4 Fintech Trends That Buoyed the Industry in 2024

Despite a huge investment drop in recent years, fintech made a splash last year. Here’s what happened.

Written by Anton Chashchin
Published on Jan. 29, 2025
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Investments in fintech companies dropped by 91 percent from 2021 to 2024. Fintech companies, however, worked hard to improve their bottom lines in 2024. 

While fintech companies face significant challenges — rising interest rates, stricter regulatory oversight and cautious investor sentiment — the sector still has plenty of opportunities. And the companies that capitalize on these opportunities are capturing the attention of investors.

Let’s take a look at the main trends in fintech that investors considered in 2024.

4 Biggest Fintech Trends From 2024

  1. Investors preferred smaller, earlier-stage projects.
  2. More fintech companies embedded AI into their products and operations than ever before.
  3. Crypto made a big comeback.
  4. Digital banks preferred efficiency and profitability over growth.

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4 Key Fintech Investment Trends

1. Investors Shifted Away From Mega Deals

Mega deals are not as popular as they were before. In 2024, there was a sharp pullback from them with preferences given toward smaller, early stage ones. Deals worth $200 million or more now account for just 28 percent of total invested capital, down from 47 percent in 2021. In fact, entrepreneurs are closing more than three seed deals for every one Series A, which highlights a significant shift toward early-stage innovation. Investors were being cautious as large-scale investments became riskier and less appealing.

2. AI-Native Fintech Companies Made a Name for Themselves

Experts are recognizing AI’s growing strategic importance with mentions of AI in fintech corporate earnings calls increasing fourfold since 2021.

AI-native fintech companies, which embed AI tools directly into their products and operations, are creating more value per dollar invested compared to legacy fintechs. The median value creation for AI-native companies is 4.0x, compared to 2.7x for first-generation fintechs. 

3. Blockchain and Crypto Made a Comeback

2024 was remarkable for cryptocurrencies. The whole crypto market was boosted. Bitcoin surpassed $100,000, crypto adoption has increased sharply and Bitcoin is even under consideration as a national reserve in many countries. 

The E.U.’s MiCA regulation is also a defining factor here. Many people would hesitate entering the market, considering it to be tied to illegal activities. But with clearer guidelines for digital assets, MiCA fosters a more stable environment for blockchain-based solutions.

4. Investors Focused on Efficiency and Profitability

As for digital banking solutions, the focus has shifted from growth at all costs to efficiency and profitability. Nearly 80 percent of fintech companies have improved their EBITDA (earnings before taxes, depreciation and amortization) margins year-over-year, which shows a broader push for financial discipline, according to SVB’s report. And investors are favoring digital banks that can demonstrate robust cost controls, customer acquisition efficiency and innovative use of AI to improve productivity.

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Challenges for Investors and Fintech Companies

The environment of digital payments is highly competitive. As fintech evolves, new players enter the market, which forces companies to innovate rapidly while addressing shrinking profit margins. Regulatory frameworks, while providing greater clarity and security, also introduce some hurdles, especially since new regulations emerge often. So, compliance with new frameworks like MiCA can add further pressure on scalability and operations.

Crypto and blockchain might be the area where we feel regulations the most. There, regulatory uncertainty remains a persistent challenge, particularly in regions where guidelines are still evolving. At the same time, in the E.U., the regulations might seem too strict. The main challenge is to find the balance between regulation and freedom so that it doesn’t hold back innovation. 

Companies must demonstrate clear use cases and compliance readiness to attract investors, all while navigating the volatility of digital asset markets. Meanwhile, digital banking solutions face macroeconomic pressures, such as rising interest rates and tightening margins.

Those challenges are partially a reason why investors do not really consider mega deals and prefer something smaller. The area and the factors from the outside are changing rapidly, making balancing risk and reward more challenging. It requires a sharper focus on companies with proven resilience, innovation, and adaptability.

As we look ahead to 2025, fintech investment patterns are set to evolve further. Despite the current headwinds, the fintech sector remains resilient and offers investors a roadmap to long-term value creation.

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