The global fintech industry has entered a new era defined not by speculative exuberance but by a balanced focus on scalability, profitability, and operational and regulatory maturity.

A new report by McKinsey & Company, in partnership with QED Investors, offers an overview of this landscape, outlining four trends shaping this “new age” of fintech.

The report highlights artificial intelligence (AI) and digital assets as pivotal technologies driving efficiency and unlocking new business opportunities. It also notes a strategic shift among established firms towards securing banking licenses to fully integrated financial institutions that control the entire value chain.

Finally, the report identifies the rise of “horizontal” fintech companies. These software providers, which are helping modernize incumbents, are experiencing robust growth and attracting investors.

AI as the great accelerant

AI represents the most consequential force reshaping fintech, acting as an accelerant behind most structural trends that have been eroding incumbent advantages for years.

Fintech firms are deploying AI to build products in weeks rather than years, serve customer segments that were previously not economically viable, and compress cost structures so aggressively that legacy operating models cannot compete on price.

Early adopters are already tangible returns. According to a 2026 report by the Cambridge Centre for Alternative Finance, AI adoption in financial services is generating measurable improvements, especially in technology, data, and product functions, where 79% of respondents reported positive outcomes. Fintech firms reported greater benefits than traditional firms, with 86% observing gains compared to 68% for incumbents.

Back office and operations followed closely at 75% overall, with fintech and traditional firms reporting similar results at 76% and 72%, respectively, indicating that operational automation is delivering consistent benefits across firm types regardless of origin.

However, McKinsey warns that for incumbents that have not yet moved decisively, the competitive gap is widening. As for scaled fintech companies, AI has now become a double-edged sword that powers their current advantage while also simultaneously lowering the barriers that once protected them from the next wave of insurgents.

Stablecoins for payment transactions

Another key trend highlighted by McKinsey is the rise of digital assets, including stablecoins and tokenized deposits. Stablecoins offer instant, near-free settlement, making them highly promising for cross-border payments and remittances.

However, the report notes that the use of stablecoins for real-world applications remains modest, with the vast majority still utilized for trading, arbitrage, and crypto-native activities. Of the US$35 trillion in reported annual stablecoin transaction volume, only US$390 billion, or about 1%, represented true end user payments such as remittances, and supplier payments, in 2025, according to McKinsey estimates. This figure represents a small fraction of total volume that is nevertheless more than double the 2024 level, underscoring growing utility.

The stablecoin market has expanded rapidly in recent years, and industry forecasts reflect strong expectations for continued growth. Citi believe that total stablecoin issuance could reach between US$1.9 trillion and US$4 trillion by 2030. In comparison, aggregate stablecoin supply stood at US$280 billion in September 2025, up 40% from approximately US$200 billion at the start of 2025. This reflects a surge in adoption and increasing integration of stablecoins into payment systems.

Banking licenses as strategic assets

The third trend highlighted by McKinsey is the accelerating race to secure banking licenses. These licenses are no longer perceived as regulatory hurdles but rather strategic assets that allow fintech companies to transition from peripheral service providers to fully integrated financial institutions.

In 2025 alone, 21 fintech firms applied for banking charters in the US, a figure that exceeds the previous four years combined. These include industry giants such as PayPal, Ripple, and Interactive Brokers.

Securing a banking license grants these companies direct control over their financial infrastructure, significantly reducing operational costs and unlocking superior scalability. They can accept customer deposits for a more stable source of funding, and connect directly to payment systems, removing dependency on intermediary banks.

They can also offer a broader range of financial services under one roof, improving margins and customer retention. For crypto-focused companies like Ripple, a banking license also provides regulatory legitimacy and closer integration with the traditional financial system.

The rise of horizontal fintech

Finally, the fourth and last trend highlighted by McKinsey is the rise of horizontal fintech, a sector that’s gathering momentum and attracting a disproportionate share of investment. Horizontal fintech firms are software companies and ecosystem enablers that help digitize incumbents and improve efficiency across the financial-services value chain.

For example, agentic AI players like Omilia offers self-learning AI solutions for regulated industries like financial services that can be deployed quickly and deliver cost and customer benefits within days. Others, like Alloy and Footprint, provide automated identity decisioning and risk management tools used by banks, credit unions, and fintech startups to automate know-your-customer (KYC), know-your-business (KYB), and anti-money-laundering (AML) screening and fraud detection.

Today, horizontal fintech companies represent about 13% of industry revenues, but have grown 25% faster than firms directly competing with financial-services players over the past four years.

This accelerated growth stems from their role as enablers of the entire industry’s transformation. These companies are less dependent on consumer trends and are driven by the structural necessity for banks to modernize. This makes their growth trajectory more robust and resilient to market saturation.

Investors are increasingly recognizing the potential of these firms. In 2021, firms underwriting insurance direct to customers attracted 75% of investment in the UK’s insurtech industry, while horizontal insurtech firms attracted just 25%. By 2024, that proportion had flipped, with more than 90% of funding going to insurtech firms focused on digitizing incumbents.

Featured image: Edited by Fintech News Switzerland, based on image by geetaroy via Magnific