Where the fintech sector is headed next: QED-BCG Global Fintech Report 2025

Fintech may still make up only a small slice—just 3%—of global banking and insurance revenue, but its impact is growing fast. A recent QED–BCG Global Fintech Report reveals that fintech revenues rose 21% year-on-year, outperforming the broader financial services sector, which grew just 6%. Public fintechs also saw better profitability, with 69% now in the black—up from less than half the previous year.

In an exclusive interview with ET, QED Investors cofounder Nigel Morris said, “Regulators are now internalising that fintech is here to stay.” Fintechs have a role to play in the future of how financial services are delivered, he added.

Here are five key trends the report says will shape the next wave of growth.

Agentic AI

Many top fintech firms are just starting to move from testing generative AI to full-scale use. But the next big step is agentic AI, a type of AI that acts more independently and intelligently.

This tech could be as revolutionary as the internet or smartphones, the report claimed. For now, it’s helping earlier-stage fintechs speed up software development and cut costs. In the long run, it could transform everything from personal finance apps to business software.

The report puts it clearly: “Agentic AI will change the game . . . eventually.”

Onchain finance is gaining momentum—but there’s work to do

Blockchain isn’t just about crypto anymore. With better technology and more regulatory clarity, the stage is set for onchain finance to grow. Onchain finance refers to financial activities and transactions performed on blockchain.

Currently, stablecoins are helping smooth cross-border payments.

But, as per the report, the real opportunity lies in asset tokenisation—turning things like property, private funds, and bonds into digital assets. This could cut costs, speed up settlement times, and open up huge new markets.

However, a few key challenges still need to be addressed:

• Building secure, high-quality bank-grade infrastructure.
• Creating common industry standards everyone can follow.
• Offering clear, consistent rules and guidance from regulators.

Financial giants are already testing the waters, but mass adoption will take time.

Challenger banks should grow deep, not wide

Challenger banks, which are digital-first financial institutions, now bring in $27 billion in fintech revenue. To keep growing, they’re adding new products, increasing deposits, and targeting wealthier customers.

But expanding into new countries? That’s trickier. Different regulations, cultures, and fierce competition make international moves risky.

So, for now, focusing on serving existing markets better is the smarter bet, the report opines.

Fintech lending has fresh momentum

“Lending remains a significant opportunity for fintechs, given that they have only penetrated about 3% of the $2 trillion in global lending revenues,” the report said.

Right now, fintechs manage $500 billion in loans—a drop in the ocean compared to $18 trillion in US household debt alone.

But things are changing. Fintechs are getting better at underwriting and have more seasoned customer data. With $1.7 trillion in assets under management and increasing interest in fintech-backed loans, there’s an estimated $280 billion growth opportunity for private credit funds in this space.

Still, there's one unknown: how well these new lending models will hold up through a full economic downturn.

The next big growth wave: B2B(2X), infrastructure, and lending

The first fintech boom gave us big names in digital wallets, buy-now-pay-later, crypto trading, and challenger banks. While there’s still room to grow, it’s getting harder to break into these areas.

The report says that the next phase will focus on three fresh spaces:

• B2B(2X): Businesses still struggle with things like payments and accounting. Fintechs can solve these pain points—especially when their tools are built into existing software platforms.
• Financial infrastructure: Banks and institutions need to upgrade. AI and blockchain-based systems can modernise the global financial backbone—but it’ll take time and strong partnerships.
• Lending (again): There’s still a huge untapped market in business and secured lending. Fintechs are ready to move beyond personal loans and bring fresh ideas to this space.