After several years of turbulence, the global fintech sector is entering a new growth phase. In Europe, however, fintech penetration remains a miniscule 2.6% even as consumers trust digital platforms more than legacy banks. Aneli Capital partner and fund manager Daiva Rakauskaitė expects the next phase of European fintech growth to depend on startups who build regulatory capability early and use AI to compete with better-funded incumbents.
In 2025, global fintech companies generated approximately $650 billion in revenues, growing 21% over 2024, according to a recent McKinsey report. Investment data by CB Insights shows that in Q1 of this year, fintech deal value was $12,1 billion, up 3.7% yoy, with the US capturing 47% and Europe around 21%.
A McKinsey survey across European countries shows that consumers trust fintech companies and digital banks more than traditional banks for the first time, and see fintechs as more innovative, more transparent on fees and better value overall.
However, fintech financial services still represent only a fraction of the broader financial market. In Europe, the fintech sector has remained smaller, 2.6% market penetration, compared to 3% of Asia and 8% in Latin America.
Rakauskaitė notes that European fintechs often lag behind due to fragmented national markets, stronger incumbent banks, lower access to capital, and regulation. “In Europe, regulation often sets the pace of fintech expansion. For early-stage companies, compliance and licensing requirements can increase the cost and complexity of market entry, favoring larger, better-capitalized players. So, fintechs that invest in regulatory capabilities early can turn compliance into a competitive advantage, strengthening customer trust and increasing their attractiveness to investors,” she says.
For fintech startups, she sees some of the most underexplored opportunities in Central and Eastern Europe. The region offers a practical testing ground: markets including Poland and Romania are large enough to validate demand, but focused enough for fintech companies to adapt to regulation early and build for cross-border expansion from the start.
Meanwhile, countries such as Lithuania have already built experience in attracting and supervising global fintech players, including Revolut, while also developing strong technical talent and regulatory expertise.
Q1 investment data by Pitchbook already shows that investors are backing AI-native startups at the earliest stages, where smaller teams are hitting growth benchmarks faster than ever before.
