The global fintech market is entering “a new era of maturity and momentum,” according to a recent report from Boston Consulting Group and QED Investors. The report says the sector has emerged from a tight funding environment “stronger, more disciplined and with greater growth prospects.”
In 2024, fintech revenues grew by 21%, up from 13% in 2023, according to BCG and QED findings. Meanwhile, the average EBITDA margin of public fintech firms climbed from 12% to 16% over the same period, and 69% of public fintech companies are now profitable, the report said, noting that much of the performance is driven by a new class firm generating $500 million or more in annual revenue, accounting for approximately 60% of total fintech revenues. Notably, of the $378 billion in global fintech revenues in 2024, $126 billion came from payments firms, according to the report. Fewer than 100 of the approximately 37,000 fintech companies globally account for roughly 60% of industry revenue — and payments firms are the “indisputable winner” to date, accounting for more than half of those gains. Payments fintech firms, some of which have seen growth from digital wallets or vertical software-as-a-service.
According to the report’s analysts, investors are demanding greater maturity, and regulators want more accountability. In addition, fintech firms are adopting next-generation technologies, pushing innovation and forcing other fintech firms and banks to keep up.
The report says that artificial intelligence is “reshaping” the industry, with many early-state fintech firms ahead of larger companies in leveraging AI — particularly for software development. Agentic AI — systems that can operate autonomously, make decisions and execute actions without constant human intervention — is “the next wave of disruption, and will change the game in commerce, vertical SaaS, and personal financial management,” analysts wrote.
And room for growth remains. According to the study’s findings, fintech firms penetrate only 3% of global banking and insurance revenue pools, which analysts said leaves “vertical and geographic gaps to be filled.”
Digital-first financial institutions, often called “challenger banks,” are growing quickly. Twenty-four institutions with more than $500 million in annual revenues are growing deposits at 37% annually — 30 percentage points higher than traditional banks, according to the report.
Fintech firms are making gains “in spaces where traditional banks have largely ceded the competitive ground, such as banking for lower-income households and buy now, pay later,” said Nigel Morris, managing partner at QED Investors.
The report also provided calls to action for fintech executives, regulators and banks. For fintech companies, leading firms must “double down on the fundamentals and focus on their home markets while embedding AI at the heart of their business models,” analysts said. Fintech firms should also remain alert to the merger-and-acquisition opportunities.
“Clarity, speed and harmonization are now essential,” the report said. “Without agile regulation around AI and digital assets, innovation is at risk of stagnating. Governments also have a unique opportunity to spur growth through digital public infrastructure.”
Banks should partner with fintech companies in areas such financial infrastructure “where it makes strategic sense,” the report noted. “At the same time, they must embrace AI with purpose and the desire for experimentation. Banks should also have a strategy for digital assets.”
