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.”
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Cameron Pappas, owner of Norton’s Florist
Norton’s
For Cameron Pappas, owner of Norton’s Florist in Birmingham, Alabama, the artificial intelligence boom is a world away.
While companies like Nvidia, Alphabet and Broadcom are lifting the stock market to fresh highs and bolstering GDP, Pappas is experiencing what’s happening in the real economy, one that’s far removed from Wall Street and Silicon Valley.
Small businesses like Norton’s, and companies of all sizes in retail, construction and hospitality, are struggling from higher costs brought by the Trump administration’s sweeping tariffs, and as downbeat consumers reduce their spending.
“We’ve just got an eagle eye on all of our costs,” Pappas, 36, told CNBC in an interview.
Norton’s generated $4 million in revenue last year, selling flowers, plants and gifts to locals. To avoid raising prices, which could cause customers to flee, Pappas has been forced to get creative, reworking some of his designs.
“If a bouquet has 25 stems in it, if you reduce that by three to four stems, then you’re able to keep the price the same,” Pappas said. “It’s really forced us to focus on that and to make sure that we’re pricing things the best that we possibly can.”
Pappas’ story and many like it are being masked in the macro data by the power of AI. In the first half of the year, AI-related capital expenditures contributed to 1.1% of GDP growth, according to a September report from JPMorgan Chase. That spending outpaced the U.S. consumer “as an engine of expansion,” the report said.
Total U.S. GDP increased at an annual rate of 3.8% during the second quarter of 2025 after falling 0.5% in the first quarter, the Commerce Department said.
U.S. manufacturing spending has contracted for seven straight months, according to the Institute for Supply Management. And construction spending has been flat to down, due to high interest rates and rising costs. Cushman & Wakefield said in a report this month that total project costs for construction in the fourth quarter will be up 4.6% from a year earlier because of tariffs on building materials.
The stock market shows a similar disconnect between AI and everybody else.
Nvidia CEO Jensen Huang delivers the keynote for the Nvidia GPU Technology Conference (GTC) at the SAP Center in San Jose, California, U.S. March 18, 2025.
Brittany Hosea-Small | Reuters
Eight tech companies are valued at $1 trillion or more and, to varying degrees, are all tied to AI. Those companies — Nvidia, Microsoft, Apple, Alphabet, Amazon, Meta, Tesla and Broadcom — make up about 37% of the S&P 500. Nvidia, with a $4.5 trillion market cap, accounts for over 7% of the benchmark’s value by itself.
Investors are giddy about the massive investments they’re seeing in AI infrastructure. Broadcom shares are up more than 50% this year after more than doubling in each of the prior two years, while Nvidia and Alphabet have jumped almost 40% in 2025.
That explains why the S&P 500 and Nasdaq are up 15% and 20%, respectively, reaching record highs on Friday, even as the government shutdown continues to cause economic angst.
Meanwhile, the S&P 500 subgroups that include consumer discretionary and consumer staples companies have increased by less than 5% year to date.
The latest troubling sign in the consumer market came on Thursday, when Target said it’s cutting 1,800 corporate jobs — the retailer’s first major round of layoffs in a decade. Target shares have plunged 30% this year.
“I think the message that the AI economy is sort of driving up the GDP numbers is a correct one,” Arun Sundararajan, a professor at New York University’s Stern School of Business, told CNBC in an interview. “There may be weakness in the rest of the economy, or not weakness, but there may be more modest growth.”
Investors will hear all about AI in the coming days, the busiest stretch of the quarter for tech earnings, and will be listening closely for additional guidance on capital expenditures. Meta, Microsoft and Alphabet report on Wednesday, followed by Apple and Amazon on Thursday.
Nvidia’s stock over the last year.
Last month, Nvidia announced a $100 billion investment in OpenAI, a startup valued at $500 billion. The capital will help OpenAI deploy at least 10 gigawatts of Nvidia systems, which is roughly equivalent to the annual power consumption of 8 million U.S. households.
Shares of Advanced Micro Devices have doubled this year and soared more than 20% earlier this month after the chipmaker announced a deal with OpenAI, while Oracle has been on a tear of late due to its ties to OpenAI and the broader infrastructure buildouts.
“Are we sort of inflating the economy now, thereby setting ourselves up for a crash in the future?” Sundararajan said. He added that he’s not seeing signs that demand for AI infrastructure will slow anytime soon.
‘Tariff price management’
When it comes to local businesses, most only know about the AI gold rush from the news headlines. One in four small business owners are stuck in “survival mode” as they contend with challenges like rising costs and tariffs, according to a September KeyBank Survey. It’s a segment of the economy that routinely accounts for about 40% of the nation’s GDP.
Pappas’ flower shop was founded in 1921, and purchased by his dad in 2002. The business has survived the Great Depression, World War II and the Covid pandemic. Pappas said his father, who died in 2022, reminded him that these periods were “just another season” for Norton’s, and that such challenges come with the territory.
But Trump’s tariffs have created a whole new set of constraints, as roughly 80% of all cut flowers in the U.S. are imported from countries like Colombia and Ecuador, according to the U.S. Department of Agriculture.
There’s no way for Norton’s to avoid higher import costs, but Pappas said he’s started buying some flowers directly from South American growers, which saves him money versus going through distributors that charge extra.
Pappas said it’s part of his “tariff price management” effort.
Trump’s tariffs will cost global businesses more than $1.2 trillion this year, and most of those costs are being passed onto consumers, according to S&P Global.
With the holiday season rapidly approaching, consumer sentiment is of particular importance. The picture is bleak.
The majority of U.S. consumers, 57%, that responded to a Deloitte survey published this month said they expect the economy to weaken in the year ahead, up from 30% a year ago. It’s the most negative outlook since the consulting firm began tracking sentiment in 1997.
Gen Z consumers, which the survey defined as ages 18 to 28, said they plan to spend an average of 34% less this holiday season compared to last year. Millennials, those between 29 and 44, said they expect to spend an average of 13% less this holiday season.
Additionally, seasonal hiring in the retail industry is poised to fall to its lowest level since the 2009 recession, according to a September report from job placement firm Challenger, Gray & Christmas.
The firm released another report earlier this month that showed new hiring in the U.S. has totaled just under 205,000 so far this year, off 58% from the same period last year.
The Starbucks logo is displayed in the window of a Starbucks Coffee shop on Sept. 25, 2025 in San Francisco, California.
Justin Sullivan | Getty Images
Starbucks announced a $1 billion restructuring plan in September that involves closing several stores in North America. Around 900 nonretail employees were laid off as part of the plan, and the company let go of another 1,100 corporate workers earlier this year.
Starbucks shares are down about 6% this year.
Shares of Wyndham Hotels & Resorts slumped on Thursday after the hotel chain issued disappointing third-quarter results. CEO Geoff Ballotti cited a “challenging macro backdrop” in the company’s earnings release. The stock is down roughly 25% year to date.
Even in parts of the tech industry that have benefited the most from the AI boom, companies have been conducting layoffs. Microsoft announced plans to cut around 9,000 jobs in July, which the company partly attributed to reducing layers of management. Salesforce is one of a number of tech companies that have announced layoffs, saying that AI can now handle the work.
But Hatim Rahman, an associate professor specializing in AI at Northwestern University’s Kellogg School of Management, said that most businesses using AI for efficiencies won’t find them right away. So companies can’t count on the technology to counter declining revenue and, Rahman said, “the road to the future is going to be bumpy.”
“AI is not a plug-and-play solution,” Rahman said. “For many organizations, it’s going to involve engagement with people, processes, culture, tools to be able to reap the benefits. And in the aggregate, it’s going to take time.”
WATCH: The AI boom is lifting the stock market, but it may be masking a weaker economy
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