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In 2025, the fintech landscape is expected to undergo significant evolution, marked by technological innovation and shifting priorities.
In the inaugural episode of Everything is Fintech, members of the Money20/20 global content team shared insights into the trends shaping the industry this year.
These experts anticipate the emergence of embedded finance 2.0 as outdated models collapse. Additionally, 2025 is expected to be a breakout year for wealthtech, with innovations in blockchain and tokenization enhancing financial access and efficiency.
Finally, there will be a notable shift in Asia’s startup ecosystem, with profitability and sustainability taking center stage over growth at all costs. This trend will be fueled by selective venture capital (VC) investment and substantial commitments from tech giants to infrastructure and generative artificial intelligence (genAI), signaling a resurgence for the region’s tech ecosystem.
Banks move towards embedded finance
Scarlett Sieber, Chief Strategy and Growth Officer, believes that banks will steadily move toward adopting embedded finance in 2025.
While she initially expected big banks to make significant leaps in this area, the changes observed in 2024 were more incremental than transformative. This year, banks will continue to make progress, though these advancements will remain gradual.
Sieber envisions this period as laying the groundwork for a more substantial transformation in the future, rather than delivering immediate, game-changing shifts.
Embedded finance 2.0
Micky Tesfaye, Content Lead, Europe, asserts that the first iteration of embedded finance has failed, citing the implosion of companies like Synapse and Evolve. These collapses show that business models reliant on renting banking licenses are unsustainable, offering minimal value and operating on slim margins.
Micky Tesfaye
“It’s the end of embedded finance 1.0. For resilient systems to be reborn right, we have to realize some of the ugly truths exposed by what happened,”
Tesfaye said.
“The reality is that modified infrastructure with poor value propositions, along with merely renting bank licenses, is no longer going to transform financial services.”
Tesfaye also criticized open banking, noting that despite being touted as a revolution for years, it’s delivered little more than gradual evolution, with limited disruption.
However, he highlighted promising developments in the US, particularly the Section 1033 rule, which is driving new promises for open finance that integrate payments, investments, and insurance. This shift, alongside advancements in AI, is paving the way for embedded finance 2.0.
“[Open banking is] about commoditized data; embedded finance is commoditized infrastructure,” Tesfaye said.
“When you combine those with AI I think that might create embedded finance 2.0, or the start of that where money is truly embedded, intelligence and predictive.”
In 2025, Tesfaye envisions financial services becoming smarter and more adaptive, driven by AI agents managing cash flow, overdrafts, and transactions.
A breakthrough year for wealthtech
Ian Horne, Head of Content, Europe, expects 2025 to be a breakthrough year for wealthtech, particularly in the direct-to-consumer (D2C) space. He emphasized the influence of AI, open banking and increased competition to reshape client engagement and improve financial access.
This trend is being fueled by neobanks like Revolut expanding into investments and cryptocurrency, reflecting increasing customer demand and exposing gaps in traditional banking services.
Ian Horne
“AI should allow banks and intermediaries to respond to clients’ needs, and open banking can add transparency too,”
Horne said.
“The other thing with AI and data, is the chance for banks to [address] underserved people. I think in the UK, it used to be about 7% of people getting financial advice, no one else did. A large part of that was because banks moved out of the space because regulation made it too expensive to serve those customers. I now think with the technology we’ve got and the way that things are moving, we can offer better services for more people.”
Horne also highlighted the potential of blockchain and tokenization, emphasizing that tokenized bond funds are demonstrating early success. While the broader tokenization of assets may take longer to materialize, he foresees significant developments in making money more agile and assets more accessible in 2025.
“In the tokenization space, … we’re starting to see real estate move onto the blockchain,” Horne said.
“It’s quite nascent but it will come and people are trying to do all sorts of things, especially with alternative investments such as gold and wine. As people experiment with it, we will see more and more things become accessible, first to institutions but then, also to individual investors.”
A resurgence for Asian startups
Sheryl Chen, Head of Content, Asia, predicts a shift in the Asian startup scene, with a growing emphasis on sustainability and profitability over the pursuit of unicorn status.
This will emerge as VCs become more selective, demanding solid unit economics and clear paths to profitability. Simultaneously, tech giants including Nvidia, Amazon, Google and Microsoft, will continue to make significant investment in the region, bolstering its tech sector’s bullish outlook.
Sheryl Chen
“We are seeing a couple of huge tech investments in the region, particularly in data centers,”
Chen said.
“GenAI is driving demand for more chips and GPUs, fueling investments in infrastructure and talent across the region.”
Chen believes that with these changes, 2025 could mark a resurgence for Asian startups, provided they can prove their value beyond flashy presentation and achieve financial sustainability.
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