Latest news with #–BCGGlobalFintechReport
Economic Times
3 days ago
- Business
- Economic Times
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 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 expanding into new countries? That's trickier. Different regulations, cultures, and fierce competition make international moves 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 now, fintechs manage $500 billion in loans—a drop in the ocean compared to $18 trillion in US household debt 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 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 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. 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. 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.
Time of India
3 days ago
- Business
- Time of India
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. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Nu Mai Cumpăra Laptop! Acest Mini PC Face Tot la 1/3 Preț! Află mai multe Undo 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. Live Events 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. Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories 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.
Time of India
3 days ago
- Business
- Time of India
Regulators realising fintechs are here to stay: QED's Nigel Morris
Fintechs are no longer scrappy outsiders. They're scaling faster than traditional players and increasingly, regulators are recognising them as a permanent fixture in the financial services industry, QED Investors' cofounder Nigel Morris told us. In an exclusive interview during his annual visit to India, Morris said fintechs are beginning to dominate categories such as earned wage access, money transfers, and neobanking. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Fintechs are no longer scrappy outsiders in the financial world; they are scaling faster than traditional players, dominating high-growth segments and increasingly being recognised by regulators as a permanent feature in the financial services industry, according to QED Investors cofounder Nigel Morris 'Regulators are now internalising that fintech is here to stay,' Morris told ET in an exclusive interaction during his annual India visit. Fintechs have a role to play in the future of how financial services are delivered, he visit comes at a time when India's fintech sector is navigating tighter regulatory oversight, particularly around unsecured lending and digital compliance. He sees this not as a setback, but as a necessary phase. 'It's a natural course laying the groundwork for the next wave of innovation.'Referring to the recently released QED–BCG Global Fintech Report, Morris said, fintechs are not only growing faster than incumbents, they're starting to dominate key categories. 'Earned wage access (allowing employees to access a part of their wages before the payday) is a great example—Refyne in India operates in a space where there isn't a single incumbent,' he said. 'In money transfers, it used to be Western Union, now it's Wise and Remitly. For buy now, pay later, Klarna and Affirm are dominating, not banks. In neo-banking, look at Nubank, Monzo and Chime. What we're seeing is that incumbents, either by default or by design, are simply not playing in these spaces.'It would be 'very interesting' to see how India's landscape evolves, whether the legacy players step up or continue to lag behind, he said. 'Their (banks') skills might not be as relevant; they've got other things on their mind.'A key trend QED is tracking is how artificial intelligence is reshaping financial services from underwriting to product delivery. 'Fintechs are adopting AI at a much faster rate than incumbents. That's not surprising,' said Morris. 'They're more digital, more tech-centric and faster in how they move.'This tech-led agility, he said, is giving fintechs an edge in product innovation, risk assessment and consumer engagement, while legacy institutions are still weighed down by infrastructure and regulatory US-based fund plans to deploy $250–300 million in early- and growth-stage startups across India and the Asia-Pacific region. Armed with a $925 million fund raised in 2023, QED is eyeing investments across Indonesia, Singapore, Japan and other APAC the past five years, the fintech-focused VC firm has invested roughly $220 million in Asia. Its India portfolio includes early bets in neo-banking platform Jupiter, credit card sourcing platform OneCard, financial infrastructure startup Upswing and Efficient Capital Labs, which offers financing solutions for SaaS companies. In December 2024, QED led a $25 million funding round in OneCard While India's fintech sector has faced increasing regulatory scrutiny, especially around NBFCs (non-banking financial companies) and unsecured lending, Morris doesn't see this as a deterrent. 'The regulators stepped in with a cautionary stance—rightly so,' he said. 'They said we have to really think about AML, KYC and about a little bit more scrutiny to make sure that the banks that partner with the fintechs are living up to the responsibilities that they have. From there, move to a new equilibrium… I think that's a natural cycle.'QED Asia head Sandeep Patil, who oversees India investments, echoed the view. 'I'm not turning a blind eye to what's happened. Yes, regulations have slowed lending and caused short-term pain. But we're far more optimistic about the long term,' he reset in the fintech market has affected funding in the sector. Cred is in talks to raise fresh funds at an around $4 billion valuation—down from $6.4 billion in 2021, as reported by ET on April 14 . QED portfolio firm Klarna of Sweden dropped from $46 billion to $6.7 billion before recovering to a targeted $15 billion ahead of IPO . Stripe went from $95 billion to $50 billion before a tender offer lifted its valuation to $91.5 billion.'The rise and fall played out over just two and a half years,' Morris said. 'But in the last year, things have been relatively stable.'He noted that public fintechs traded at 4–5x revenue pre-Covid, surged to 20x during the digital wave, and are now returning to more rational however, continues to buck that trend. 'India benefits from a roaring wind at its back, strong GDP growth and a different economic cycle compared to the US, UK, or Latin America,' he bullish on India, QED remains measured on certain sub-sectors like neo-banking.'Many haven't demonstrated meaningful product engagement or cross-sell success,' said Patil. 'They either don't have a wide enough product suite, or they haven't had enough traction on the core banking product. Then you're just another account inside someone's app—and the story doesn't go anywhere.'Still, Morris believes that the good fintechs will earn regulatory trust and potentially, banking licences. 'In the long run, I believe some of them will end up with licences at different speeds in different markets,' he said. 'But there's still room for strong partnerships between good fintechs and good banks. That's the opportunity.'Morris has long pushed back against the hypergrowth-at-all-costs mindset that defined much of the past decade's startup boom. 'I've always railed against the model of blitzscaling in financial services—the idea that you acquire a load of customers, lose money on every one of them, and figure out the model later. I've never believed in that,' he said. 'We are incredibly meticulous and focused on unit economics.'In the Indian context, that model faces even more pressure. 'The cost to acquire it is really low. But the ARPU (average revenue per user) is equally low,' he said. 'So, we're playing a different economic game. In the end, how those two net off is critical. You're dealing with a much larger customer base with thinner economics per user. The bet is on how big they can get, who they can partner with, and what else they can sell and at what rate.'
