Top fintech trends to watch in 2027: banking technology and the future of financial services

Fintech no longer disrupts finance from the outside. It now sets the pace for the whole financial services industry. McKinsey reports that fintech revenue worldwide reached about $650 billion in 2025, up roughly 21% year over year. Financial services as a whole grew about 6% a year. Lenders, fintech companies, and large technology vendors now compete and partner in the same financial industry. Incumbents can no longer treat them as outsiders.

The latest fintech trends reflect that shift. Four lead the list: AI agents, embedded services, stablecoins, and tighter regulation. Agents handle tasks that once needed whole teams. Embedded finance puts payments and lending inside the apps people already use. Stablecoins and tokenized deposits change how money moves, and regulators set new rules for all of it. This guide covers the changes shaping banking in 2027. It also looks at 2025 and beyond, since many shifts began last year. It explains what each one means for banking and shows how financial institutions can choose where to invest first.

Key takeaways

Fintech is growing fast, and the winners will be firms that tie every trend to measurable returns and data readiness.

• Fintech is growing faster than the finance industry as a whole. Revenue hit about $650 billion last year, and McKinsey says fintech could reach $2 trillion by 2030.
• AI is the biggest force, but returns lag. Deloitte found that only 4 of 50 lenders analyzed last year reported realized ROI from AI use cases.
• Open finance and embedded services move products into other apps. Firms with clean APIs gain distribution. Firms without them lose it.
• Stablecoins and tokenized deposits enter mainstream financial transactions. The GENIUS Act, signed last July, gave the US a legal basis for payment stablecoins.
• Compliance and security are product features. The average data breach cost $4.44 million globally, according to IBM’s latest report.
• Choose trends by customer benefit, not hype. Data readiness, customer demand, and regulatory exposure should set the order of work.

What is fintech?

Fintech, short for financial technology, is the use of software, data, and connected devices to deliver financial products faster, cheaper, or to more people. It covers mobile payments, online lending, robo-advisors, and the core banking systems behind them. A fintech app can come from a startup, a lender, or a retailer.

Fintech companies usually fall into a few types. The table below shows the main ones.

Payments is the largest fintech vertical, with about $250 billion in revenue, according to McKinsey.

What are the current trends in the fintech industry?

Current fintech industry trends share one pattern: technology that was once experimental now sits inside regulated financial operations. Most trends in fintech now touch compliance, data, and risk teams. The table summarizes seven key fintech trends and why each matters to incumbents.

The sections below cover each trend in turn.

Fintech innovation to expect in 2027

Progress in 2027 centers on practical, governed adoption of AI, embedded services, digital money, and security. These developments build on three years of change. The global fintech market recovered last year after two slow years. Capital is flowing again, mostly to scaled firms with a path to profit. Emerging fintech trends shaping 2027, such as agent-led payments, now sit beside older themes like open banking. Other emerging trends include tokenized deposits and post-quantum security. Each trend below includes a practical step for your next build.

Trend 1: AI in fintech moves from pilots to agents

AI is the most consequential force shaping the fintech industry, according to McKinsey. It speeds up product development, lowers costs, and reaches customers that were unprofitable to serve before. Early adopters among incumbents already see returns, and the gap with slower firms is widening.

The picture is uneven. Deloitte’s 2027 outlook found that only 4 of 50 lenders analyzed last year reported realized ROI from AI use cases. Many efforts stay reactive and siloed. Gartner adds a warning for agents: it predicts that over 40% of agentic AI projects will be canceled by the end of 2027 because of cost, unclear business case, or weak risk controls.

The lesson is simple. Start with narrow use cases such as fraud triage, document processing, and service chat. Give each one an owner, a data source, and a stop rule. Fintech solutions that automate small tasks first earn trust faster. Avenga’s AI services follow that governed approach, and the work with Bank of Cyprus shows agentic AI in banking in practice.

Lenders rarely lose AI projects to weak models. They lose them to weak data and unclear ownership. Start with one governed use case, prove the return, then scale it.

Mike Crosby, Director of Business Development, Avenga

Trend 2: embedded finance and open finance reach new apps

Embedded finance places payments, lending, and insurance inside software that customers already use. A retail app can offer credit at checkout. A logistics platform can offer drivers instant pay through embedded financial services. Customers see integrated financial services in one app, while the provider behind the scenes supplies the license, the risk engine, and the ledger. The embedded finance market grows as more software firms add these services.

McKinsey sees the same pattern in its data. Software firms that digitize incumbents from within make up about 13% of fintech revenue. They have grown about 25% faster than fintechs that compete head-on with incumbents over four years. Open banking is also widening into open finance, which shares more customer data across savings, investments, and insurance. Rules differ by region, so teams should track each market’s regulatory timeline.

For incumbents, the action is clear. Publish stable APIs, price them like a product, and decide which partners you want. Providers that run open financial platforms attract more partners. Strong integration work is a core part of Avenga’s product engineering services.

Trend 3: real-time payments, stablecoins, and blockchain technology

Money now moves at the speed of data. Real-time payments are standard in many markets, and stablecoins add a new rail for cross-border and corporate payments. Blockchain technology records digital financial assets such as stablecoins on shared ledgers, and central banks continue to study digital currencies.

The numbers need context. McKinsey notes that about $35 trillion in reported annual stablecoin volume includes only about 1%, or $390 billion, in genuine end-user payments. The rest is trading and crypto-native activity. Deloitte puts the stablecoin market on a path from about $250 billion today to between roughly $500 billion and $3.7 trillion by 2030, and warns that more than $1 trillion in deposits could be at risk. J.P. Morgan and Citi already offer tokenized deposits.

Lenders should test tokenized deposits and stablecoin settlement in narrow corridors first. Treasury payments and cross-border transfers are good candidates. The future of finance will likely mix deposits and tokens, so early pilots matter.

Trend 4: regulatory pressure, compliance, and financial crime

Regulation is catching up with fintech. The GENIUS Act, signed in July 2025, created a legislative basis for payment stablecoins in the US, and regulators were due to finalize its rules by July 2027, ahead of rules taking effect in January 2027. AI governance rules are also taking shape in several regions. Regulators also watch financial stability as stablecoins grow.

Fraud and money laundering are the other pressure. US lenders filed a record 2.6 million suspicious activity reports in fiscal 2024, about 7,100 per day, according to Deloitte. Manual review cannot keep up with that volume. Regtech and AI-assisted monitoring reduce false alerts and keep audit trails complete.

Treat compliance as a product feature. Build checks into the flow, log every decision, and keep humans accountable for the final call. Avenga’s data services help banks and financial organizations prepare the clean customer data that regulators and models both need.

Trend 5: cybersecurity and quantum-resistant cryptography

Fintech companies hold sensitive financial data, so attackers target the whole financial sector. IBM’s 2025 report found a global average breach cost of $4.44 million, down 9% from the prior year. The report also found that 13% of organizations had breaches involving an AI model or application, and nearly two-thirds lacked AI governance policies.

A second risk is slower and harder to see. Quantum computers could one day break today’s public-key encryption. NIST published its first post-quantum encryption standards in 2024, so firms can start inventorying where they use vulnerable algorithms now. A tidy inventory today saves a rushed migration later.

Security teams should map data flows, test third-party APIs, and plan for crypto agility. Our cybersecurity practice supports lenders and fintech firms with this work.

Trend 6: hyper-personalization and customer experience

Customers expect modern financial apps to know them as well as a branch once did. Hyper-personalization uses transaction data and AI to adapt offers, limits, and advice in real time. A customer who just booked a flight sees travel insurance. A saver who misses a goal sees a revised plan.

Figure 1: Grand View Research

Investing is a clear example. Digital advisers now give personalized financial planning and financial advice to people who never met a human adviser. Banking services that feel personal raise retention and make cross-selling easier. The customer experience also depends on speed: a slow app erases the worth of a smart offer.

Personalization needs consent, clean data, and clear explanations. Customers should see why they got an offer and how to change it.

Trend 7: consolidation, partnerships, and wider access

The fintech ecosystem is maturing, and every lender now sits inside a wider financial ecosystem of partners. McKinsey reports that scaled fintechs account for more than 50% of sector acquisitions, that 31 fintech IPOs listed last year, and that 21 fintechs applied for US bank charters, more than in the previous four years combined. Fintech startups now buy, merge, or become banks, and they pressure incumbents to match innovative financial offers.

Traditional financial institutions answer with partnerships and platform upgrades. A lender on a newer core can launch products faster and plug into more partners. Avenga’s work on migrating Marginalen Bank to Mambu is one example of that move.

Wider access is the social side of this trend. Mobile wallets, low-cost accounts, and alternative credit scoring bring access to financial services to people lenders once skipped. Green fintech adds climate tools that track the carbon footprint of spending and fund sustainable projects.

Is fintech worth it in 2027?

Yes, for most financial institutions, but returns vary by strategy. Not every part of the fintech landscape pays off. McKinsey says fintech could become a $2 trillion industry by 2030, about three times its current size and roughly 9% of financial services revenue. McKinsey calls the fintech industry in 2025 a return to growth. Its data shows 95 of 200 tracked fintechs were profitable in the latest period, against 26 before 2013.

Listed fintechs reached a record combined market capitalization of about $850 billion, and capital invested has risen about 40% since 2023. The fintech sector rewards firms that pair growth with credible unit economics. Weak performers lose ground fast.

How can businesses choose which fintech trends to adopt?

Pick trends by customer benefit, data readiness, and regulatory exposure, then test small. Use this six-step process for any fintech project.

1. List customer problems. Start with real friction in onboarding, payments, lending, or financial management.
2. Score each trend. Rate benefit, cost, risk, and time to launch on a simple scale.
3. Check your data. Models and personalization fail on poor data. Fix quality and access first.
4. Map regulation. Note which rules apply in each market before design starts.
5. Pilot with a clear owner. Run one narrow test, set success metrics, and agree stop rules.
6. Scale what works. Move proven pilots onto reliable cloud and DevOps platforms. Avenga’s cloud services support that step.

This process keeps technology solutions tied to business goals. It also gives leaders a defensible order of work.

Conclusion: focus wins in fintech

The key trends of 2027 share a theme. Technology is moving into the core of regulated finance, and the winners treat it as an operating decision, not a side project. Pick two or three trends that fit your customers and your data, then choose financial solutions you can govern. The financial landscape will keep shifting. Build controls into the product, name an owner for every pilot, and measure the return.

Avenga helps lenders and fintechs engineer that base, from AI at the core to governed delivery. If you plan your next move, talk to our team.

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Mike Crosby

Director of Business Development

Mike Crosby has 30 years of experience in enterprise sales. He forges strategic partnerships within the Banking and Financial Services vertical across EMEA. Mike creates long-term value for Avenga clients by aligning technology with business objectives.