The Future of Finance Is Fintech, Not “Fintechs”

For years, financial services has been framed as a classic battle between fintechs and established institutions. But is that rivalry still real? More importantly, is it still serving either side? On World Fintech Day, I think it is worth reconsidering whether the term “fintech” still reflects the industry it describes.

While reading recent research from Boston Consulting Group (BCG) contrasting growth between fintechs and incumbents, I realized that the way we use the term isn’t really accurate anymore, and it creates a false division in a world where any institution can now deliver fintech and many fintechs are working to acquire the scale, licenses and capabilities traditionally associated with financial institutions.

So, instead of an “us vs. them” narrative, I think it’s time to view the strengths of fintechs and incumbents as complementary. Partnerships that allow each player to do what it does best offer the most effective route toward the ultimate goal: delivering secure, frictionless financial services to customers.

The 2026 BCG Global Fintech Report published in June, found that fintech revenues reached $504 billion in 2025, growing at 22% YoY. That’s more than four times the growth rate of incumbent institutions. Fintech-enabled payments still make up the lion’s share of that revenue, at $222 billion, with 18% YoY growth driven by digital wallets and vertical SaaS payments. Lending came in second, at $103 billion in revenue growing by 20%.

These are all extremely impressive numbers, but the figure that jumps out the most is this: despite all that rapid growth, fintechs account for just 4% of global financial services revenue. That is up 33%, from 3% the year before. But it’s still a tiny fraction of incumbent revenue.

But what does that tell us? The easy analysis is to frame it in the context of the rivalry. Either fintech’s dominance has only just begun and institutions face years of slow, painful market share erosion or despite all the incredible progress in the space, fintechs have barely made a dent, and institutions are simply too big and too well established to challenge.

But neither interpretation tells the full story. I see the 4% figure primarily as headroom: space to grow in a market where there is room for everyone to win. Technology-led payments and financial services are becoming the new norm, and that trend will only continue to solidify. But this is not a winner-take-all game, and there is no reason that both fintechs and traditional institutions can’t thrive in that environment, particularly when they work together.

First, let’s get one thing out of the way: fintech is just the combination of technology with financial services. It isn’t really a type of company, even though we so often use the term that way. It’s still a useful shorthand though for smaller, agile technology-led financial services businesses, so I’ll continue to use it to describe them that way for simplicity. But we need to be clear that any company that creates tech-forward financial services is doing fintech, including major banks, payment processors and established financial institutions.

That’s important, because today’s consumers and businesses are less concerned with whether a service comes from a bank, a neobank or a software platform, as long as the experiences they’re being delivered are intuitive, accessible and immediate. Fintechs are often better positioned to meet those expectations because they can move faster than large banks and payment processors. A fintech does not have to be a startup or a pure software company. The distinction that ultimately matters is not who delivers the product, but whether that product makes financial services more useful, accessible and convenient.

The fintech growth advantage is big, but it’s worth remembering that scale matters and it’s always easier for smaller numbers to grow faster. Even so, the success of fintechs over the past decade is undeniable. A major factor was that the turn toward software-first finance was a hairpin bend after decades of relative stability, and it’s so much harder for large institutions to change direction quickly. That created an early advantage for smaller, agile fintechs with deep expertise in software and user-centered design. They could enter the market, experiment and develop products far more quickly than many established institutions, or come in, “move fast and break things,” to quote Mark Zuckerberg.

Today however, the track has straightened significantly and institutions are catching up. Digital banking experiences have improved, every bank has a pretty good app, and many institutions have narrowed the most visible gaps in technology and user experience. Some have launched their own fintech-style businesses, like Marcus by Goldman Sachs. Many others have aggressively pursued fintech acquisitions and partnerships to add new capabilities more quickly. There’s still plenty that fintechs can do better than big institutions, but some of the traditional points of differentiation are beginning to erode.

On the institution side, big incumbents enjoy some key advantages of their own:

• They’ve spent decades building valuable networks and enduring customer relationships
• They hold large stores of historical proprietary data that could support better services and decision-making (and that fintechs will pay to access)
• They have strong brand awareness and trust
• They possess the licenses, capital and regulated infrastructure needed to operate at scale. 
• Maybe most importantly, they have deep regulatory and compliance expertise, as well as in risk and complex financial operations, areas where growing fintechs can struggle 

However, customer loyalty is becoming harder to assume. Data is only valuable when an organization has the technology and expertise required to use it effectively. In the United States, policymakers are also looking for ways to make it easier to integrate technological innovation into regulated finance while maintaining consumer protection and financial stability.

Two rivals, each with real advantages. But both are seeing those advantages erode, while increasingly adopting the characteristics of the other.

The next big question is how artificial intelligence plays into this shifting landscape. AI is impacting every industry, and financial services is no exception. We’re already seeing its potential reflected in both public and private market valuations, along with concerns that AI could reduce the value of the software and SaaS models that underpin much of fintech.

I don’t believe software will become less relevant, but AI will undoubtedly change how software is developed, how it interacts with underlying infrastructure and how customers use it. I also don’t think software companies will be the only winners simply because they’re tech-native and may have an early advantage in internal AI expertise. In an AI-enabled economy where costs and barriers to software development are lower, the networks, data, regulated capabilities and long-term customer relationships owned by incumbents could become even more valuable. AI is unlikely to reverse the trends already shaping competition in financial services, but it is going to speed them up, increasing the pressure on every organization to combine modern technology with trusted infrastructure, useful data and deep financial expertise.

To me, the way forward is clear: the industry should focus on partnership instead of rivalry. Most fintech services already depend in some way on the compliant, capital-intensive infrastructure institutions have spent decades building. Deepening those partnerships makes far more sense than trying to displace them. Likewise, just as software companies use the infrastructure and regulated capabilities of established institutions to deliver new products, incumbents can use the strengths of technology-led partners to modernize, differentiate and expand their traditional offerings into areas such as fintech-enabled payments, money movement and embedded lending.

In reality, these two supposed rivals are already highly interdependent. Now, it’s time for both sides to lean further into that symbiotic relationship to put customer needs first and deliver better products. This is one place financial-technology enablers such as NMI can play a critical role. We help banks, payment companies and software platforms access modular payments and money-movement capabilities without forcing them to rebuild complex underlying infrastructure or move beyond their core strengths.

Technology enablers also bring together technical expertise and longstanding institutional relationships, allowing them to understand the requirements on both sides and help different organizations work together effectively. Ultimately, the strongest technology providers will be those capable of helping incumbents and fintechs build on their existing advantages and, more importantly, combine them. Because, whether an experience comes from a bank, a payments company or a software platform matters far less than the right technology and financial capabilities have been brought together to serve the customer.