The contours of fintech 2.0 are becoming clear

The fintech funding exuberance of the early 2020s was a black swan phase, precipitated by the pandemic.

- VIVEK IYER & ROHAN LAKHAIYAR

It validated the fintech proof-of-concept, as both investors and consumers began to recognise the long-term potential of technology-led delivery of financial services.Fintechs, particularly in payments and consumer lending, attracted a disproportionate share of capital during this period, driven by rapid adoption and favourable market sentiment. As fintechs scaled, many moved away from their initial role as technology partners to incumbent financial institutions. They instead sought to directly serve customers, by pursuing regulatory licences to operate independently in niche fields. This expansion in scale and scope attracted heightened scrutiny, resulting in a series of regulatory interventions that disrupted many business models. Consequently, the sector witnessed a shift in focus from vanity metrics such as user growth, monthly active users, and gross transaction value toward more fundamental considerations around governance, compliance, conduct, and risk management.