The global fintech sector saw its revenues increase three times that of the finance sector as a whole in 2024, as it enters a new “era of maturity”.
Despite reduced investment in fintech firms, the businesses are maturing and driving up revenues.
According to Boston Consulting Group (BCG), global fintech revenues grew by 21% last year, about a third higher than the growth in 2023, when a 13% increase was reported.
BCG said the sector has become more disciplined, following a period of limited funding.
The scarcity of investment funds was highlighted in a recent KPMG report into EMEA fintech investment trends, which put total investment in 2024 at $20.3bn, compared with $27.6bn the previous year. Total UK fintech investment dropped to $9.9bn, down by 27% from $13.6bn in 2023, according to KPMG’s Pulse of fintech report.
The increased discipline of fintechs is reflected in their financial results. BCG found that 69% of fintechs are now profitable, with firms shifting from “growth at all costs” to profitable expansion due to investor pressure, triggering a “new era” in the sector.
Maturing businesses that have scaled account for well over half of the total revenues, with BCG stating that 60% of total fintech revenues were generated by a group of what it described as “scaled fintechs”.
Coming of age
Deepak Goyal, a managing director and senior partner at BCG, said this group of fintechs are “coming of age”.
He added that external forces have triggered this: “Investors are demanding greater maturity, and regulators want more accountability.”
The UK’s fintech sector saw exceptional growth in 2024, with funding increasing 31% year-on-year and representing half of all European investment Kunal Jhanji, Boston Consulting Group
In 2024, fintech revenues grew by 25% in Europe and 22% in the US. The report said US-based fintechs accounted for 56% of all global sector revenues.
There is room for growth because, according to BCG, fintechs only account for 3% of global banking and insurance revenue. “But new challenger banks are scaling rapidly, with deposit growth of 37% annually – 30 percentage points higher than traditional banks,” the report said.
Beyond the scaled businesses, there are emerging disruptors, said Goyal, which are using the latest technologies such as agentic artificial intelligence (AI).
BCG said agentic AI, which can act autonomously with limited human intervention, represents the next wave of disruption.
UK growth
In the UK, fintechs increased revenues by almost a third in 2024.
Kunal Jhanji, a managing director and partner at BCG, said: “The UK’s fintech sector saw exceptional growth in 2024, with funding increasing 31% year-on-year and representing half of all European investment.
“This is a testament to the UK market’s maturity and investor confidence. The UK government and treasury have put fintech at the centre of their growth strategy.”
He added that if regulations are “done right”, they could enable UK fintechs to set global standards and gain a competitive advantage.
Speaking at the 11th annual Innovate Finance Global Summit in London last month, UK chancellor of the exchequer Rachel Reeves promised continued government backing to the fintech sector.
She told the audience: “As chancellor, I’ve always said it’s my job to back the builders, the wealth creators and the job creators. So, my job is to back all of you in this room. After all, it’s thanks to your work that the UK is a world leader in fintech.”
