The global fintech industry is picking up momentum, with new data from Innovate Finance showing sector funding up 21% year‑on‑year and the UK strengthening its position as a global hub, but competitors are closing in.

Released its FinTech Investment Landscape 2025 report, the industry body found that global fintech investment reached $53 billion (£39.5bn) across 5,918 deals last year, a return to growth which reflects stabilisation after several years of decline.

Among 2025’s top deals were those for crypto platforms Binance ($2 billion, UAE) and Kraken ($800 million, US), while wealth manager FNZ ($650 million, UK) and digital payments PhonePe ($600 million, India) also raked in cash, signalling renewed investor interest across the fintech spectrum.

Investment momentum spiked in the second half of the year, up 61% compared to H1, to push total funding well above 2024’s levels and near 2023’s record, which Innovate Finance said shows signs of investor confidence in the sector’s recovery.

While many global fintech markets recovered, in the UK investment remained largely flat compared to 2024 and 37% below 2023 levels, though the second half of the year saw $1.9 billion (£1.4bn) raised, an 11% increase on H1, a faint positive signal for the UK ecosystem. 

That was still enough for the UK to keep its crown as the top destination for fintech investment in Europe and retain second place in the global ranking, though with India quickly closing the gap with $3.4 billion (£2.5bn) raised last year to the UK’s overall $3.6 billion (£2.6bn).

As well as FNZ’s megadeal, payments firms Rapyd ($300m), Dojo ($190m), and Fnality ($136m) dominated the UK’s capital raises, pointing to a resurgence of interest in payment platforms.

The United States, however, remained the dominant market, attracting $25.1 billion (£18.7bn), up 13% on 2024, with Brazil, Canada, and Mexico forming a strong mid-tier cluster, each raising between $1.3 and $1.6 billion, highlighting the growing adoption of fintech platforms throughout the Americas.

“Attracting a strong $3.6 billion in investment in 2025 – and again claiming second place globally behind only the United States – the UK has once again proven its credentials as a world-leading financial innovation and technology hub,” said Janine Hirt, CEO of Innovate Finance.

“Other countries are quickly gaining pace, however, and so to maintain our global lead it is imperative that we push ahead on delivering key regulatory reforms with speed, increase access to growth capital, and continue to foster an environment which is attractive for both domestic and international entrepreneurs and investors.”

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The trade body has previously warned that the UK’s approach to key areas of the fintech industry is not internationally competitive and is negatively impacting international investment.

In October, Innovate Finance issued a scathing rebuke of proposals from the Prudential Regulation Authority around the rules for challenger banks, a sector dominated by the UK in Europe. 

In a report detailing the constraints placed on the growth of challenger banks, Innovate Finance said the PRA’s “logic-defying” plans around capital requirements would “disproportionately burden” these fast-growing firms, and make secondary share sales like that reportedly being eyed by Starling Bank more sensitive.