Fintech, once the 'enfant terrible' of finance, is growing up

• Key insight: The narrative of fintechs as dramatic disrupters of traditional finance is wearing thin as more and more established fintechs have discovered the value of respectability.
• Supporting data: In 2025, according to recent analysis by McKinsey and QED, the U.S. Office of the Comptroller of the Currency received 21 applications for new bank charters with a 40% decrease in average approval time.
• Forward look: Fintechs are becoming banks. But some of the largest banks are also becoming more like fintechs: investing in technology, improving customer experience and rethinking legacy products.

For years, fintech played an irresistibly dramatic role in the story of modern finance: the enfant terrible. Fintechs disrupted banks, exploited regulatory gray zones and dared incumbents to keep up. That adversarial framing — insurgents versus establishment, innovation versus regulation, fintechs versus banks — became the default narrative. It was not entirely wrong. But it was always a simplification. And new data suggests it is becoming obsolete.

The most telling sign of the shift is this: Fintechs are lining up to become banks. In 2025 alone, according to recent analysis by McKinsey and QED, the United States' Office of the Comptroller of the Currency received 21 applications for new bank charters — more than the prior four years combined — with a 40% decrease in average approval time. These newly minted banks are not scrappy startups looking for legitimacy. They include Nubank, PayPal, Circle, Revolut and Monzo — established, scaled businesses that have spent years operating outside the traditional banking perimeter and are now choosing to enter it.

There are practical reasons for this. A banking charter unlocks cheaper deposit funding. It enables product expansion into mortgages, lending and asset custody. It allows fintechs to own the full value chain rather than renting it from sponsor banks. It builds the kind of institutional credibility that converts customers who might otherwise hesitate. For the most ambitious players, a full charter is the foundation for becoming a customer's primary financial relationship — with the benefits that come with it. What's more, chartered fintechs are realizing they can use regulation as a moat to create competitive distance with newer, lighter-touch competitors. The enfant terrible has discovered the value of respectability, and deemed it to be worth the cost.

This shift could benefit consumers. It means more competition in markets — mortgages, small-business lending, deposits — where digitally native, well-capitalized institutions have historically been absent. Revolut's new U.K. banking license, for example, positions it to enter the £2 trillion U.K. mortgage market.

For the financial system more broadly, fintechs voluntarily entering the regulatory perimeter is a signal that the system is adapting. The largest fintechs are betting their long-term future on legitimacy and trust, not on exploiting the gaps that slower-moving regulators have yet to close.

The charter trend is the most visible sign of maturity, but it is not the only one. For the first time, respondents to McKinsey's 2025 Retail Banking Survey said they trust fintechs more than traditional banks. Trust isn't earned through flashy apps; it is built over years of reliable service, transparent pricing and demonstrated stability.

JPMorgan Chase

Even JPMorgan Payments feels pressure to compete with fintechs

JPMorgan Payments processes about $12 trillion in payments per day globally. It is also the largest credit card issuer and merchant acquirer in the country. But to stay on top, the banking behemoth has made it its business to work with, and think like, nimbler fintechs.

By Joey Pizzolato

May 26

Meanwhile, the economics of the sector have grown up too. The fintech industry has moved through two distinct phases: an early era in which growth alone was rewarded, and a subsequent correction in which profitability became paramount. The new equilibrium demands both simultaneously. Growth equity's share of fintech investment has fallen from 45% in 2019 to 25% today. The listed fintech market cap stands at a record $850 billion — a figure that reflects investor confidence that the fintechs left standing have earned their valuations. Already, Nubank is valued at a similar forward multiple as leading incumbents.

Perhaps the most telling sign of the sector's maturation is the fastest-growing category within it: fintechs that have stopped competing with banks altogether and started selling them the tools to modernize. These firms — which do everything from automate compliance checks to streamline identity verification — now represent 13% of overall fintech revenue and are growing 25% faster than fintechs that compete head-to-head with incumbents. Finance's enfant terrible has, in many cases, become the industry's preferred modernization partner.

What does this mean for the two sides of the old divide? For fintechs, the advantages that defined the insurgent era are eroding. Regulatory arbitrage is closing. Growth-at-all-costs capital is drying up. AI is democratizing software development; features built over five years can be replicated in six months by financial institutions and disrupters alike. The durable advantages now are those associated with maturity: trusted distribution, regulatory credibility, and proven unit economics — and, for the most efficient operators, a cost structure that legacy institutions still cannot match. Türkiye's Midas, for example, uses AI to bring wealth advice to customers who can't afford a human professional.

For banks, the picture is more complicated. The firms competing with them are no longer lightly regulated novelties. They have licenses, balance sheets, and hard-won customer relationships: brands and customer bases that have taken years to build and cannot be quickly replicated. The tools available to fight back are increasingly being built and sold by fintechs themselves. But the window to use them is narrowing. Banks that move fast will find their advantages compounding; those that don't will find themselves picked apart, product by product, by those who did.

The fintechs-versus-banks narrative was always more useful as shorthand than as analysis. Even during the most disruptive years of fintech's rise, the relationship was nuanced. And the reality that is emerging now is messier, more competitive and considerably more interesting. Fintechs are becoming banks. But some of the largest banks are also becoming more like fintechs: investing in technology, improving customer experience and rethinking legacy products. JPMorganChase spent nearly $18 billion on technology in 2025 alone. Visa has acquired or invested in more than 50 fintechs over the past five years. And the biggest beneficiaries of these changes are customers.

The enfant terrible, it turns out, was always going to grow up. What wasn't as predictable, perhaps, was that they would inspire some of our oldest institutions to rediscover some youthful vigor.