Global fintech is entering a new golden era of maturity and momentum, according to a new report from Boston Consulting Group, defined by surging revenues and fast-scaling firms.

According to the third edition of the Global Fintech Report, co-authored by BCG and QED Investors, global fintech revenues shot up by 21% last year, a threefold acceleration over the financial services industry at large, with 69% of public fintechs achieving profitability.

Fintechs are seeing a rebound in equity investment, with both funding and valuations stabilising and fundamentals sharply improved.  

The report found that fintech funding levels have shot up 34% in Q1 2025 compared to the same period last year, while revenue multiples climbed 10%, signalling a recovery from the sharp decline in equity financing and valuations seen during the 2023 downturn.

Driving that recovery, BCG’s study found that fintechs are shifting away from a ‘growth at all costs’ approach to a more sustainable, profitable growth mindset.

BCG found that the average earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin of public fintechs increased by 25% in 2024, with 69% of public fintechs now profitable, up from less than half the year before.

Much of this performance is being driven by a new class of scaled players generating $500 million (£369m) or more in annual revenue. Despite fewer than 100 out of 37,000 global fintechs meeting this threshold, these firms now account for around 60% of total fintech revenues.

All together, these scaled fintechs have pulled in over $230 billion (£169.7bn) in revenue out of the $378 billion (£279bn) in total brought in by the global fintech sector.

Challenger banks, in particular, are scaling fast, as twenty-four institutions with over $500 million in annual revenues are growing their deposits at 37% every year, thirty points higher than traditional banks.

Bigger and better times may be on the horizon, too, with the report noting that 150 private fintechs founded before 2016 have over $500 million in cumulative equity, but for now have remained on the sidelines, though many are poised to go public.

Added to that, BCG found plenty of space for fintechs to grow, with only 3% of global banking and insurance revenue pools currently penetrated, and a $280 billion (£206.8bn) ‘white space’ opportunity for private credit funds in fintech lending.

Opportunity also abounds for fintechs looking to move into other market segments. So far, the report claims that fintech success has been concentrated on just five core segments, including digital wallets, SaaS, challenger banking, crypto trading, and BPNL, but according to BCG, the future of fintech lies elsewhere, in B2B(2X), financial infrastructure and lending. 

“Fintechs are winning 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.

“Fintechs are growing three times faster than incumbents as they leverage digital distribution channels and increasingly utilise AI. 

“Having emerged from the last two years with stronger fundamental unit economics and high net promoter scores, it’s easy to see why there’s an appetite for IPO-ready companies that deliver profitable growth”

Recommended reading

• VC Funding in Emerging Markets Fell 40% Last Year
• FinTech Firm ESG360° Lands £1M to Grow Glasgow Presence
• UK Tech Sector Secures a Third of European VC Funding in 2024

However, BCG’s report paints a vastly different picture to that offered by KPMG earlier this year, with the professional services giant saying global fintech had hit a seven-year low in 2024, marked by falling investment and fewer deals across the board.  

KPMG’s highly regarded Pulse of Fintech report claimed that M&A activity and VC funding both fell sharply last year as the market weathered consistent challenges, with UK fintech investment dropping by more than a quarter to hit $9.9 billion (£7.8bn).

Likewise, a study from Innovate Finance, the UK’s finance industry body, reported in January that global fintech investment fell 20% last year, although Britain managed to attract enough investment to rank second worldwide and first in Europe for fintech funding.