most volume representing B2B activity - pointing to stablecoins as a practical cross-border settlement layer rather than a niche crypto asset. 𝟲. 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗶𝗻𝗳𝗿𝗮𝘀𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲  converging with programmable software infrastructure Wallets, issuing, cards, billing, and treasury are increasingly API-native, composable, and embedded - blurring the line between fintech and general software platforms. 𝟳. 𝗚𝗿𝗼𝘄𝘁𝗵 increasingly depends on capital access Traditional SME lending is down. Companies with access to data-driven, revenue-linked financing are growing faster making capital access increasingly decisive for growth. 𝟴. 𝗥𝗲𝘃𝗲𝗻𝘂𝗲 is increasingly infrastructure-driven Capabilities such as optimization, localized checkout, alternative payment methods, and AI-driven authorization and fraud controls are directly increasing revenue -turning payments infrastructure into a primary growth driver rather than a cost center. 𝟵. 𝗔𝗴𝗲𝗻𝘁𝗶𝗰 𝗰𝗼𝗺𝗺𝗲𝗿𝗰𝗲 as a new channel As purchasing shifts from human-driven browsing to software-driven execution, the competitive advantage will shift from UX and interface design to machine-readable identity, authentication, and payment infrastructure. 𝟭𝟬. 𝗥𝗲𝗴𝘂𝗹𝗮𝘁𝗶𝗼𝗻  as the biggest dependency on productivity gains As technological progress is accelerating, productivity gains will depend on whether regulation can support faster adoption of new technologies. 𝐒𝐮𝐛𝐬𝐜𝐫𝐢𝐛𝐞 𝐭𝐨 𝐦𝐲 𝐧𝐞𝐰𝐬𝐥𝐞𝐭𝐭𝐞𝐫: https://lnkd.in/dkqhnxdg

There’s a quiet but important shift happening in global fintech geography. The headlines this week tell the story: - UK fintech investment is rebounding with disciplined, infrastructure-focused rounds. - India is seeing renewed investor appetite, especially for regtech, payments infra, underwriting AI, and embedded finance. - UAE & Saudi Arabia continue pulling in capital with aggressive digital-economy strategies and regulatory clarity. - Meanwhile, Singapore and the U.S. are seeing softer early-stage funding and more cautious investor sentiment. This is a rebalancing of global hubs. What’s driving it? 1. Regulation is becoming a competitive advantage - Markets offering clear stablecoin rules, digital banking paths, and sandbox-to-license ladders are getting the deals. 2. Investors are tired of overvalued growth plays - Capital is flowing to regions where fintech economics are grounded in payments, compliance, underwriting, and treasury. 3. Local problems are creating global opportunities - India’s credit infrastructure, the Gulf’s cross-border flows, the UK’s open banking rails: these are real pain points that attract real builders. 4. Singapore and the U.S. are recalibrating - Both markets are moving from blitzscale to profitability, and that transition naturally cools early-stage dynamism. Good long-term signal, but painful short-term optics. My take? We’re entering a multi-polar fintech world, not one dominated by Silicon Valley or Singapore. Innovation is spreading to hubs where regulation is faster, talent is cheaper, and capital is more patient. Supportive trend. Healthy realignment. But the question is whether this diversification produces meaningful, globally scalable infrastructure — or just a lot of regional champions that never break out. Either way, the map is changing. Quietly, but decisively.

Welcome to the latest edition of the Fintech Wrap Up Newsletter—this week we’re diving into tokenomics, the UK’s stablecoin ambitions, Ethereum’s evolving architecture, Southeast Asia’s digital payment surge, global open banking trends, and real-world tokenization use cases. All the full reports are available for download at the end of each section. Tokenomics is no longer just a buzzword—it’s the make-or-break factor for crypto projects. Binance’s report reveals how projects are shifting from public sales to community-driven incentives like airdrops and lockdrops. Longer vesting periods and burn mechanisms are helping manage inflation and align incentives. But even the best token model can’t save a weak product—utility, trust, and sustainable demand remain critical. In the UK, Innovate Finance highlights a race against time. While lagging behind global peers, the UK still has a shot at stablecoin leadership—if it builds a forward-thinking regulatory regime. Stablecoins could power AI-driven finance, tokenized securities, and even support the government’s digital gilt ambitions. With London handling 40% of global FX turnover, capturing 10–20% of the future stablecoin market ($20–40B) isn’t far-fetched. Nethermind and Deutsche Bank explore Ethereum’s evolution into an institutional-grade platform. Innovations like Proposer-Builder Separation, Single Slot Finality, and Trusted Execution Environments are transforming how Ethereum handles security, compliance, and real-time settlement. Layer 2 networks offer scalability with governance frameworks familiar to financial institutions. Southeast Asia is rewriting the playbook on ecommerce and payments. By 2028, 94% of online payments will be digital, with mobile wallets, BNPL, and real-time payments leading the way. Indonesia will emerge as the region’s largest ecommerce market, while Singapore and Vietnam push payment innovation forward. Cross-border ecommerce is booming, but it brings complexity. Open banking is going global, with 95 jurisdictions now charting their own paths. Regulation-led models dominate in Europe and the Middle East, while market-driven frameworks thrive in Africa and Asia-Pacific. Broader regulatory coverage enables richer data-sharing, paving the way toward full-scale open finance and cross-sector open data. Tokenization is also moving from theory to reality. Ripple’s report showcases high-impact use cases across bonds, real estate, collateral, treasury, and trade finance—unlocking liquidity, reducing friction, and cutting costs. Meanwhile, JPMorgan and MIT’s joint research proposes a new design standard for payment tokens with compliance, UX, and governance in mind. Until next time—stay curious, and keep building. #fintech #payments #banking

Stripe almost walked away from crypto entirely. The UX was that broken. Here's how their Bridge acquisition set new standards for the entire industry: Seed phrases. Connect-and-sign flows. Wallets that feel like debugging tools. Then billion-dollar fintechs stepped in and forced the entire ecosystem to mature. Fintech doesn’t tolerate friction when the benchmark is tapping a card or autofilling an address. Crypto built permissionless global rails that never sleep. Fintech built trust, design, and distribution across hundreds of millions of users. They spoke in different dialects—crypto talked protocol, fintech talked product—but for the first time, they’re learning each other’s language. When Stripe acquired Bridge and Coinbase partnered with Shopify, they imported standards for what “good enough” actually means. Real-world "my mum could use this" good enough. That pressure is reshaping the industry. Layer 2 networks now settle in under 100 milliseconds. Platforms like Base and Arbitrum support permissioned deployments. Authentication happens in a single click, without blockchain knowledge. Users don’t want to see gas fees or pick chains. They don’t care about wallets versus addresses. That invisibility is the product finally working as intended. The likely winners are fintechs with both distribution and discipline—Stripe, Shopify, Coinbase, Robinhood, Revolut. They already have compliance frameworks, UX standards, and user bases. Now they finally have crypto infrastructure worthy of them. It is the great merge of rails and reach. Beneath the surface, a new contest is unfolding between Coinbase and Stripe for AI agent commerce. Both see what’s next: software transacting autonomously at machine speed. Coinbase built an AI Agent API. Stripe countered with Bridge and Privy. They are competing to become the nervous system of machine-to-machine money. When payments move at sub-100 millisecond speeds, the weakest link will be risk. Legacy AML and fraud systems still think in overnight batches. Most institutions are stitched together from eight to fifteen vendors: blockchain analytics, fraud detection, credit risk, sanctions. Each works in isolation. None makes unified decisions in real time. This is why I’m working with Oscilar. It unifies fraud defense, credit underwriting, and AML compliance into one AI-native platform. Sub-100 millisecond decisions at billions-of-transactions scale, across both fiat and crypto. Founded by Neha Narkhede, co-creator of Apache Kafka, who built the real-time data backbone for 80 percent of the Fortune 500. If you're securing digital asset flows: https://oscilar.com/

State of #fintech at the end of Q3’2024 by CB Insights Global Funding Trends: 🔵 Fintech #funding fell to $7.3B in Q3’24, a 25% quarter-over-quarter (QoQ) drop. However, the decline adjusts to 13% when excluding large deals from the prior quarter (e.g., Stripe, AlphaSense) 🔵 The average deal size in 2024 remains steady at $12.7M, reflecting a focus on fewer, higher-value #investments despite a 16% drop in total deal volume, reaching the lowest level since 2017. Geographic Insights: 🟠 Emerging Markets Lead Early-Stage Deals: 52% of early-stage deals occurred outside traditional hubs (e.g., US, UK), favoring regions like India, France, and Kenya Sector-Specific Trends: 🟢 Wealth Tech: Notable funding increase with a focus on solutions targeting niche demographics, such as medical professionals. #Wealthtech saw a 67% increase in funding QoQ, driven by significant deals such as Human Interest ($242M) and Earned Wealth ($200M) 🟢 Digital Lending: Continued activity in Asia and the US, with standout deals like DMI Finance ($334M) and MNT-Halan ($158M) 🟢 Payments and Insurtech: Both sectors experienced declines but retained pockets of high-value activity, particularly in #insurance #innovation Investor and Exit Activity: 🟣 #VentureCapital Shift: VC investments accounted for 29% of deals, highlighting a cautious but persistent interest in fintech 🟣 Exits: M&A dominated the exit landscape, with fewer IPOs or SPACs, indicating a shift toward #consolidation over public market enthusiasm. So what does all this mean for the near future? ♻️ We are entering a consolidation phase: With deal volumes at a historic low, the industry is undergoing a consolidation phase. Expect M&A to drive market realignments, especially in crowded subsectors like #payments and lending. ♻️ Increased focus on Emerging Markets: The shift toward less-crowded geographies reflects the untapped potential in markets like #Africa and parts of Asia. Companies targeting these regions may enjoy less competition and high growth prospects. ♻️ Selective Investment Persists: Investors are prioritizing fewer, higher-quality deals. #Startups will face increased pressure to demonstrate solid unit economics and scalability before securing funding. ♻️ Some Sectoral Bright Spots: The wealth tech boom signals a growing appetite for personalized financial management solutions. #Insurtech and #lending (especially in the small business) innovation remain attractive as they address core pain points with digital solutions. ♻️ Challenges for #Unicorns: The slowed rate of unicorn births underscores a recalibration of valuations. Companies aspiring to cross this threshold will likely need to showcase strong #profitability or growth metrics. Also, some of the existing unicorns 🦄 will lose their wings 🪽 if they test the market

Fintech Pulse Check: 5 Hard-Hitting Trends from Southeast Asia (& the Human Cost) Two weeks of whirlwind travel, back-to-back events, and countless conversations across Singapore and Indonesia have left me inspired, introspective, and eager to share the trends shaping the future of fintech and payments. But beyond the glossy presentations and networking events, here's what's really happening on the ground. Warning: Brutal honesty ahead. 5 Critical Trends I'm Seeing: 1. The AI Revolution is Reshaping Everything > AI is no longer just a buzzword; it’s driving efficiency, decision-making, and hyper-personalization across industries. > But also witnessing the human cost as traditional roles get automated 2. Digital Assets & CBDCs Are More Than Just Hype > Central Bank Digital Currencies are moving from discussion tables to pilot programs, with governments exploring how to balance innovation with regulation. > Payment providers pushing innovation boundaries > Yet regulatory challenges remain a major hurdle 3. Cybersecurity as a Priority, Not an Afterthought > With increasing digital transactions, ensuring secure ecosystems has become critical. > Collaboration across borders to combat fraud and data breaches is growing stronger 4. Connecting Communities Through Payments
> Beyond transactions, payments are becoming a tool for economic inclusion, bridging gaps between countries, businesses, and underserved populations. 5. Innovation in AI, Cloud, Blockchain, and Data
> These pillars are transforming how businesses operate, offering speed, scalability, and actionable insights that can reshape industries. Let’s also address The Silent Crisis, I observed - >Startups Running Out of Runway > Skilled Workers Losing Jobs > C-Level Leaders not finding the roles they left in their last organisation * The human toll is real and heartbreaking * Difficult conversations happening behind closed doors * Watching brilliant teams struggle with funding delays * This phase is testing our resilience as individuals and as a community. We have to come together and help each other to tide past this very difficult phase, with no real end in sight. In times like these, when the challenges seem insurmountable and the horizon offers no clear end to the storm, we must find strength in each other. Every burden feels lighter when shared, and every struggle is less lonely when faced together. This phase isn't just difficult; it's breaking spirits, testing limits, and leaving many wondering how to keep moving forward. But together, we can create hope where there seems to be none. What trends have you noticed in your industry or region that align with—or diverge from—these?Share your insights below.

As of 2024, 77% of financial institutions had adopted analytics and AI technologies, resulting in❗️ $447 billion in cost savings.❗️ Historically, banks and insurance companies have focused these tools on internal efficiencies like automating processes and reducing operational costs. However, with the rise of predictive analytics, real-time data, and generative AI, customer experience has emerged as the next competitive frontier. Despite this potential, only 35% of banking executives feel they are effectively using AI to enhance customer experience, even though 73% acknowledge a sharp rise in customer expectations. Meanwhile, agile FinTechs are capitalizing on this gap by delivering hyper-personalized services that are winning over younger, digitally native consumers. McKinsey reports that banks using ❗️ personalized AI can increase revenues by 10–15% and reduce churn by up to 30%, ❗️ while Accenture finds that 67% of consumers want relevant recommendations before asking. Yet only 36% of financial institutions provide proactive suggestions, even as 84% of customers say experience is as important as products. 💡 The future of finance lies not just in efficiency, but in transforming billions of routine interactions into intelligent, relationship-building moments driven by data and personalization. 🔗 https://lnkd.in/etUTDzaD #Megatrends #hyperpersonalization #Digitalbanking #Data #AI #fintech

What’s on the global payments #horizon in 2025? In 2024, I engaged with 150+ of our Deutsche Bank Corporate Bank financial institution clients, regulators, and policymakers through travel across 18+ countries; partnered with Partior, a leading payments innovator; sat on the BAFT (Bankers Association for Finance and Trade) Transaction Banking Global Leaders council; and worked with our expert Cash and Trade management team. In short, a front-row seat to the evolving demands shaping the payments horizon. Five 5️⃣ key trends FIs should anticipate in 2025: 1️⃣ Real-Time Everything Instant payments as the norm. FIs are investing in real-time infrastructure for both domestic and cross-border transactions. Blockchain solutions, direct connections to clearing networks, using your correspondent as on ramp to a clearing house, and expanded use of book transfer networks all enable instantaneous settlement with efficiency, transparency and traceability. #dbXpay 2️⃣ Turning Competitors to Partners Reducing transaction costs for our clients is a top priority in today’s margin-conscious environment. FIs are working together to play to each others strengths to leverage corridors and networks to build economies of scale and provide better pricing. 3️⃣ High Bar to Effectively Manage Financial Crime and Geopolitical Risks Rise in fraud, increased digital payments, and global destabilization have increased the complexity of managing FCR and sanctions risks. There’s a growing demand for technology to ease compliance demands and increase protection without compromising speed or customer experience. AI-driven tools, use of blockchain, and solid preventative #riskappetite drafting will help FIs stay ahead of risks. Partnering with an expert correspondent bank can support delivery of all. #dbXadvise 4️⃣ Capitalizing on FX Volatility Economic uncertainty has increased FX volatility, creating opportunities for clients to optimize currency positions. Heightened demand for integrated payments, liquidity management, and FX solutions that allow real-time currency exposure management. At Deutsche Bank, platforms like #FX4Cash and investments in #dbXconvert enable businesses to combine payment flows with FX execution, turning market movements into value-creation opportunities. 5️⃣ Global Interoperability Clients demand greater flex and flow outside business hours and regulators pushing for global payment harmonization. Blockchain’s inherent transparency sets a new standard, enabling real-time tracking and reconciliation at all hours. Additionally countries are aligning regulatory frameworks to foster cross-border interoperability. At Deutsche Bank, we are addressing these trends via our #dbX strategy, developing key partnerships, deploying our expert FCR team to support clients, expanding #FX capabilities, and combining technology with trusted expertise. Deutsche Bank is shaping the future of payments—one that is faster, smarter, and built to empower our clients. 🚀

Fintech exits just hit a 3-year high. After a few years of wait-and-see, fintech's exit market is accelerating, and we’re going to have A LOT to talk about at Money20/20 in Vegas in three weeks. Q3'25 saw 249 M&A deals and 15 IPOs, three and four-year highs, respectively. But, those deals are sooooo Q3’25. What does fintech's exit recovery and the latest data signal about the technologies that will dominate the coming wave of exits, consolidation, and strategic priorities for investors and acquirers? ↳ Stablecoin infrastructure & payments rails: Banks, payment processors, and crypto natives are paying premiums for compliant on/off-ramps and settlement infrastructure as institutional adoption scales. ↳ AI-native fintech platforms: Five of Q3's top 10 funding deals went to AI-powered finance platforms. Acquirers know AI leaders will widen competitive gaps; expect strategic acquisitions before these companies even consider going public. ↳ Embedded finance & banking-as-a-service: As distribution becomes the moat, expect consolidation among BaaS providers and aggressive M&A from non-financial companies building financial products into their ecosystems. ↳ Wealth tech & digital asset custody: With 3 of the 5 fastest-growing fintech hiring markets in wealth tech, institutions are building or buying the infrastructure to serve retail and institutional demand for private markets and digital assets. Prep for Money20/20 by reading our co-produced State of Fintech Q3'25: https://lnkd.in/gEN5XyKt h/t for the awesome work on the report by Micky Tesfaye, Laura Kennedy, and Aisha Chandraker.