10 fintech trends that define the industry's future

Top fintech trends for 2025

The fintech industry has never been static—in fact, it thrives on disrupting the status quo. Over the past few years, economic shifts, regulatory changes, and technological advancements have reshaped financial services. However, while some areas of fintech have cooled, others are seeing unprecedented growth.

So, what trends should we be on the lookout for? AI is already reshaping fraud prevention, real-time payments are scaling rapidly, and personalization is becoming a baseline expectation—especially for younger consumers.  

Here are 10 fintech trends that companies need to consider when planning budgets or launching new products in the coming year.

1. Fintech funding is normalizing (slowly) 

Fintech funding is stabilizing after two volatile years. While fintech funding cooled significantly in 2022 and 2023 due to rising interest rates and economic uncertainty, recent high-profile acquisitions and funding rounds hint at renewed optimism in the sector. 

Last year saw the major acquisitions of Brigit, Bridge, MoneyLion, and TradePMR. At the same time, confidential IPO filings of several fintechs, including Chime, demonstrate renewed investor confidence. 

While fintech funding remains below its peak, 2024 saw a notable stabilization, with startup funding reaching  $314 billion, a 3% increase over the previous year, according to an analysis of Crunchbase data. Global venture investment in 2024 surpassed pre-pandemic levels but remained below the peaks of 2018 ($346 billion) and 2020 ($350 billion).

2. Fraud continues to be a top concern 

Fraud remains one of the biggest challenges in financial services, and fraud attempts are becoming increasingly sophisticated. Fraud losses have continued to increase, with the FTC reporting losses of $12.5 billion in 2024, up 25% over 2023. Losses from AI-driven fraud and synthetic identities are already rising, with nearly half of US and UK businesses falling victim to deepfake financial scams.

Financial institutions are actively investing in fraud prevention technologies to keep pace with evolving threats. For example, Plaid Identity Verification can identify over 16,000 documentary ID types and use selfie and liveness verification to verify identities quickly. Plaid Beacon, an anti-fraud network, allows organizations to share information about false or synthetic identities that have been associated with fraud. The battle between scammers and financial services is nothing new, but it's top of mind this year. 

3. Emerging payment technologies are gaining mainstream adoption 

New payment types are rapidly becoming the norm. P2P bank payments continue to rise, with adoption projected to reach nearly 184 million US mobile phone users by 2026. Meanwhile, stablecoin usage has increased dramatically since 2020, with $2.5 trillion in payments settled annually between May of 2023 and May of 2024. 

FedNow's adoption is accelerating, expanding real-time bank-to-bank payment options for consumers. In Q4 of 2024 alone, The Clearing House reported a 12% increase in volume and 16% rise in payment value. As demand grows, once outlier payment models are becoming mainstream alternatives to traditional bank transfers.

4. Credit score alternatives are expanding consumer credit access

Traditional credit scores continue to leave an estimated 49 million Americans without access to loans, and, in some cases, lack of credit can limit opportunities for housing and employment. This includes recent immigrants, young people, and the underbanked. 

To bridge this gap, lenders are increasingly incorporating alternative credit models that use cash flow data, pay stubs, and utility bills to paint a more complete picture of a borrower’s finances. 

Leading this trend are API-based fintech tools and open banking regulations, which allow financial institutions to access alternative data sources instantly.  This enables faster, more informed loan decisions while expanding financial access for millions of Americans. This trend away from relying solely on traditional credit scores will allow fintechs to access a broader customer base.

5. Pay-by-bank usage continues to grow. 

Pay-by-bank is gaining momentum in the U.S., with two-thirds (67%) of consumers now saying they are open to pay-by-bank, even when credit and debit cards are an option (openness increases to 72% for fintech users and 74% for Millennials). 

Instant bank payment rails are expanding rapidly, fueled by the increasing adoption of FedNow and RTP.  Consumers and businesses sent an average of $190 million in payments per day through FedNow, while RTP reported that payments in 2024 increased by 94%, reaching $246 billion. 

FedNow’s rapid adoption is already driving significant growth in instant payment rails, with participation tripling in the past year. More than 1,200 financial institutions currently participate in FedNow, up from 400 last year—signaling a significant shift towards real-time payments.

6.  Regulatory agencies aren’t going anywhere—but their oversight is evolving

There have been persistent reports of reforms and slashes at major regulatory agencies like the Fed, CFPB, and the SEC. Regulatory uncertainty can create confusion for banks and fintechs, which makes it a trend worth paying attention to. 

Restructuring or dismantling these agencies would require legislative effort, an unlikely (but not impossible) event. Instead, there will likely be a shift toward modernizing regulatory oversight to align with today’s digital finance landscape. 

As financial services become increasingly digital, regulatory agencies are looking at how to best adapt and modernize their approaches to match today’s digital world—making regulatory changes a key trend shaping fintech. 

7. AI hype is everywhere, but real consumer impact is still limited

AI was a hot fintech topic in 2024, with many companies rapidly adopting AI tools for internal operations and fraud prevention. However, despite the buzz around AI-powered banking and investment products, consumer-facing AI applications remain largely experimental.

This is due in part to ongoing challenges with data privacy and accuracy. Nearly 35% of organizations surveyed by Deloitte cited mistakes and errors with real-world consequences as the top potential barrier to adopting generative AI. Financial institutions, which operate in a highly regulated environment, have been slower to roll out AI-driven customer experiences compared to other industries.

But that hasn't slowed down AI adoption behind the scenes. Morgan Stanley, for example, rolled out its OpenAI-powered tool, Debrief, in under a year. Citi and JPMorgan Chase deployed a generative AI tool for their employees, and BNY Mellon signed a multi-year deal with OpenAI. While consumer-facing AI applications are still evolving, the industry-wide investment in AI signals a long-term shift in how financial institutions operate.

8.  Stablecoin usage is growing massively 

Stablecoins, a type of cryptocurrency that is designed to have a much more stable price, are growing in popularity. The volume of cross-border payments made using stablecoins has grown tenfold since 2020 to $2.5 trillion annually. 

There are also reports that Tether, the world's largest stablecoin issuer, expects to invest $2.5 billion to $3 billion in 2025 from its investment arm. Legislative and regulatory infrastructures—including a likely cryptocurrency bill in 2025—will be key to their growth. 

As stablecoins gain traction, their integration into mainstream financial systems is already underway, making regulatory clarity and infrastructure development key areas to watch.

9.  AI and ML help reduce financial fraud risks

Financial institutions face significant challenges from fraud, with nearly 90% of businesses reporting fraud losses of up to 9% of their annual revenue. To combat these threats, many institutions are turning to artificial intelligence and machine learning solutions. 

A survey by MasterCard found that 49% of respondents have already integrated AI to fight transaction fraud. The AI in fraud management market size has grown rapidly and is projected to grow from $13.05 billion in 2024 to $15.64 billion in 2025. 

An illustrative example is Plaid's Signal product, which, when integrated with internal risk models, can detect up to 55% of unauthorized returns. This highlights the potential of AI-driven tools in fraud prevention. As financial fraud grows more sophisticated, the adoption of AI and ML technologies is poised to play a crucial role in enhancing security measures and restoring consumer trust.

10. Personalization and micro-segmentation in fintech are becoming more important than ever 

Consumer demand for tailored financial experiences is driving a shift toward personalization and micro-segmentation. Features that enhance product value—like customized loyalty programs and AI recommendations— are becoming key differentiators in fintech.  

Notably, 81% of Gen Z consumers worldwide believe personalization can deepen their relationships with financial service providers, compared to just 47% of those over 65. To meet these expectations, fintech companies are leveraging AI to analyze real-time data and deliver hyper-personalized financial experiences.

As competition grows, fintechs are emphasizing personalization and micro-segmentation to better serve different demographics—particularly digital-first consumers like Gen Z—who expect seamless, personalized interactions.

The future of fintech is powered by innovation 

The fintech industry has always evolved rapidly, but today's trends—from new payment types to AI-driven fraud prevention and stablecoin adoption— are reshaping financial services. Consumers expect faster, more secure, and more personalized experiences, and fintech companies are responding with innovative trends that are already gaining traction. 

One thing is clear: Fintech companies that embrace innovation and stay ahead of emerging trends will be best positioned to thrive. The future of fintech belongs to those who can harness new technology and emerging trends to create seamless, personalized, and secure financial experiences.