What Does “Create The Future” Mean to Money20/20 USA

2025 is a year of rebirth for fintech and even redefining what the term “fintech” means now that the original fintech behemoths are set to graduate to the public markets. Digital Assets, Artificial Intelligence, and the overwhelming technological revolution unfolding in front of our eyes is forcing us to redefine the culture, regulation, and the future of fintech in a whole new way.

The worlds of Traditional Finance, Fintech, and ‘Digital Finance’ (or whatever your preferred buzzword) are finally working publicly and proudly together.

This is the inflection point.

The groundwork is nearly set. The Regulators have a remit of rational regulation and a seemingly mythical, long-awaited promise of “regulatory clarity,” is on the horizon. Or is it?

If there’s one thing to know about 2025, it’s that things - allllllll offff theeee thingsssssss - are subject to change at any given second. On a dime. On a whim. The winds of change are even overwhelmed. Yet a sense of calm is looming in the regulatory landscape.

This is the time to take a step back. This is the time not to rush or fast-follow out of fear of FOMO. As you and your firm take that step back, take the time to really dive deep. Ask the hard questions. What will change your business over the next twenty-five to fifty years and what technologies do you need to be learning about investing in, and testing today to make that a reality in the future.

Did someone say fintech spring?

A fintech spring is coming. The IPO road tours are happening, many are over, dates are loosely set. The sun isn’t just rising on fintech, it has risen. Fintech has worked for over a decade to establish itself as a trusted entity with real staying power, and folks, we did it!

A Fintech Spring doesn't just mean liquidity events at a massive and public scale. It means a new wave of ‘fintech startups’ that will look different than fintechs past, unexpected impactful innovation from the biggest banks on earth, and in our specific case, a tectonic shift in policy and regulation.

Accelerators are cropping back up at an early stage, the largest bank in the western world is partnering with one of Europe’s largest fintech darlings to provide BNPL to SMEs. as just one recent example.. It’s about startups, it’s about the banks and established players coming together, finally, it’s about the ecosystem coming back to life in a whole new way.

As the x-erati(?) - just go with it, who knows what to call that thing anymore - would say, “we’re so back!”

The competition will be fierce. As AI has burst onto the scene, the hype and competition in the sector have escalated in a way previously unseen in fintech markets.

They say history doesn’t repeat itself, but it rhymes. There may be analogies to draw, but the wave of technological change isn’t something these authors have seen in our lifetimes. It feels like fintech has gone Sci-Fi in its own way.

The “AI Revolution,” is an overused term, but it is the driver of the resurgence in VC investment. In 2024 there was a lot of "belt tightening,” but that has changed as AI has entered the fray (and most VC pitch decks). Suddenly, the VC community is active in ways reminiscent of fintech’s perceived top a few years back.

We say perceived because, well, this is just the beginning. This new wave of investment isn’t only hitting AI companies. It’s hitting fintech too and that doesn’t just mean fintech companies simply adding, “AI,” to their pitch decks and websites despite the earlier attempt at a joke, but real fintech innovation. There may be a lot of doubt and even more questions around how AI will impact financial services, but there’s no question that it will have a huge impact.

Will we see a new wave of innovative licensed digital banks in the US? A new wave of DeNovo banks doesn’t seem unlikely and what does that mean for the potential of the Industry at large in terms of competition and new business models?

To add to it all, many of the long-anticipated IPOs are expected to drop this year, and that in itself will create a butterfly effect of expectations and pressures.

As grandma always said, “the proof is in the pudding,” and we’ll see in earnings reports in years to come how that battle plays out between these big banks, the fintechs, and maybe we’ll even find out if we should be comparing them apples to apples as we tend to.

Bankers are running a race to keep pace with consumer expectations, providing great lending experiences while managing risk - often without the best software for the job at hand - AND continuing to innovate beyond just the front-end of consumer experience and design.

Alongside the most dynamic technological changes of our time, we’re living through similarly unprecedented Policy and Regulatory changes at subjectively breakneck speeds.

The policy world is volatile and full of possibilities. The promise of regulatory clarity or at least a lack of enforcement is clear. There may be more questions than answers, but if one were to go off vibes…some people are pretty giddy. The election has ushered in a cabinet very friendly to innovations in decentralized finance, and that is translating into refreshed interest in decentralized payments.

The regulatory aspect aside, many are still struggling on how to implement the tsunami of potentially world-changing technologies that have come to market in the last year.

Strap in, folks. If uncertainty provides opportunity, then a monsoon of opportunity is coming. Is it possible there’s a medium-to-long-term downside to the opportunity monsoon? You tell us, but please avoid the monsoon metaphor, it’s really played out now.

[There was initially a paragraph here about the impact of the CFPB, but at time of writing…well, things change fast] So, anyway, open banking and consumer protection, we’ll see. It looks like the power is shifting to the States.

The new wave of changes industry-wide has created a 2019-esque energy in the world of fintech.

Last year the sentiment was that entrepreneurs and product teams should be building because a fintech spring was coming. This year, entrepreneurs and product teams are building because the fintech spring is here!

There is an expectation that open finance will incentivize the shrinking of the banking ecosystem, with mergers and acquisitions on the horizon. “Acquire or be acquired,” is becoming a relevant conversation in the mainstream of banking again.

Tokenization and stablecoins are the talk of the town and the industry consensus is that they will in fact change the entire nature of future technology stacks. Questions remain. How fast will adoption be, and how will that change the nature of the condensing of the banking market?

From Stablecoins to The Tradiest of. banks must take this opportunity to lean into their core businesses as these fintechs enter the fray. It’s time to look to the centers of profitability and double down. Wealth Management, Small Business Banking, and the few areas that fintech has struggled to penetrate.

This will be the year that we see the AI Projects inside banking come to life and a plethora of partnerships announced. In a different vein of partnerships, we will see a reset and a redefining of banking–as-a-service, embedded finance, whatever you want to call it.

Then there’s payments, specifically. As AI is employed in payments and is married to the cloud, the creation of true digital identity solutions becomes even more vital. Now layer that with open finance’s promise of a data mobility centric future and AI is seen as an agent to truly address underwriting. The ability for financial institutions to enhance their lending practice, leveraging AI or whatever the technology may be, will be another aspect to doubling down on the revenue centers mentioned earlier.

Major tech companies are already implementing AI into products, surrounding the human experience with augmented capabilities. The data needs are going to demand major energy investments, and opportunities to enhance those opportunities could play a part in the future of wealth creation.

Looking to the further future, advancements in quantum computing could change the game in all digital infrastructure, especially payments and identity.

Fintech is an industry that shifted and grew dramatically in a world that was experiencing chaos and faltering on the edge of another Great Depression. The creative forces and entrepreneurial imagination that created a completely new way of looking at money is now being called upon to continue that journey, facing a new generation of chaos, and supply secure and safe commerce.

Excuse my French, but payments are sexy again. Yeah, I said it. Why? A once almost completely commoditized sector focused on pennies of margin and volume deals is undergoing a technological reawakening. The race is on! Interoperability across borders, tokenization taking over, and payments moving in real-time have fired the payments race starting gun! It may be a race, but there won’t be one winner and it’s not all about competition. Coopetition will see its moment in the sun and partnerships will thrive across companies, borders, and industries. Fintech was built on partnerships and the next wave will be too.

This race is global and multifaceted. Let’s call a spade a spade (as long as the show in Vegas, after all) and admit that the speed of innovation of payments technologies has been faster outside of the US, especially in the Global South. Brazil’s Pix continues to build and expand, extending beyond borders in other Latam geographies with much more in-store across the globe. That’s just one example of thousands around the world.

This leg of the payments race powered by novel technologies will be as dynamic and ever changing as the technologies themselves. Other portions of the world may be running ahead, but the combination of AI, Digital Asset Infrastructure, and a friendly regulatory environment spells only good things for the US payments world.

As the technology and regulators tango on the right answer for global payments, Superapps are becoming a primary driver for banks and payments in Latam. The same cannot be said about the US market. The attempts at SuperApps have struggled, but with X entering the gateway to payments, we may see the first superapp to truly rule in North America. Or will we?

You tell us how you see the global payments race playing out.

The factors driving the multi-faceted macroeconomic system we live in are impossible to unpack. To say we live in a unique time is an understatement. Turning on the finance news is starting to feel like an episode of Real Housewives, America’s Billionaires Edition.

It doesn’t just seem fast-paced and hectic. It is exactly that, but as stated earlier with significant uncertainty comes significant opportunities in fintech and beyond. The Stargate announcement in the US is pushing other World Powers to follow fast.

Trust has and always will be the number one priority, problem, and building block of the financial system. Maintaining trust in our financial ecosystem is paramount as trust in political systems dwindles, a global scamdemic is defrauding average consumers for billions, and uncertainty seemingly looms all around us.

How do we build and maintain trust? Yes, brand equity, strong financials, all those things play a role, but the next wave of trust injected into our system may not even be noticed by the average consumer.

The next wave of trust is actually all about infrastructure.

First, let’s define infrastructure. In years past, we’d be talking about multi-cloud core implementations, settlement solutions, and automated OFAC check systems. Those days are over. When you hear speak of, “infrastructure,” we’re mostly talking about Real-Time-Fraud solutions, AI, Biometrics, and the plethora of the cutting edge technologies entering the fintech fray today.

As payments move in real time, the implications of fraud change dramatically. If money moves faster then fraud will do the same. Rigorous protections from a policy and technology perspective are non-negotiable, but what are the best practices? You tell us.

In obfuscating the complexity of these issues from the consumer, the goal is simply to create a seamless, simple, maybe even delightful experience for that consumer. As we dive into the technicalities, let’s not forget the real reason these technologies are being adopted and why we’re investing our lives in this version of the future.

In some cases, it will be the opposite, the consumer will actually have more interaction when it comes to their interaction with and ownership of their own data. As consumers gain more control over their data, how do we look at data management and identity protection? This will continue to be a discussion as these developments enhance and shift the possibilities for KYC and the portability thereof. Will FI’s look to be stewards of data storage, and will this become an additional client service? The questions abound yet again.

If you disagree, tell us! We want your side of the story.

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