Fintech Nexus talked to three fintech experts about trends, among them, exits, stablecoins and AI.

Financial services is having a moment in 2025, from companies announcing they are going public to talks of more mergers and acquisitions and venture capital funding being pumped into the sector.

Fintech Nexus spoke about these fintech trends with investors Logan Allin founder and managing partner of Fin Capital and Tahira Dosani, co-founder and general partner of ResilienceVC and Deepak Goyal, managing director, senior partner and head of Boston Consulting Group’s fintech segment. 

They discussed what their predictions were for 2025, if they became reality, and what’s next for the second half of the year.

Fintech Spring

For the past three years, Boston Consulting Group, in partnership with QED Partners, has published a global fintech report that takes a look at the industry’s wins and losses. Goyal’s first report, published in May 2023, covered December 2022 through April 2023, and “was literally the worst time you could think of in terms of sentiment,” Goyal said.

“The bubble had burst in the middle of 2022, and interest rates were going up,” he told Fintech Nexus. “And frankly, valuations had debt and funding had debt, so there was massively negative sentiment at that time.”

The key message from that report was despite the doom and gloom, there were fundamental reasons why fintechs exist and play the role that they play. 

“We came to the conclusion that fintechs have a real role in the economy to play,” Goyal said. “There are parts of this market that either banks don’t serve well or are late or unable to serve, and that role can be filled by the fintechs, especially as you go outside the U.S.”

In 2024, the BCG/QED report once again highlighted very high interest rates, lowered valuations and noted that the concept of “growth at all costs” had disappeared. Add to that regulatory difficulty in the form of fintechs not able to secure sponsor banks and running into data privacy issues. It’s a time Goyal called “a big reckoning.”

A year later, the fintech industry has matured enough that Goyal calls 2025 a “Fintech Spring,” in part due to a number of fintechs that are at scale globally — meaning they’ve proven their unit economics and product market fit. There are now around 100 companies that have over $500 million in revenue, which is the number BCG uses as a benchmark.

In addition, while the banking industry grew 6%, the fintech industry grew 21% during the same time, he said. Meanwhile, funding started to come back and the revenue multiples on valuations have bottomed out.

“There are also parts of the fintech market that fintechs have truly conquered, in our opinion, including vertical software, buy now pay later, wallets and digital banks,” Goyal said.

Need for liquidity

Now that there is evidence the initial public offering markets have opened up, it’s impacting capital markets in a positive way right now, Allin told Fintech Nexus.

However, Dosani said there was an expectation that the IPO market was going to pick up earlier this year, and that didn’t fully materialize, at least not in the first quarter.

It was more like the second quarter, touched off by stablecoin issuer Circle announcing it would go public via IPO.

“We also saw a couple of bigger fintech IPOs and more movement, including Chime and Klarna,” she said. “This will certainly continue through the year, and the uptick we saw post-IPO in trade for some of those, has built more confidence in the market.”

As for second half of the year predictions, Dosani also sees “a renewed vigor” around M&A after what she calls “a long period of suppressed M&A activity” that will be seen in a wave of consolidation “fueled by a need for more economies of scale, a desire for more product and geographic expansion, and that we need more liquidity In the venture and private equity spaces.”

According to her, that M&A will come from a few places: one, strategic acquisitions of fintechs by larger, established players, which is already evident in the stablecoin and AI spaces, and two, mergers between fintechs themselves to create more competitive entities.

Similarly, Goyal sees a lot of dry powder sitting out there for fintechs, of which there are many who need liquidity after last raising funds in 2021 and 2022.

He expects key factors, like interest rate cuts to make IPOs and acquisitions more attractive, a need for economic clarity around tariffs and market readiness will help companies seeking to capitalize on improved market conditions and investor appetite. He notes that some IPOs like the Circle, were oversubscribed, signaling potential market momentum.

Stablecoins get their comeuppance

The trio also saw cryptocurrency as another major trend for 2025. They all forecasted, for example, the rise of stablecoins, and this was later boosted by Circle’s announcement. 

“Stablecoins took off and gained traction and acceptance much faster than at least I would have predicted,” Dosani said. “It can often take years to define regulation in a space where that’s new, and where a lot of folks in Congress don’t have a deep understanding of that technology.”

Both Dosani and Allin mentioned the dismantling of the Consumer Finance Protection Bureau, with Dosani saying that “poses real risks to consumers,” and regulators will have to balance enabling innovation and managing consumer protection.” 

Allin explained further about the slowing down of innovation, saying in some ways CFPB policies “were problematic,” for fintechs and banks who wanted to partner with fintechs.

They also predicted that more regulation in the area of cryptocurrency, which came true in the form of the Genius Act, signed by President Trump in July. The act establishes a framework for the issuance of digital assets like stablecoins.

“We felt like banks were going to actually start using stablecoins to address treasury and money movement to replace Swift, wires, ACH and other inefficient means,” Allin told Fintech Nexus. “That was the big one we got really right.”

Fintech hearts artificial intelligence

Predicting that artificial intelligence would revolutionize fintech is an easy bet to make, especially over the past two years. What isn’t so easy to predict is the adoption curve, particularly for the orchestration layer of AI in the enterprise, Allin said.

McKinsey and others have done reports on AI adoption that show anywhere from 5% to 10% of enterprise companies use AI. “Not a big number,” Allin said.

He believes the problem lies in the orchestration of being able to deploy AI on premise. For example, banks, asset wealth managers and insurers can’t send data to a public cloud for AI to do its thing and then send back results. That doesn’t work from a regulatory or legal standpoint, he said. 

What these organizations have to do instead is take the large language models and figure out how to put them in their private cloud. Something that turns out to be a really hard technical problem to solve, according to Allin.

Fin Capital invested in a few companies that support that, including AI enablement company Articul8, but Allin said this is a trend he considers “we’ve gotten sort of right/is still coming.”

Meanwhile, Dosani said that in the second half of this year, AI will move beyond being just a buzzword or a concept investors blindly support, becoming “a fundamental driver of both efficiency and personalization” for the fintech sector.

“We’re going to see much more hyper personalization at scale, where AI is going to enable fintechs and larger financial institutions to offer increasingly tailored products and services based on individual customer data and behavior,” she said. 

For example, operational efficiency to automate back office operations, loan origination, risk management, fraud mitigation or compliance monitoring — wherever AI can help reduce costs and improve accuracy.

Goyal, too, says a lot of fintechs have to embrace AI and agentic AI.

“There’s a lot happening in that space, but I find that fintechs fall into two different vintages: those that emerged out of the pandemic and are naturally rooted in AI and those that emerged between 2010 and 2012 and are actually not that different from banks,” he said. “They never adopted AI as part of their operating model. For fintechs to continue to make profitable growth, they need to be leaner and meaner, and agentic AI will help with that.”