As artificial intelligence reshapes the business landscape, fintechs stand poised to usher in a fresh wave of disruption as the industry emerges from a prolonged slump.

According to a new report from Boston Consulting Group (BCG) and seasoned fintech investor QED, 'Fintech’s Next Chapter: Scaled Winners and Emerging Disruptors', the sector has emerged from a tough funding environment stronger, more disciplined, and with greater growth prospects than ever.

In 2024, fintech revenues grew by 21 percent — up from 13 percent in 2023 — marking a threefold increase over incumbent banks. Meanwhile, the average Ebitda margin of public fintechs climbed to 16 percent, and 69 percent of public fintechs are now profitable. 

Importantly, much of this performance is being driven by a new class of scaled players generating $500 million or more in annual revenue. These now account for approximately 60 percent of total fintech revenues.

“A class of scaled fintechs is coming of age. Investors are demanding greater maturity, and regulators want more accountability,” says Deepak Goyal, a managing director and senior partner at BCG. “Meanwhile, emerging disruptors are harnessing next-generation technologies like agentic AI and pioneering new business models, pushing established players to continuously innovate.”

The report pinpoints agentic AI as the next wave of disruption, changing the game in commerce, vertical SaaS, and personal financial management.

At the same time, challenger banks are scaling fast: 24 institutions with over $500 million in annual revenues are growing deposits at 37 percent annually — 30 percentage points higher than traditional banks.

The funding environment is also maturing, with private credit emerging as a key tailwind for fintech 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,” says Nigel Morris, managing partner at QED Investors. “Fintechs are growing three times faster than incumbents as they leverage digital distribution channels and increasingly utilize 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. Fintech is ushering in a new era in financial services.”

The global fintech landscape is diverse, including nimble startups, established technology giants expanding into financial services, and traditional financial institutions adopting new technologies to remain competitive.

This sector is experiencing tailwinds, with fintechs leveraging sophisticated customer data and underwriting models. Private credit funds are also increasingly investing in fintech-originated loans.