Global fintech revenues passed half a trillion dollars for the first time in 2025, but the rebound is not being felt consistently across the sector.
A new report from Boston Consulting Group (BCG), a management consulting firm, and FT Partners, a fintech investment bank, found that global fintech revenues rose 22% year on year to $504 billion. The sector grew more than four times faster than incumbent financial institutions and now accounts for around 4% of the global financial services revenue pool.
Funding also returned. Global fintech equity funding rose 53% to $58 billion in 2025, after a period in which valuations fell, investor caution increased and many fintechs were forced to focus more closely on costs, margins and growth quality.
Yet the recovery described in the report is not a broad return to the funding conditions of the earlier fintech boom. BCG and FT Partners said capital is increasingly moving towards scaled companies, infrastructure providers and AI-focused business models with clearer paths to profitability.
Capital returns to a different market
The report reveals that the largest public fintechs are now more profitable than at any point in the sector’s history. Among the largest 85 public fintechs, average EBITDA margins rose four percentage points to 20% in 2025, while 74% were profitable, up from 68% in 2024.
That improvement is changing where investors are placing capital. Later-stage fintechs attracted a larger share of funding between 2023 and 2025, with Series E and later funding growing by more than 210%. Seed and angel funding fell by around 10% over the same period.
Kunal Jhanji, BCG’s EMEA and South America head of fintech/payments and the report’s co-author, said: “Fintech’s recovery has been much stronger than many expected, but the sector is entering a new phase. Investors are increasingly backing firms that can combine growth with profitability, broader platforms, and stronger technology capabilities, particularly around AI and infrastructure.
“For the UK, the challenge is becoming less about creating fintechs and more about scaling them. The UK continues to produce world class firms, but building and retaining more long term value will require a stronger environment for scale up capital, investment, and wealth creation.”
UK revenues rise, investment stays flat
The UK outpaced the global market on revenue growth. According to the report, UK fintech revenues grew 30% year on year in 2025, ahead of the global average of 22% and US growth of 21%.
The UK remained the world’s second largest fintech ecosystem after the US and continued to produce some of Europe’s fastest-growing fintech companies.
However, investment into UK fintech remained broadly flat between 2024 and 2025, even as global fintech funding recovered sharply. The report points to continued pressure around scale-up capital for later-stage UK firms.
That contrast gives the UK figures a mixed tone. Revenues are growing faster than many other major markets, but funding conditions have not recovered at the same pace.
Payments still leads the sector
Payments remained the largest fintech vertical in 2025, while trading and investments and deposits recorded some of the fastest growth.
Trading and investment fintechs grew 38% year on year, while deposits grew 30%. Regionally, Asia-Pacific was the fastest-growing market at 25%, followed by Europe at 24%, North America at 21%, the Middle East and Africa at 20%, and Latin America at 15%.
The report said fintechs have also continued to expand access to financial services in emerging markets, supported by digital wallets, mobile money, low-cost payments and simpler onboarding.
Exit markets improve, with caveats
Exit activity also showed signs of recovery in 2025. Fintech initial public offerings rose 50%, increasing from 28 to 42 deals.
M&A activity picked up more sharply. Deal volume rose from $105 billion in 2023 to $184 billion in 2024 and $251 billion in 2025, based on FT Partners’ proprietary database.
Public markets, however, remain more selective. The 30 largest global fintech IPOs of the last five years have trailed the broader financial services sector by roughly 24 percentage points in annual total shareholder returns.
That gap points to continued scrutiny of listed fintechs, particularly around profitability, customer concentration, compliance maturity and the durability of growth.
Steve McLaughlin, CEO and managing partner at FT Partners, and co-author of the report. “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.”
AI moves into operations
AI features prominently in BCG and FT Partners’ outlook, but the clearest near-term gains are coming from operational use cases rather than fully autonomous consumer finance.
Fintechs using AI effectively are seeing up to five times greater developer productivity, according to the research. Early gains are concentrated in software development, underwriting, compliance, customer support, anti-money laundering, know-your-customer checks and document extraction.
Agentic AI remains harder to scale in financial services. The barriers are not only technical, with liability, fraud, identity access, explainability and trust all shaping how quickly autonomous tools can move into regulated financial workflows.
Regulation narrows the gap
The regulatory gap between banks and fintechs is also narrowing in markets including the US, UK and EU.
In the US, more fintechs are pursuing federal banking or trust charters, seeking lower funding costs, greater product control and more direct ownership of customer relationships.
Leading neobanks are also expanding beyond their original products into lending, investing, insurance, cross-border transfers and wealth management. That is moving some firms from single-product challengers into broader financial platforms.
For fintech, 2025 brought a major revenue milestone and a clear funding recovery. The next phase is likely to test which firms can pair growth with stronger governance, better economics and practical use of new technology.
