Neobanks and digital assets emerge as fintech’s next growth engines: report

Neobanks and digital asset businesses have emerged as key growth engines for fintech firms, which have delivered record profitability with average EBITDA margins of 20%, and 74% of major public players reporting profits in 2025, according to a new report.

According to the Global Fintech Report 2026, published by Boston Consulting Group (BCG) and FT Partners, fintech revenues exceeded $500 billion last year after growing 22%, a pace the report said was more than four times faster than traditional financial institutions. 

Drawing on data from BCG’s FinTech Control Tower platform, executive interviews, and market research, the report said the industry’s recovery has been driven by operating performance rather than easy access to capital.

Fresh investor interest has accompanied that improvement. BCG and FT Partners reported that fintech companies attracted $58 billion in equity funding during 2025, up 53% from a year earlier. Exit activity also accelerated, with fintech IPOs increasing 50% to 42 deals, while annual merger and acquisition volume climbed from $105 billion in 2023 to $251 billion in 2025.

Digital assets and AI emerge as key growth battlegrounds

Beyond payments and lending, the report identified digital assets as one of the areas drawing increasing strategic attention from fintech acquirers. According to BCG and FT Partners, companies are turning to acquisitions to strengthen capabilities in digital assets, artificial intelligence, and compliance as competition intensifies and internal development timelines become less practical.

M&A activity has also taken on a different character. The report found that scaled fintech firms completed 659 acquisitions in 2025, surpassing the 589 deals completed by banks and other incumbents. Outside of 2023, BCG and FT Partners said this was the first time fintech buyers outpaced traditional financial institutions in dealmaking activity.

Artificial intelligence is also becoming a differentiator across the sector. BCG’s analysis found that fintech firms using AI effectively have achieved up to five times higher developer productivity, with notable gains in engineering, underwriting, compliance, and customer support functions. The report said the strongest results came from redesigning workflows around AI rather than simply deploying new tools.

Neobanks expand beyond their original playbook

Elsewhere in the report, BCG and FT Partners pointed to the evolution of neobanks as one of the most important developments shaping the industry’s next phase. The firms said leading digital banks are moving beyond payments and customer acquisition to build multi-product financial platforms.

Wealth management, insurance, lending, investing, and cross-border payments have become key expansion areas. Consumer credit, in particular, was identified by the report as a major opportunity because it allows neobanks to deepen customer relationships while applying alternative underwriting approaches.

Across Europe, the report noted that several leading neobanks have added investment services, trading products, and mortgage offerings. In Latin America, expansion has centered on credit products and personal lending across multiple markets.

Conditions in the U.S. remain more challenging. According to BCG and FT Partners, high customer acquisition costs, a fragmented regulatory structure, established incumbent banks, and a heavily banked population make large-scale disruption difficult for foreign entrants. 

As a result, the report concluded that overseas neobanks are more likely to find success in targeted market segments than through broad expansion across the country. Domestic fintech firms, meanwhile, are preparing for increased competition by targeting higher-value customer segments.

Regulatory developments are also becoming more important to growth strategies. BCG and FT Partners said the gap between bank and fintech regulation is narrowing across the U.S., UK, and EU, with licensing and charter pathways becoming more accessible despite continuing compliance requirements. 

The report noted that a growing number of fintech companies have sought U.S. federal bank charters to gain funding advantages, increase control over product offerings, and own customer relationships directly.

“Fintech has not simply bounced back from the reset years, it has come out the other side as a fundamentally more mature industry,” – Inderpreet Batra, Managing Director and Senior Partner at BCG and Global Leader of the firm’s Payments & Fintech business. 

Batra said the industry’s leading firms are now combining profitability with expansion into new products and markets.

Looking at the industry’s position today, BCG and FT Partners estimated that fintech now accounts for roughly 4% of global financial services revenue.