Fintech: The Disrupter Turned Established Player
The narrative of fintech as a dramatic disrupter in the finance industry is starting to fade. While this sector was once seen as the enfant terrible, more and more fintech companies are discovering the value of becoming respected, established entities within traditional finance. This shift is illustrated by the increasing number of fintech companies applying for bank charters, and the decreasing time it takes to obtain approval.
Transition from Disrupters to Banks
According to a recent analysis by McKinsey and QED, in 2025 the U.S. Office of the Comptroller of the Currency received 21 applications for new bank charters, which marks a significant increase compared to the previous four years combined. Furthermore, the average approval time decreased by 40%, indicating an acceleration in this trend.
The fintech companies seeking to become banks are not fledgling startups looking for legitimacy, but rather established, scaled businesses that have spent years operating outside the traditional banking perimeter. These include companies like Nubank, PayPal, Circle, Revolut, and Monzo.
The Benefits of Becoming Banks
There are numerous practical reasons for this shift. A banking charter allows fintechs to unlock cheaper deposit funding, enables product expansion into mortgages, lending, and asset custody, and allows fintechs to own the entire value chain rather than renting it from sponsor banks. Furthermore, a charter builds institutional credibility, which may sway customers who may have previously hesitated to trust a fintech with their finances.
For the most ambitious players, a full charter provides the foundation for becoming a customer’s primary financial relationship, yielding numerous benefits. They are also realizing that regulation can serve as a moat to create competitive distance with newer, lighter-touch competitors, showing that the enfant terrible has discovered the value of respectability.
Impact on Consumers and the Financial System
This shift could be beneficial for consumers as it means more competition in markets such as mortgages, small-business lending, and deposits, where digitally native, well-capitalized institutions have historically been absent. An example of this is Revolut’s new U.K. banking license, which positions it to enter the £2 trillion U.K. mortgage market.
For the financial system as a whole, fintechs voluntarily entering the regulatory perimeter is a signal that the system is adapting. The largest fintechs are betting their long-term future on legitimacy and trust, not on exploiting the gaps that slower-moving regulators have yet to close.
The Maturity of Fintech
The trend of fintechs obtaining banking charters is the most visible sign of maturity, but it’s not the only one. For the first time, respondents to McKinsey’s 2025 Retail Banking Survey said they trust fintechs more than traditional banks.
Meanwhile, the economics of the sector have matured as well. The fintech industry has moved through two distinct phases: an early era in which growth alone was rewarded, and a subsequent correction in which profitability became paramount. The new equilibrium demands both simultaneously.
Perhaps the most telling sign of the sector’s maturation is the fastest-growing category within it: fintechs that have stopped competing with banks altogether and started selling them the tools to modernize. These firms now represent 13% of overall fintech revenue and are growing 25% faster than fintechs that compete head-to-head with incumbents.
Implications for Fintechs and Banks
For fintechs, the advantages that defined the insurgent era are eroding. The advantages now are those associated with maturity: trusted distribution, regulatory credibility, and proven unit economics. For banks, the picture is more complicated. The firms competing with them are now licensed, have balance sheets, and hard-won customer relationships that can’t be easily replicated.
The reality that is emerging now is messier, more competitive, and considerably more interesting. Fintechs are becoming banks. But some of the largest banks are also becoming more like fintechs: investing in technology, improving customer experience, and rethinking legacy products. JPMorganChase spent nearly $18 billion on technology in 2025 alone. Visa has acquired or invested in more than 50 fintechs over the past five years.
The enfant terrible, it turns out, was always going to grow up. What wasn’t as predictable, perhaps, was that they would inspire some of our oldest institutions to rediscover some youthful vigor. Here is the source link for more information.
