In what seems like an achievement for the fintech sector, the industry’s largest players have become more profitable. While in 2025, 74% of the fintech giants registered massive earnings, along with the 400 basis points rise in average EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) to 20%, the sector also attracted USD 58 billion in equity funding, up 53% year over year, while global fintech revenues surpassed half a trillion dollars, growing 22% and more than four times faster than incumbent financial institutions.
As per the findings of the “Global Fintech Report 2026: From Recovery to Resurgence,” the fourth edition of the annual report coauthored by Boston Consulting Group (BCG) and FT Partners, fintech now accounts for approximately 4% of the total global financial services revenue pool, large enough to be considered a distinct, mature sector but with vast white space remaining.
“The sector’s rebound is not driven by cheap capital or speculative optimism, but by operating performance. Exit markets have followed: fintech IPOs rose 50% year over year to 42 deals, while M&A volumes accelerated sharply, from USD 105 billion in 2023 to USD 184 billion in 2024 and USD 251 billion in 2025,” the study commented.
“Artificial intelligence (AI) is also reshaping how the sector competes: BCG data shows fintechs that are using AI effectively are achieving up to five times greater developer productivity, with the strongest near-term gains coming in engineering, underwriting, compliance, and customer support. These are areas where workflow redesign, rather than tool adoption alone, is driving the difference,” it added further.
“Fintech has not simply bounced back from the reset years; it has come out the other side as a fundamentally more mature industry. The firms leading today are profitable, disciplined, and expanding into new products and geographies with a seriousness that was not always present in the boom years. The question now is how far they will go in reshaping financial services,” said Inderpreet Batra, Managing Director and Senior Partner and Global Leader of BCG’s Payments & Fintech business, and coauthor of the report.
As per the report, there is a narrowing gap between how banks and fintechs are regulated. In the United States, the United Kingdom, and the European Union (EU), charter and licensing pathways are becoming more accessible, although they still require a great deal of compliance overhead.
In 2025, major fintechs applied for US federal bank charters in growing numbers, seeking the benefits of lower funding costs, greater product control, and direct ownership of the customer relationship.
“For the first time on record outside of 2023, scaled fintechs out-acquired banks and incumbent buyers, completing 659 deals in 2025 versus 589 by incumbents. Despite public market volatility, the strategic pressure to transact remains high, and M&A is becoming a primary tool for capability-building in AI, digital assets, and compliance, areas where the competitive gap is widening and building organically is too slow,” the report remarked.
On the neobank front, leading players are no longer focused narrowly on payments or low-friction onboarding. Instead, they are diversifying into lending, investing, insurance, cross-border transfers, and mass-affluent wealth management, evolving from single-product disruptors into broader financial platforms that, in the words of Batra, “present a sharpening competitive threat to incumbents.”
“Consumer credit is a key frontier. Unsecured lending is one of the largest global white spaces for neobanks, deepening customer relationships while leveraging alternative underwriting models. In Europe, leading neobanks have expanded wealth and trading offerings and moved into mortgage products, while in Latin America, the trend is toward broader credit and personal loan portfolios across multiple markets,” he said.
However, neobanks are facing a different challenge in the United States, with the market in the world’s largest economy already being crowded with trusted incumbents and scaled domestic fintechs.
Also, digital acquisition costs are high, while the regulatory environment remains fragmented, and last but not least, the population is highly banked.
As per BCG and FT Partners, international neobank entrants are likely to find selective and niche success in the United States rather than broad-based disruption. Domestic American fintechs are already preparing for intensified competition by moving upmarket.
“A real divide is emerging between FinTech companies that have made AI foundational—embedded across finance, accounting, customer service, fraud, and every other function—and those still using it for coding help and a handful of disconnected workflows. Large, established companies are pouring capital into AI, but capital alone hasn’t produced breakout capability. The difference comes down to management, engineering talent, and the drive to actually rewire the organization. That’s what will separate the winners from everyone else over the next few years,” said Steve McLaughlin, CEO and managing partner at FT Partners and coauthor of the report.