I recently came across the latest research reports from McKinsey and QED Investors, which made me realize that the fintech sector is undergoing a fundamental transformation.

The era where storytelling and burning cash to attract customers could easily secure large amounts of funding is gone for good. The current approach is completely different—those with strong profitability and good compliance will survive longer. The report calls this new era the "Fifth Era" of fintech, and I think this definition is quite accurate.

Data shows that by 2025, the global fintech revenue will reach $650 billion, accounting for only 4% of the entire financial services market, but its growth rate is 3.5 times that of traditional banks. If this momentum continues, the market size could surge to $2 trillion by 2030. What does this mean? It means more billion-dollar giants will emerge in this field.

The most interesting part is stablecoins. Currently, the total transaction value of stablecoins has reached $35 trillion, but do you know? Only 1% of that, about $390 billion, is used for actual payments. Most transactions are arbitrage and trading activities. However, the report predicts that by 2030, the market cap of stablecoins will grow from the current $300 billion to between $2 trillion and $4 trillion, with a compound annual growth rate of up to 40%. This growth potential is quite remarkable.

Regional differences are also quite evident. North America is the largest market, with revenue of $310 billion; Latin America, though only $60 billion in size, is growing the fastest, with an average annual growth of 40% over the past five years; Asia-Pacific’s growth has slowed from 23% to 15% due to regulatory impacts.

Another noteworthy trend is that more and more fintech companies are actively applying for banking licenses. In 2025, the number of new applications in the U.S. reached 21, surpassing the total of the previous four years combined. This isn’t about regulatory arbitrage; it’s about using licenses as strategic tools—unlocking cheap capital, expanding product lines, and building customer trust.

The penetration of AI is also accelerating this change. Product development cycles have shortened from years to weeks. Some early adopters of AI in traditional institutions may see tangible return on equity improve by 4 percentage points. But this also means that companies relying solely on old technology moats will be quickly eliminated.

Another interesting trend is that "horizontal" fintech companies (those that don’t serve end consumers directly but provide software and infrastructure to traditional institutions) are attracting increasing investment. These companies are growing 25% faster than direct competitors and now account for 13% of total industry revenue.

Customer trust is also experiencing a reversal. A McKinsey survey in 2025 shows that customers now trust fintech companies more than traditional banks for the first time. The net promoter score of fintech firms is 2.5 times that of traditional institutions, often exceeding 50 or even 70 points.

Looking ahead, the report highlights six major opportunities: digital asset infrastructure, AI-powered financial service agents, data infrastructure, AI-driven wealth management, horizontal insurtech, and identity and trust infrastructure. These areas represent opportunities worth hundreds of billions of dollars.

But risks are also evident. Scale-ups that rely solely on technological barriers from the past 5 to 10 years, and deposit-based fintechs relying on interest margins, will face enormous survival pressures amid AI proliferation and high-interest competition.

Overall, fintech has moved from wild growth to a stage of refined operations. Those who can balance high growth with reliable profitability will be the last to succeed. The pace of change in this market far exceeds our expectations.