The global fintech sector has entered a new phase characterized by increased profitability and the growth of scaled fintech companies, with a strong emphasis on profitable growth.
These insights come from the third Global Fintech Report, co-authored by Boston Consulting Group and QED Investors. The report highlights a 21% year-on-year revenue growth in fintech, up from 13% the previous year. Additionally, EBITDA margins for public fintechs rose by 25%, with 69% of fintech companies achieving profitability—an improvement from less than half the previous year.
The findings are based on interviews with 60 fintech executives and reflect a stabilizing environment for funding and valuations, alongside a sharp improvement in fundamentals. Despite this progress, there remains substantial potential for growth, as fintech currently captures just 3% of global banking and insurance revenues, even as these companies expand at roughly three times the rate of traditional institutions.
The report also notes that revenue generation is highly concentrated, with 60% of all fintech revenue coming from fewer than 100 major players. In terms of market sectors, payments dominate the fintech landscape at $126 billion, followed by challenger banks at $27 billion, crypto trading at $16 billion, and buy-now-pay-later (BNPL) providers at $8 billion.