Geopolitical shifts are having a profound impact on the fintech industry, fundamentally altering where businesses choose to operate, secure funding, and navigate regulatory landscapes.
One major influence is on business location decisions. Fintech startups and scaleups must assess the best place to build their business based on the geopolitical environment. Traditionally, the US has been the primary hub for fintech growth, and it remains a significant market. However, many are now considering alternative regions, such as Singapore and wider Asia, where regulatory environments and market accessibility may provide a more strategic advantage.
Another key factor is funding availability. While the US has historically maintained strong investment pools, Asia is rapidly expanding its funding sources, including family offices. Europe, on the other hand, has experienced fluctuations, making the decision on where to seek funding more complex.
Additionally, geopolitical alliances are shaping fintech strategies. Various jurisdictions are forming partnerships that influence where fintech firms choose to establish themselves. The US is expected to prioritise American businesses under its new leadership, while Europe faces economic and regulatory challenges that shape competitiveness. At the recent World Economic Forum (WEF), Christine Lagarde emphasised that European leaders must respond to what she called an ‘existential threat’ in terms of competitiveness.
Sustainability is also becoming a critical consideration for fintech entrepreneurs. Factors like energy consumption and carbon footprints are influencing where businesses choose to expand. The US has recently made clear its stance on sustainability, whereas other regions are focusing on long-term environmental impacts.
A major trend to watch is regulatory arbitrage – the practice of businesses relocating to jurisdictions with more favourable regulations. The US appears poised to roll back certain financial regulations, potentially attracting more entrepreneurs and advancing the applications of emerging technologies. In contrast, Europe is known for its strong consumer protection and largely clear yet stringent regulations, such as the AI Act and MiCA for digital assets. While these frameworks improve trust, they have also been criticised for hindering innovation. If the US moves toward deregulation, businesses may increasingly shift operations to more flexible environments.
Lastly, conflicts and geopolitical shifts are driving innovation in fintech solutions for migration and refugees. The growing number of displaced individuals has led to increased demand for financial products tailored to migrants, including identity solutions, payment platforms, and digital currency-based solutions that allow people to access financial services despite their circumstances. This is expected to be an expanding area of fintech development in response to global migration trends.
If we think back to the first wave of fintech, which took off between 2007 and 2012 with the rise of Web 2.0 – powered by cloud, mobile, and social technologies – we can now see the next wave emerging, this time driven by Web3.
While Web3 is still largely being defined, if you speak to crypto enthusiasts, they often say Web3 is all about crypto. In my opinion, though, it’s about a combination of three foundational technologies: decentralisation (essentially, a distributed ledger of some kind), artificial intelligence, and quantum computing. These three technologies will shape the next wave of fintech and how new products and services are delivered and deployed in the marketplace.
Right now, AI is a major focal point, especially around agentic AI and deep learning. A significant development recently has been the deployment of AI technology by DeepSeek, a company from Hangzhou, China, which has reduced deployment costs and is democratising AI. This has had a profound impact on the generative AI market. For example, recently, USD 1 trillion was wiped off the AI market in the US, signalling a shift in the way AI models are being deployed.
As we move forward, fintech businesses will begin to explore how these technologies can disrupt the current game, much like how the first wave of fintech disrupted traditional financial systems.
Another crucial factor in shaping the next wave of fintech is policy. The first wave of fintech was largely about the intersection of finance and technology. Going forward, we’re starting to see the important relationship between policy, finance, and technology become more prominent. This will play a significant role in shaping the next wave of fintech.
Central bank projects and initiatives from organisations like the Bank for International Settlements (BIS) are playing a key role in this transformation. One example is the Global Layer One (GH1) Initiative, launched by the Monetary Authority of Singapore (MAS), which seeks to establish foundational digital infrastructure for tokenized assets. Several major banks, including BNY Mellon, JP Morgan, DBS, MUFG, and SocGen Forge, have joined this initiative, which could be a game-changer for tokenization.
There are also other initiatives like Grnprnt, which leverages analytics to ensure accurate tracking and reporting of ESG (Environmental, Social, Governance) data, and Project Nexus, an initiative from the BIS that connects real-time payment systems across countries. We’ve already seen this kind of digital infrastructure emerge in Southeast Asia, where Singapore’s real-time payments network is now connected to Thailand, India, and Malaysia, with plans for further expansion.
When it comes to digital infrastructure, a handful of markets have a highly efficient national digital infrastructure. This includes things like a digitised identity system, a real-time payments system, interoperable data exchange, and consent architecture. Countries like India, Singapore, and Estonia are leading in these areas, but many others still rely on archaic systems.
What’s exciting is how these efficient infrastructures can be leveraged with Web3 technologies. Once we have a solid digital infrastructure in place – focused on payments, identity, and data exchange – fintech companies can focus on building superior propositions on top of this infrastructure, without needing to address underlying weaknesses in the system.
In regions where digital infrastructure is already strong, fintechs can focus on providing innovative solutions for consumers and businesses. In contrast, many fintech companies in Europe over the last 10-15 years have been addressing gaps and inefficiencies in existing infrastructure. So, as digital infrastructures continue to improve globally, fintech companies will have more opportunities to build on these systems and offer more effective services.
I think the difference between the US and Europe lies in their regulatory approaches. One market uses regulation to drive growth and opportunities, while the other focuses on protection and managing risks.
In particular, the US is likely to roll back regulations, which will open up many opportunities. Both the US and Europe see AI and digital assets as important, but they are approaching them in different ways. As we’ve seen in the US, there will likely be a continued wave of activity in AI and digital assets, whereas Europe’s pace of change may be slower.
In the last year or so, we’ve started to see certain businesses view the US as a more attractive location due to its regulatory environment and the opportunities created by it.
When I think about regulation in Asia, it’s relatively robust, especially when it comes to digital assets. A few trends are starting to emerge, and I’ll highlight a few of them.
One trend is the increasing interoperability between mobile wallets across Asia. Whether you’re using a super app or a standalone mobile wallet, we’re starting to see wallets becoming more connected across borders. This is important because it makes it easier for consumers to use these services and allows businesses to provide better cross-border solutions rather than being restricted to one wallet in one country.
We’re also seeing the growth of efficient digital public infrastructure, including digital IDs, real-time payments, and data and consent management. When a country has a solid digital backbone, it enables fintech companies to build products and services on top of this infrastructure, which ultimately provides better last-mile services for consumers and businesses.
In addition, real-time payment systems are becoming increasingly linked across countries. One good example is Project Nexus. These systems facilitate faster, cheaper cross-border transactions, improving connectivity and efficiency within the region.
QR codes, while dismissed in many Western countries for years, have gained massive traction in Asia. They’ve drastically reduced transaction costs, especially for low-value payments, because they eliminate the need for physical point-of-sale terminals. QR codes have now become an essential feature in national payment systems, contributing to lower transaction costs for merchants, retailers, and small business owners. We are seeing more innovation occurring around QR codes opening up different transaction types and data exchanges.
Over the past few years, we’ve seen more central bank projects across different regions, as well as the rise of India’s fintech landscape. These developments are helping to shape the future of the fintech industry in Asia.
AI and stablecoins will be key focuses for investment in the coming years. While payments has always been the largest vertical and will likely remain so, especially in emerging markets where there is still significant room for growth, AI is quickly becoming a major investment trend. We’re starting to see substantial investments flow into AI, and stablecoins are also attracting attention – though not just the usual stablecoin providers. Investors are looking at those that can upgrade the basic offering of a typical stablecoin. Traditional and fintech companies are investing in stablecoins and the current focus is clearly on cross-border payments, B2B payments, B2B treasury management and even payouts (think about the gig economy). Following several recent conversations in the industry, it seems clear that there is a play emerging in ecommerce in the checkout experience and payouts and, in time, different types of lending products could start to emerge. How governments regulate or not will play a key role here.
Another key investment trend is where organisations are leveraging both AI and digital assets together to deliver new customer solutions, for example, the combination of stablecoins and AI agents could create several highly personalised payment solutions for businesses and consumers.
I believe acquisitions will likely be more prevalent than consolidation, though both will certainly play out. In terms of areas of fintech that will see the most activity, payments is likely to be a key sector. We may also see some digital banks being acquired, particularly those that have successfully built strong customer bases and achieved low customer acquisition costs. Traditional banks may see these fintechs as valuable opportunities.
Several factors are driving these moves. For one, the company being acquired may face cost pressures, making acquisition an attractive option. On the other hand, the acquiring company could be looking to expand into new markets or access new customer bases. Another key factor is licences – we’re seeing more acquisitions driven by the ability to obtain a valuable licence in a particular market, whether it’s a payments licence, a banking licence, or even a digital assets-related licence. This trend is expected to continue, as access to these licences can provide significant value and ease expansion efforts and importantly time to market.
This editorial piece was originally published in The Paypers` Global Payments and Fintech Trends Report 2025. The report compiles insights and expertise from leaders representing companies across the financial services spectrum and it delves into the latest innovations and trends in payments and fintech across key markets worldwide.
Building the fintech ecosystem across South Asia, Africa, and Europe at a national and industry level. Following a stint leading the International FinTech Office at the Monetary Authority of Singapore (MAS), Pat led the delivery of Elevandi - now known as the Global Finance and Technology Network (GFTN) - a company set up by the MAS, to foster an active dialogue between the public and private sectors to drive fintech in the digital economy. GFTN organises convening forums, offers advisory services on innovation ecosystems, provides access to transformative digital platforms, and invests in technology startups with the potential for growth and positive social impact through its venture fund. Prior to MAS, Pat led Money20/20's growth into Europe, Singapore, and China, following stints in the payments and insurance sectors.
The Global Finance & Technology Network (GFTN) is a not-for profit organisation that engages with leaders from government, businesses, academia, and civil society to foster international collaborations with our members on technology innovation, application and adoption in financial services.
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