Identifying Strategic Opportunities for Fintechs

The opportunities: global fintech infrastructure Money moves clumsily across borders, but increased consumer and business demand for better experiences is attracting top entrepreneurs to solve these problems. There are many areas of opportunity here: 📌 Creating multi-country rails It con tinues to be challenging to move money across a single border. Businesses are often left waiting for days for a payment to go through, without knowing the exact foreign exchange fee. Moving money between multiple countries multiplies this problem. Several existing companies have already integrated with various local rails to help companies orchestrate money movement, but opportunity still exists for new players to create seamless and transparent money movement experiences between countries. 📌 Building embeddable payment infrastructure Increasingly, companies aim to monetize through financial services, but in many geographies, it is still difficult to find modern card-issuing partners or white label payment acceptance. Furthermore, global software companies are frequently compelled to partner with several different infrastructure providers to cover the necessary geographies, a complex process that requires maintaining multiple vendors.  📌 Enabling borderless business banking Businesses operating in multiple countries often open several bank accounts per country—correspondent banks to facilitate international transfers, local banks to take advantage of the best local banking services, additional investment or treasury accounts, and more. This process is slow, hinders cash visibility across the company, incurs high expenses when moving money (even within a single company), and complicates end-of-month reconciliation. The increasing prevalence of open banking in many countries offers new companies the opportunity to create an application layer that offers multi-country account visibility and other services.  📌 Satisfying global compliance Know Your Customer or Know Your Business (KYC/KYB) compliance in a single country is often complicated. It not only requires integrating the right data sources, but also creating a process that feels frictionless to the customer while satisfying all compliance requirements. Outside of customer onboarding, complying with local regulations around aspects such as data storage or reporting requirements can be challenging, especially when operating in multiple countries. 📌 Combatting fraud The advent of real-time payments in many countries will solve some frustrating payment delays. However, this magnifies another problem: fraud. As generative AI tools become more widespread, the cost to fraudsters of iterating malicious content drops to near zero: they can write and test thousands of phishing attack emails in minutes and continuously tweak the ones that work best. In this new landscape, effective fraud solutions for cross-border payments will become increasingly important Source a16z #fintech #crossbordertransfers

#Blockchain | #FinTech | #Payments : 🌍💸 The future of cross-border payments is here, and it’s tokenized! Deloitte’s recent report on multibank tokenization networks highlights a seismic shift in global payments, with a projected $50B in savings for businesses by 2030 through tokenized currency networks. For fintech startups, this is a golden opportunity to innovate and capture whitespace in a rapidly evolving market. 🚀 🔍 Key Insights from Deloitte's Report: Pain Points Persist: High costs, slow settlement times, and multiple intermediaries in cross-border payments (especially wholesale transactions >$100K) continue to frustrate businesses. Traditional systems, reliant on correspondent banks, are bogged down by time zone differences and legacy tech. Tokenization as a Game-Changer: By leveraging blockchain and tokenized assets (stablecoins, tokenized commercial/central bank deposits), banks are piloting 24/7 instant settlement systems. These reduce handoffs, cut compliance costs, and integrate payment messaging with fund transfers. Stablecoins Lead the Way: With bipartisan U.S. support and President Trump’s executive order pushing for dollar-backed stablecoins, these assets are poised for rapid adoption in wholesale payments. 🔥 Whitespace Opportunities for Fintech Startups: (1) Interoperability Solutions: Legacy settlement systems and emerging blockchain networks often don’t speak the same language. Build APIs, gateways, or middleware to bridge tokenized networks with traditional systems, enabling seamless onboarding for banks and expanding supported currencies. (2) Smart Contract Innovation: Develop programmable payment solutions using smart contracts to automate compliance checks, validate originator/recipient details, or trigger payments based on real-time data. This could reduce friction and enhance trust in cross-border flows. (3) Stablecoin Infrastructure: Create tools to simplify the “stablecoin sandwich” model—converting local currencies to stablecoins for instant blockchain transfers. Focus on user-friendly interfaces for smaller banks or businesses hesitant to adopt tokenized systems. (4) Digital Identity & Compliance: With regulatory frameworks still evolving, there’s room for fintechs to offer digital identity management or prevalidation tools that embed compliance into tokenized transactions, reducing costs and delays. (5) Real-Time Liquidity Services: Build value-added services like liquidity management platforms that help banks and corporates optimize working capital tied up in slow settlements. ⚡ Why Act Now? The race to real-time payments is accelerating, and banks that lag risk losing ground to fintechs and consortiums. Startups that innovate in tokenized payment infrastructure can position themselves as key partners for #banks, regulators, and businesses. 👇 #Fintech #Blockchain #CrossBorderPayments #Tokenization #Innovation EmpowerEdge Ventures

One of the biggest fintech opportunities in the world right now may be in Bangladesh. Bank deposits have hit a five year high in Bangladesh—which ironically means banks are less incentivized to lend to SMEs and the middle class. And considering there's not much credit scoring infrastructure, there's no way to do it easily anyway. The result? SME contribution to GDP sits at 25-30%—compared to 45-60% in Indonesia, Vietnam, and Pakistan. This means millions of people and businesses can't borrow, can't scale, and can't build wealth. This is exactly where well-funded fintech startups can fill the gap: Alternative credit scoring—mobile money flows, utility payments, transaction history—can do what traditional banks haven't been able to. And the market makes it even more compelling: 180 million people, a nearly $500 billion economy, and a middle class with rising incomes and almost no access to formal credit. For those in the diaspora and beyond, this is a rare moment where market timing, market size, and genuine human impact align. This wouldn't just be about making money but fundamentally changing the lives of millions. The opportunity is here—who wants to build?

This is the 2025 fintech unicorn list. But valuations, fundamentals, and investor expectations have completely changed. This is my take. 𝟭. 𝗩𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻𝘀 𝗵𝗮𝘃𝗲 𝗿𝗲𝘀𝗲𝘁 The 2021 highs were unsustainable. The correction that followed wiped out inflated multiples but forced companies to get serious about product-market fit, monetization, and real-world traction. A $5bn valuation today means something fundamentally different than it did four years ago. 𝟮. 𝗜𝗻𝗳𝗿𝗮𝘀𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲 𝗶𝘀 𝘁𝗵𝗲 𝗻𝗲𝘄 𝗻𝗮𝗺𝗲 𝗼𝗳 𝘁𝗵𝗲 𝗴𝗮𝗺𝗲   The standout companies aren’t just building apps or enabling slick UX - They’re becoming essential layers in the financial services stack. APIs, orchestration layers, compliance tooling, embedded payments - these are the new growth drivers. 𝟯. 𝗧𝗵𝗲 𝗔𝗜 𝗽𝗹𝗮𝘆  Fintechs are no longer just experimenting with AI - they’re embedding it into risk, onboarding, personalization, fraud, and servicing. The most forward-looking unicorns are building agentic, decision-making layers that automate complexity at scale. It’s not about chatbots anymore - it’s about intelligent orchestration across the entire financial stack. 𝟰.𝗣𝗿𝗼𝗳𝗶𝘁𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗶𝘀 𝗸𝗲𝘆   The “growth at all costs” playbook is a thing of the past. Fintech unicorns are being pushed - by investors and the market - to show sustainable business models. Profitability (or a credible path to it) is now a baseline requirement. 𝟱.𝗧𝗵𝗲 𝗽𝗹𝗮𝘁𝗳𝗼𝗿𝗺 𝗽𝗹𝗮𝘆   Fintechs that started with a narrow focus - solving a specific pain point like onboarding, payouts, or FX - are now under pressure to broaden their scope. To reach and sustain unicorn status, they need to evolve into platforms: integrated, multi-service offerings that connect identity, payments, credit, and compliance. Scale now comes from depth, interoperability, and becoming indispensable across multiple touchpoints. 𝟲.𝗧𝗵𝗲 𝗨.𝗦. 𝗿𝗲𝗺𝗮𝗶𝗻𝘀 𝗺𝗮𝗿𝗸𝗲𝘁 𝗱𝗿𝗶𝘃𝗲𝗻 With no regulated Open Banking framework in place, U.S. fintechs scale by negotiating access rather than relying on standards. The model rewards speed and connections - but creates fragility. Moves like JPMorgan charging for data access show how quickly power can shift, making long-term innovation harder to sustain. 𝟳.𝗙𝗶𝗻𝘁𝗲𝗰𝗵𝘀 𝗹𝗲𝗮𝗱 𝗠&𝗔 Fintechs lead M&A probability rankings because they offer strategic utility at more grounded valuations. Their modular, API-driven models solve core problems banks and platforms would rather buy than build - making them ideal targets in a market shifting from hype to hard value. Opinions: my own, Graphic source: CB Insights 𝐒𝐮𝐛𝐬𝐜𝐫𝐢𝐛𝐞 𝐭𝐨 𝐦𝐲 𝐧𝐞𝐰𝐬𝐥𝐞𝐭𝐭𝐞𝐫: https://lnkd.in/dkqhnxdg

Re-Bundling the Bank 💡 Costs are growing for fintechs, but it's not just higher interest rates affecting their margins. Customer acquisition costs (CAC) are also on the rise and contributing to overhead. In response, some fintechs are seeking partners with existing customer bases. In June, for example, eBay and Venmo announced a partnership, allowing shoppers to pay for their purchases with their Venmo balance or methods linked to their Venmo account. Other fintechs, including big names like SoFi, have applied for bank charters. There is also a move to diversify revenue streams, illustrated by Robinhood’s reduced reliance on transaction fees for the bulk of its income. Both trends underscore a clear reality: As fintechs get squeezed, it is less viable for them to offer single, standalone products 💳 At the center of these moves is a focus on customer value. One effective way to reduce CAC is offering customers value on the financial side through products that help build savings or offer rewards. Another strategy is to add products to an existing customers base. Driven by their customers' growing expectations for digital solutions, Large Financial Institutions are increasingly partnering with, investing in and acquiring fintechs, leveraging the functionality and customer bases that fintechs have built in their specialized areas. Acquisitions such as JPMorganChase’s purchase of wePay for payments are one way for retail banks to add capabilities without building them in-house. At the same time, strategic partnerships can create efficiencies in customer acquisition. However, achieving a proper win-win in those relationships can be difficult to strike 🤝 Fintech partnerships are intended to be symbiotic, with tech companies like Chime providing a user-friendly front-end while a chartered partner bank such as The Bankcorp or Stride Bank, N.A. provides the FDIC-insured accounts and handles risk and compliance. This allowed fintechs to walk like a bank and talk like a bank while leaving the actual banking to someone else. In the last decade, deposits in fintech partner banks have skyrocketed, growing 9x faster than deposits in small US banks overall 🚀 Regulators are stepping up their oversight by issuing 50 severe enforcement actions in the last six months. A lopsided number of these actions are targeting partner banks. Startups are responding to the increased regulation by beefing up compliance talent and by reviewing existing processes, in some cases severing ties with partners. That opens the door to AI-native startups who can meet a high bar for regulation. Source: Silicon Valley Bank - https://t.ly/LfKVy     #Innovation #Fintech #Banking #OpenBanking #EmbeddedFinance #API #BaaS #FinancialServices #Payments #Lending #Blockchain #Compliance 

Fintech exits just hit a 3-year high. After a few years of wait-and-see, fintech's exit market is accelerating, and we’re going to have A LOT to talk about at Money20/20 in Vegas in three weeks. Q3'25 saw 249 M&A deals and 15 IPOs, three and four-year highs, respectively. But, those deals are sooooo Q3’25. What does fintech's exit recovery and the latest data signal about the technologies that will dominate the coming wave of exits, consolidation, and strategic priorities for investors and acquirers? ↳ Stablecoin infrastructure & payments rails: Banks, payment processors, and crypto natives are paying premiums for compliant on/off-ramps and settlement infrastructure as institutional adoption scales. ↳ AI-native fintech platforms: Five of Q3's top 10 funding deals went to AI-powered finance platforms. Acquirers know AI leaders will widen competitive gaps; expect strategic acquisitions before these companies even consider going public. ↳ Embedded finance & banking-as-a-service: As distribution becomes the moat, expect consolidation among BaaS providers and aggressive M&A from non-financial companies building financial products into their ecosystems. ↳ Wealth tech & digital asset custody: With 3 of the 5 fastest-growing fintech hiring markets in wealth tech, institutions are building or buying the infrastructure to serve retail and institutional demand for private markets and digital assets. Prep for Money20/20 by reading our co-produced State of Fintech Q3'25: https://lnkd.in/gEN5XyKt h/t for the awesome work on the report by Micky Tesfaye, Laura Kennedy, and Aisha Chandraker.

What's next in blockchain and fintech? Analyzing strategic hiring across leading fintech and blockchain companies unveils where the industry is headed. Using CB Insights data on job postings at Stripe, Circle, Ripple, Sardine, Chainalysis, Gemini, and Fireblocks, a clear pattern emerges. Security is non-negotiable Every company we analyzed has prioritized security infrastructure, with Gemini and Chainalysis leading the charge. Coinbase's recent $4M ransom payment following a credential compromise underscores this necessity. With institutional capital flowing into digital assets, security is an existential business priority. The institutional bridge is being built The data shows companies pivoting toward enterprise clients, with Ripple and Fireblocks explicitly focused on "bridging TradFi and DeFi." This isn't coincidental -- it's strategic recognition that institutional adoption represents the next growth frontier. Proactive regulatory engagement Circle and Fireblocks stand out with highest-level investment in compliance capabilities. Rather than reactively building to meet enforcement actions, forward-thinking players are constructing robust internal regulatory frameworks that anticipate oversight. From point solutions to platforms Core product expansion reflects industry maturation, with Stripe evolving beyond payments into comprehensive financial infrastructure and Ripple extending from cross-border payments into multi-chain stablecoins. Strategic acquisitions will further accelerate this evolution. Targeted AI deployment The selective but strategic integration of AI -- particularly at Sardine and Chainalysis -- demonstrates a focus on concrete applications rather than speculative use cases. These companies are applying machine learning precisely where it delivers measurable value in risk management and threat detection. The industry is rapidly professionalizing, building infrastructure that satisfies institutional requirements while maintaining blockchain's potential. For execs, analysts, and operators watching the space, the message is clear: the companies that build bridges to traditional finance while maintaining security will define the next chapter.

The New Wave of Fintech Bank Charter Applications Over the past 18 months, we’ve seen something remarkable: fintechs are no longer sitting at the edge of the financial system — they’re applying to become part of its core...Affirm, PayPal and others. There has been a surge in applications, with more fintech and non‑traditional players filing for bank charters in the last year than in the previous four combined. This includes digital lenders, payments platforms, and crypto‑adjacent firms. The momentum signals a strategic shift in how innovators think about scale, economics, and long‑term defensibility. Why now? Regulatory clarity is improving. After years of ambiguity, agencies are signaling openness to de novo charters — and fintechs are responding. Economics favor vertical integration. As customer bases grow, the cost and complexity of sponsor‑bank models are something CRO's consider. Access to deposits and the Fed matters. Especially in a world where liquidity, treasury management, and capital efficiency define competitive advantage. Partnership models have matured. The bigger story is what this means for the industry. We’re watching the early stages of a structural convergence between fintech and traditional banking. The lines are blurring: fintechs want the regulatory legitimacy and balance‑sheet power of banks, while banks increasingly want the innovation velocity and API‑native architecture of fintechs. The winners will be those who can combine both — responsibly. As someone who has spent years at the intersection of commercial payments, embedded finance, and bank–fintech partnerships, I see this moment as a catalyst. Not every fintech should pursue a charter, but every fintech should understand what this shift means for their strategy, economics, and regulatory posture. And for banks? This is an opportunity to think differently. The competitive landscape is changing — not because fintechs are disrupting from the outside, but because they’re stepping inside the regulatory perimeter with purpose‑built, digital‑first models. The next decade of financial services will be shaped by who can operate with the discipline of a bank and the agility of a fintech. The charter wave is just the beginning.

Fintechs are everywhere and it may be challenging to build a new one as category-kings have already emerged. In Nigeria, we already have clear kings like Moniepoint/ OPay/ PalmPay/ Kuda (POS, SME banking, etc), Interswitch (card network), Flutterwave (web payment), PiggyVest (saving), FairMoney (lending), Bitmama/ Changera (cross-border) and TAP (micropayments) controlling their domains. Unless you have a clear new basis of competition, it may be tough going after these companies frontally. So, if you cannot find another financial service niche to pioneer and dominate, a good playbook could be anchoring a business upon some of these companies. One of Nigeria’s finest agtech startups - Winich Farms - is a very big company which taps into the fintech world, but serving farmers and those in the broad agro-sector. Another is Cinderbuild which focuses on construction while also deploying typical fintech services from partners. I will tell you to go from the flank, and that means going into a sector and within that sector, you offer value to customers, even as you work on ways to embed fintech solutions on your products. My fintechnolization postulation remains that all digital platforms will offer a fintech solution. But it does not mean that you have to start a fintech product that collects online payment in Lagos today. Nigeria and indeed Africa are moving to the next phase of fintech evolution as the core operating system has been established. With this OS running, we can unlock opportunities in new sectors like agriculture, retail services, construction, etc across all nexus of financial services. Pursue those latent opportunities and do not waste time building another “fintech” solution.