Here’s what’s hot — and what’s not — in fintech right now
Fintech executives descend on Amsterdam for the annual Money2020 conference.
MacKenzie Sigalos
AMSTERDAM, Netherlands — At last year’s Money 20/20 — Europe’s marquee event for the financial technology industry — investors and industry insiders were abuzz with talk about embedded finance, open banking, and banking-as-a-service.
As nebulous as these terms may be, they reflected a very real push from tech startups, including the biggest names in the business such as Stripe and Starling Bank, to allow businesses of all stripes to develop their own financial services, or integrate other firms’ products into their platforms.
This year, with fintechs and their mainly venture capital and private-equity backers reeling from a dire slump in technology valuations and softer consumer spending, the narrative around what’s “hot” in fintech hasn’t changed an awful lot.
Investors still love companies offering services to enterprises rather than consumers. In some cases, they’ve been willing to write checks for firms at valuations unchanged from their last funding round. But there are a few key differences — not least the thing of curiosity that is generative artificial intelligence.
So what’s hot in fintech right now? And what’s not? CNBC spoke to some of the top industry insiders at Money 20/20 in Amsterdam. Here’s what they had to say.
What’s hot?
Looking around Money 20/20 this week, it was easy to see a clear trend going on. Business-facing or business-to-business companies like Airwallex, Payoneer, and ClearBank, dominated the show floor, while consumer apps such as Revolut, Starling, and N26 were nowhere to be found.
“I think many fintechs have pivoted to enterprise sales having found consumer hard to make sufficient unit economics — plus it’s pretty expensive to get a stand and attend M2020 so you need to be selling to other attendees to justify the outlay,” Richard Davies, CEO of U.K. startup lender Allica Bank, told CNBC.
“B2B is definitely in good shape — both SME and enterprise SaaS [software-as-a-service] — providing you can demonstrate your products and services, have proven customer demand, and good unit economics. Embedded finance certainly is part of this and has a long way to run as it is in its infancy in most cases,” Davies said.
B2B fintechs are startups that develop digital financial products tailored to businesses. SaaS is software that tech firms sell to their customers as a subscription. Embedded finance refers to the idea of third-party financial services like bank accounts, brokerage accounts and insurance policies being integrated into other businesses’ platforms.
Niklas Guske, who runs operations at Taktile — a fintech start-up focused on streamlining underwriting decisions for enterprise clients — describes the sector as being in the middle of a renaissance for B2B payments and financing.
“There is a huge opportunity to take lessons from B2C fintechs to uplevel the B2B user experience and deliver far better solutions for customers,” said Guske. “This is particularly true in SME finance, which is traditionally underserved because it has historically been difficult to accurately assess the performance of younger or smaller companies.”
One area fintech companies are getting excited by is an improvement to online checkout tools. Payments technology company Stripe, for instance, says a newer version of its checkout surfaces has helped customers increase revenue by 10.5%.
“That is kind of incredible,” David Singleton, chief technology officer of Stripe, told CNBC. “There are not a lot of things you can do in a business that increase your revenue by 10%.”
Meanwhile, companies tightening their belts at the event is also a theme.
One employee of a major firm that usually attends the event said they have cut down on the number of people they have sent to Money 20/20 and have not even bought a stand. The employee was not authorized to speak to the media.
Indeed, as companies look to scale as they cut back on spending, many say a key priority is adequately managing risk.
“When funds were readily available, many fintechs could subsidize poor risk assessments with investor money,” Guske said of the sector, adding that in today’s climate, fintechs are only profitable if they can identify and secure the right customers.
“This is another moment where the proliferation of new data sources and the adoption of sophisticated risk modeling enables fintechs to better target their ideal customers better than ever before,” said Guske, who raised more than $24 million from the likes of Y Combinator and Tiger Global.
Generative AI
The main area that drew the most hype from Money 20/20 attendees, however, was artificial intelligence.
That’s as ChatGPT, the popular generative AI software from OpenAI which produces human-like responses to user queries, dazzled fintech and banking leaders looking to understand its potential.
In a closed-door session on the application of fintech in AI Wednesday, one startup boss pitched how they’re using the technology to be more creative in communications with their customers by incorporating memes into the chat function and allowing its chatbot, Cleo, to “roast” users about poor spending decisions.
Callan Carvey, global head of operations at Cleo, said the firm’s AI connects to a customer’s bank account to get a better understanding of their financial behavior.
“It powers our transaction understanding and that deeply personalized financial advice,” Carvey said during her talk. “It also allows us to leverage AI and have predictive measures to help you avoid future financial mistakes,” such as avoiding punchy bank fees you could otherwise avoid.
Teo Blidarus, CEO and co-founder of financial infrastructure firm FintechOS, said generative AI has been a boon to platforms like his, where companies can build their own financial services with little technical experience.
“AI, and particularly generative AI, it’s a big enabler for fintech enablement infrastructure, because if you’re looking at what are the barriers that low code, no code on one side and generative AI on the other are trying to solve if the complexity of the overall infrastructure,” he told CNBC.
“A job that typically would take around one or two weeks can now be completed in 30 minutes, right. Granted, you still need to polish it a little bit, but fundamentally I think it allows you know to spend your time on more productive stuff — creative stuff, rather than integration work.”
As businesses hyper-focus on how they can do more with less, both tech-forward and traditional businesses say they have been turning to revenue and finance automation products that handle back-office operations to try to optimize efficiency.
Indeed, Taktile’s Guske notes that the current demand to continue scaling rapidly while simultaneously reducing costs has driven many fintechs to reduce operational expenses and improve efficiency through an increase in automation and reducing manual processes, especially in onboarding and underwriting.
“I see the biggest, actual application of generative AI in using it to create signals out of raw transaction or accounting data,” said Guske.
What’s not?
One thing’s for sure: consumer-oriented services aren’t the ones getting the love from investors.
This year has seen major digital banking groups and payment groups suffer steep drops in their valuations as shareholders reevaluated their business models in the face of climbing inflation and higher interest rates.
Revolut, the British foreign exchange services giant, had its valuation cut by shareholder Schroders Capital by 46%, implying a $15 billion markdown in its valuation from $33 billion, according to a filing. Atom Bank, a U.K. challenger bank, had its valuation marked down 31% by Schroders.
It comes as investment into European tech startups is on track to fall another 39% this year, from $83 billion in 2022 to $51 billion in 2023, according to venture capital firm Atomico.
“No one comes to these events to open like a new bank account, right?” Hiroki Takeuchi, CEO of GoCardless, told CNBC. “So if I’m Revolut, or something like that, then I’m much more focused on how I get my customers and how I make them happy. How do I get more of them? How do I grow them?”
“I don’t think Money 20/20 really helps with that. So that doesn’t surprise me that there’s more of a shift towards B2B stuff,” said Takeuchi.
Layoffs have also been a massive source of pain for the industry, with Zepz, the U.K. money transfer firm, cutting 26% of its workforce last month.
Even once richly valued business-focused fintechs have suffered, with Stripe announcing a $6.5 billion fundraise at a $50 billion valuation — a 50% discount to its last round — and Checkout.com experiencing a 15% drop in its internal valuation to $9 billion, according to startup news site Sifted.
Fintechs cooling on crypto
It comes after a turbulent year for the crypto industry which has seen failed projects and companies go bankrupt — likely a big part of why few crypto firms made an appearance in Amsterdam this year.
During the height of the most recent bull run, digital asset companies and know-your-customer providers dominated a lot of the Money 20/20 expo hall, but conference organizers tell CNBC that just 6% of revenue came from companies with a crypto affiliation.
Plunging liquidity in the crypto market, paired with a regulatory crackdown in the U.S. on firms and banks doing business with the crypto sector, have altered the value proposition for investing in digital asset integrations. Several fintech executives CNBC interviewed spoke of how they’re not interested in launching products tailored to crypto as the demand from their customers isn’t there.
Airwallex, a cross-border payments start-up, partners with banks and is regulated in various countries. Jack Zhang, the CEO of Airwallex, said the company will not be introducing support for cryptocurrencies in the near future, especially with the regulatory uncertainty.
“It’s very important for us to maintain the high standard of compliance and regulation … it is a real challenge right now to deal with crypto, especially with these global banks,” Zhang told CNBC in an interview on Tuesday.
Prajit Nanu, CEO of Nium, a fintech company that has a product that allows financial institutions to support cryptocurrencies, said interest in that service has “fallen off.”
“Banks who we power today have become very skeptical about crypto … as we see the overall ecosystem going through this … difficult time … we are looking at it much more carefully than what we would have looked at last year,” Nanu told CNBC in an interview Tuesday.
Blockchain is also no longer the buzzword it once was in fintech.
A few years ago, the trendy thing to talk about was blockchain technology. Big banks used to say that they weren’t keen on the cryptocurrency bitcoin but instead were optimistic about the underlying tech known as blockchain.
Banks praised the way the ledger technology could improve efficiency. But blockchain has barely been mentioned at Money 20/20.
One exception was JPMorgan, which is continuing to develop blockchain applications with its Onyx arm. Onyx uses the technology to create new products, platforms and marketplaces — including the bank’s JPM Coin, which it uses to transfer funds between some of its institutional clients.
However, Basak Toprak, executive director of EMEA and head of coin systems at JPMorgan, gave attendees a reality check about how limited practical use of the technology is in banking at the moment.
“I think we’ve seen a lot of POCs, proof of concepts, which are great at doing what it says on the tin, proving the concept. But I think, what we need to do is make sure we create commercially viable products for solving specific problems, sustain customer confidence, solving issues, and then launching a product or a way of doing things that is commercially viable, and working with the regulators.”
“Sometimes I think the role of the regulators is also quite important for industry as well.”
Jakub Porzycki | Nurphoto | Getty Images
Mark Zuckerberg’s announcement this week that Meta would pivot its moderation policies to allow more “free expression” was widely viewed as the company’s latest effort to appease President-elect Donald Trump.
More than any of its Silicon Valley peers, Meta has taken numerous public steps to make amends with Trump since his election victory in November.
That follows a highly contentious four years between the two during Trump’s first term in office, which ended with Facebook — similar to other social media companies — banning Trump from its platform.
As recently as March, Trump was using his preferred nickname of “Zuckerschmuck” when talking about Meta’s CEO and declaring that Facebook was an “enemy of the people.”
With Meta now positioning itself to be a key player in artificial intelligence, Zuckerberg recognizes the need for White House support as his company builds data centers and pursues policies that will allow it to fulfill its lofty ambitions, according to people familiar with the company’s plans who asked not to be named because they weren’t authorized to speak on the matter.
“Even though Facebook is as powerful as it is, it still had to bend the knee to Trump,” said Brian Boland, a former Facebook vice president, who left the company in 2020.
Meta declined to comment for this article.
In Tuesday’s announcement, Zuckerberg said Meta will end third-party fact-checking, remove restrictions on topics such as immigration and gender identity and bring political content back to users’ feeds. Zuckerberg pitched the sweeping policy changes as key to stabilizing Meta’s content-moderation apparatus, which he said had “reached a point where it’s just too many mistakes and too much censorship.”
The policy change was the latest strategic shift Meta has taken to buddy up with Trump and Republicans since Election Day.
A day earlier, Meta announced that UFC CEO Dana White, a longtime Trump friend, is joining the company’s board.
And last week, Meta announced that it was replacing Nick Clegg, its president of global affairs, with Joel Kaplan, who had been the company’s policy vice president. Clegg previously had a career in British politics with the Liberal Democrats party, including as a deputy prime minister, while Kaplan was a White House deputy chief of staff under former President George W. Bush.
Kaplan, who joined Meta in 2011 when it was still known as Facebook, has longstanding ties to the Republican Party and once worked as a law clerk for the late conservative Supreme Court Justice Antonin Scalia. In December, Kaplan posted photos on Facebook of himself with Vice President-elect JD Vance and Trump during their visit to the New York Stock Exchange.
Joel Kaplan, Facebook’s vice president of global policy, on April 17, 2018.
Niall Carson | PA Images | Getty Images
Many Meta employees criticized the policy change internally, with some saying the company is absolving itself of its responsibility to create a safe platform. Current and former employees also expressed concern that marginalized communities could face more online abuse due to the new policy, which is set to take effect over the coming weeks.
Despite the backlash from employees, people familiar with the company’s thinking said Meta is more willing to make these kinds of moves after laying off 21,000 employees, or nearly a quarter of its workforce, in 2022 and 2023.
Those cuts affected much of Meta’s civic integrity and trust and safety teams. The civic integrity group was the closest thing the company had to a white-collar union, with members willing to push back against certain policy decisions, former employees said. Since the job cuts, Zuckerberg faces less friction when making broad policy changes, the people said.
Zuckerberg’s overtures to Trump began in the months leading up to the election.
Following the first assassination attempt on Trump in July, Zuckerberg called the photo of Trump raising his fist with blood running down his face “one of the most badass things I’ve ever seen in my life.”
A month later, Zuckerberg penned a letter to the House Judiciary Committee alleging that the Biden administration had pressured Meta’s teams to censor certain Covid-19 content.
“I believe the government pressure was wrong, and I regret that we were not more outspoken about it,” he wrote.
After Trump’s presidential victory, Zuckerberg joined several other technology executives who visited the president-elect’s Mar-a-Lago resort in Florida. Meta also donated $1 million to Trump’s inaugural fund.
On Friday, Meta revealed to its workforce in a memo obtained by CNBC that it intends to shutter several internal programs related to diversity and inclusion in its hiring process, representing another Trump-friendly move.
The previous day, some details of the company’s new relaxed content-moderation guidelines were published by the news site The Intercept, showing the kind of offensive rhetoric that Meta’s new policy would now allow, including statements such as “Migrants are no better than vomit” and “I bet Jorge’s the one who stole my backpack after track practice today. Immigrants are all thieves.”
Recalibrating for Trump
Zuckerberg, who has been dragged to Washington eight times to testify before congressional committees during the last two administrations, wants to be perceived as someone who can work with Trump and the Republican Party, people familiar with the matter said.
Though Meta’s content-policy updates caught many of its employees and fact-checking partners by surprise, a small group of executives were formulating the plans in the aftermath of the U.S. election results. By New Year’s Day, leadership began planning the public announcements of its policy change, the people said.
Meta typically undergoes major “recalibrations” after prominent U.S. elections, said Katie Harbath, a former Facebook policy director and CEO of tech consulting firm Anchor Change. When the country undergoes a change in power, Meta adjusts its policies to best suit its business and reputational needs based on the political landscape, Harbath said.
“In 2028, they’ll recalibrate again,” she said.
After the 2016 election and Trump’s first victory, for example, Zuckerberg toured the U.S. to meet people in states he hadn’t previously visited. He published a 6,000-word manifesto emphasizing the need for Facebook to build more community.
The social media company faced harsh criticism about fake news and Russian election interference on its platforms after the 2016 election.
Following the 2020 election, during the heart of the pandemic, Meta took a harder stand on Covid-19 content, with a policy executive saying in 2021 that the “amount of COVID-19 vaccine misinformation that violates our policies is too much by our standards.” Those efforts may have appeased the Biden administration, but it drew the ire of Republicans.
Meta is once again reacting to the moment, Harbath said.
“There wasn’t a business risk here in Silicon Valley to be more right-leaning,” Harbath said.
While Trump has offered few specific policy proposals for his second administration, Meta has plenty at stake.
The White House could create more relaxed AI regulations compared with those in the European Union, where Meta says harsh restrictions have resulted in the company not releasing some of its more advanced AI technologies. Meta, like other tech giants, also needs more massive data centers and cutting-edge computer chips to help train and run their advanced AI models.
“There’s a business benefit to having Republicans win, because they are traditionally less regulatory,” Harbath said.
Meta’s CEO Mark Zuckerberg reacts as he testifies during the Senate Judiciary Committee hearing on online child sexual exploitation at the U.S. Capitol in Washington, U.S., January 31, 2024.
Evelyn Hockstein | Reuters
Meta isn’t alone in trying to cozy up to Trump. But the extreme measures the company is taking reflects a particular level of animus expressed by Trump over the years.
Trump has accused Meta of censorship and has expressed resentment over the company’s two-year suspension of his Facebook and Instagram accounts following the Jan. 6 attack on the Capitol.
In July 2024, Trump posted on Truth Social that he intended to “pursue Election Fraudsters at levels never seen before, and they will be sent to prison for long periods of time,” adding “ZUCKERBUCKS, be careful!” Trump reiterated that statement in his book, “Save America,” writing that Zuckerberg plotted against him during the 2020 election and that the Meta CEO would “spend the rest of his life in prison” if it happened again.
Meta spends $14 million annually on providing personal security for Zuckerberg and his family, according to the company’s 2024 proxy statement. As part of that security, the company analyzes any threats or perceived threats against its CEO, according to a person familiar with the matter. Those threats are cataloged, analyzed and dissected by Meta’s multitude of security teams.
After Trump’s comments, Meta’s security teams analyzed how Trump could weaponize the Justice Department and the country’s intelligence agencies against Zuckerberg and what it would cost the company to defend its CEO against a sitting president, said the person, who asked not to be named because of confidentiality.
Meta’s efforts to appease the incoming president bring their own risks.
After Zuckerberg announced the new speech policy Tuesday, Boland, the former executive, was among a number of users who took to Meta’s Threads service to tell their followers that they were quitting Facebook.
“Last post before deleting,” Boland wrote in his post.
Before the post could be seen by any of his Threads followers, Meta’s content moderation system had taken it down, citing cybersecurity reasons.
Boland told CNBC in an interview that he couldn’t help but chuckle at the situation.
“It’s deeply ironic,” Boland said.
— CNBC’s Salvador Rodriguez contributed to this report.
WATCH: Meta is returning to free speech tradition, says Facebook’s former chief privacy officer Chris Kelly
Jaap Arriens | Nurphoto | Getty Images
Apple is losing market share in China due to declining iPhone shipments, supply chain analyst Ming-Chi Kuo wrote in a report on Friday. The stock slid 2.4%.
“Apple has adopted a cautious stance when discussing 2025 iPhone production plans with key suppliers,” Kuo, an analyst at TF Securities, wrote in the post. He added that despite the expected launch of the new iPhone SE 4, shipments are expected to decline 6% year over year for the first half of 2025.
Kuo expects Apple’s market share to continue to slide, as two of the coming iPhones are so thin that they likely will only support eSIM, which the Chinese market currently does not promote.
“These two models could face shipping momentum challenges unless their design is modified,” he wrote.
Kuo wrote that in December, overall smartphone shipments in China were flat from a year earlier, but iPhone shipments dropped 10% to 12%.
There is also “no evidence” that Apple Intelligence, the company’s on-device artificial intelligence offering, is driving hardware upgrades or services revenue, according to Kuo. He wrote that the feature “has not boosted iPhone replacement demand,” according to a supply chain survey he conducted, and added that in his view, the feature’s appeal “has significantly declined compared to cloud-based AI services, which have advanced rapidly in subsequent months.”
Apple’s estimated iPhone shipments total about 220 million units for 2024 and between about 220 million and 225 million for this year, Kuo wrote. That is “below the market consensus of 240 million or more,” he wrote.
Apple did not immediately respond to CNBC’s request for comment.
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