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Forget the Hype: What’s really happening in Fintech now
Andreas Iten
Andreas Iten is the CEO and co-founder of Tenity. Andreas originally worked as the Chief Information Officer for the division of financial information at SIX, where Tenity was born. He also co-founded SIXHackathon (Europe’s largest fintech coding contest) and today holds several board seats at fast-growing fintech companies.
Best takes come from those in the arena.
Tenity Takes is a series where our team shares what’s really on their minds: thoughtful opinions, real experiences, and sharp perspectives on what’s happening in fintech right now: A fresh perspective from the heart of fintech
Tenity Takes brings you authentic voices and views straight from those building the future of finance. And who better to launch this new series than Andreas Iten, CEO of Tenity, opening the conversation with his personal take on the state of fintech.
Two new reports—BCG’s “Fintech’s Next Chapter” and PitchBook’s May 2025 European fintech update—paint a nuanced picture of where we’re really at. Yes, there’s a rebound in funding and early-stage energy. But it’s also clear: the era of easy money is over. What’s emerging is more tactical, more selective, and—frankly—more interesting. Here’s what stood out from both the global and European angles:
- Global fintech equity funding rose +34% YoY in Q1 2025.
- Revenue multiples climbed +10%, the first sign of recovery from the 2023 24 downturn.
- AI-native fintechs captured 49% of total equity funding, far above their “fair share” of 23%.
- Despite 37,000+ fintechs worldwide, only ~100 are scaled (>$500M revenue).
- Fintech has only penetrated 3% of global banking and insurance revenues leaving 97% still in play.
PitchBook’s May 2025 European fintech update:
- Deal count fell 22% YoY in Q1 2025. While this reflects macro uncertainty, it also masks a more focused trend.
- Mega-rounds are returning. Checkout.com and Trade Republic raised significant rounds, showing that scale-up capital is available for strong players.
- Seed and early-stage deals are healthy. There’s consistent deal flow in pre-Series A, indicating long-term ecosystem health.
- Infra and AI fintechs are drawing outsized attention. Investors are backing operational infrastructure, B2B tooling, and AI-native models.
- VC dry powder is being redeployed selectively. Fund managers are doubling down on defensible models with strong unit economics.
So, what does all that tell us?
Fintech isn’t just bouncing back—it’s evolving. The funding rebound, the selective bets, the early-stage activity, they’re not signals of a hype cycle returning. They’re signs of a sector growing up. But if you’ve been around fintech long enough, you’ve probably heard a familiar refrain lately: “No one talks about fintech anymore it’s all AI now.” Let’s unpack that.
What AI Is actually doing to Fintech
Let’s talk about AI. Yes, there’s hype. But there’s also undeniable progress.
We’re now building fintech solutions with unprecedented speed and efficiency. Software that took 12 months to build in 2020 can often be built in 6 weeks today. For startups, especially in complex verticals like regtech, compliance, or SME finance, this is a breakthrough.
AI drastically lowers the cost to build and serve. Suddenly, segments like small businesses—previously too expensive to reach—become viable markets. It also enables better user experiences, smarter fraud prevention, and personalization at scale.
But lower costs and bigger promises also bring something else: FOMO-fueled storytelling.
Not every “AI-powered” startup deserves the buzz.
Case in point: Builder.ai. Backed by Microsoft. Hyped as automated, AI-driven software dev. Except—according to a Bloomberg investigation (May 2025)—much of the “AI” was hundreds of offshore engineers manually doing the work.
It’s a reminder: before you get dazzled by the deck, ask the simple question: Is this startup actually AI-native, or just fluent in buzzwords? At Tenity, we don’t just look for AI as a feature. We look for it in the business model. Does it unlock something that wasn’t viable before? Does it solve a problem better or faster than existing solutions? Is it defensible through deep vertical expertise and knowhow?
That’s where the real opportunity lies.
That 3% everyone’s talking about
The BCG report Fintech’s Next Chapter (May 2025) includes a stat that’s been making the rounds: fintech has only penetrated 3% of global banking and insurance revenues (p. 4). To some, that sounds like disappointment. To me, it sounds like untapped potential.
That 3% hasn’t been disrupted, it’s been transformed. There’s a big difference. Disruption is flashy and short-lived. Transformation sticks. It redefines processes, rewrites workflows, and leaves no part of the system untouched.
From the internet and mobile banking era to the blockchain wave, we’ve seen fintech evolve in stages. Each one chipped away at the old model. But we’ve only just scratched the surface. The foundations of finance—how we insure, lend, onboard, monitor risk—still look eerily similar to how they operated decades ago.
That’s not a failure. It’s an opportunity.
Europe: Difficult by design
You might have seen that PitchBook reported a 20% drop in fintech deal count in Europe in Q1 2025, even as global equity funding rose by 34% year-over-year (BCG, p. 2). That divergence might spook some investors. It doesn’t spook us.
Europe is complex, fragmented, and often slow to scale. But that’s also what makes it defensible. Each market has its own regulatory structures, cultural context, and customer behaviors. If you can build a product that works in this environment, you’re building resilience into your company’s DNA.
We don’t try to do Europe from a single office. At Tenity, we’re embedded in local European ecosystems across cities like Zurich, London, Madrid, Tallinn, and Istanbul. Each of these markets has its own regulatory rhythm, founder mindset, and path to scale. Local presence reveals local nuance and that’s critical in a continent as diverse and complex as Europe.
Asia: The scale offset
Now contrast that with Asia.
In markets like Singapore or Hong Kong, you have mature regulatory environments and global capital access. In India or Southeast Asia, you find massive underbanked populations and infrastructure gaps that smart fintechs can leapfrog with new models.
This mix of mature hubs and fast-growth emerging markets creates what I see as the perfect counterpart to Europe’s slower-moving complexity. It’s why Tenity focuses on both regions. They move differently—but together, they offer diversified, high-upside fintech investment exposure.
Where we’re placing bets
Here’s what excites us right now:
- Verticalized fintechs that go deep, not broad—solving painful, defensible problems in areas like payments, lending, onboarding, and regtech.
- AI-native infrastructure, where AI isn't an add-on, but core to the architecture.
- SME-focused products, finally economically viable thanks to low-cost development and delivery.
- Embedded finance in B2B verticals, especially when coupled with rich data layers.
- Cross-border compliance platforms, solving for growing regulatory complexity in Europe and Asia.
- These aren’t categories that grab headlines. But they do grab revenue and eventually, market share.
So, is Fintech dead?
Not at all. But the easy money, hype-stage of fintech might be. And I think that’s a good thing.
Now, we’re entering the phase where real scale is built. Where growth is earned, not just funded. Where value comes from solving something complex, not just marketing something simple.
We’re also seeing signs of consolidation and maturity. According to PitchBook, mega-rounds are returning in Europe meaning investors are no longer betting on hype but doubling down on proven models.
This is the evolution we’ve been waiting for.
Final Thoughts: The next 97%
So where are we now?
If fintech has only penetrated 3% of global financial services, we’re not late—we’re early. There’s still 97% of the industry waiting to be transformed. And with AI now in the toolkit, we have better levers than ever before.
To founders: build deeply, not trendily.
To investors: chase defensibility, not just AI.
To corporates: don’t wait to adapt—partner and co-create.
We’ve only seen the first act of fintech. The next one? It’s going to be quieter, smarter, and a lot more powerful. And we’re here for it.
Do you want to keep the inspiration going? Here are more takes from Andreas:
- Successful corporate innovation is hard.
- Startup scouting: What's the right way to do it?
- How Saudi is shaking up the innovation game
Interested in joining our next wave of fintech innovators? Apply to our Fin/Tech Accelerator Program in Europe or Singapore
