World moves toward a digital-first financial landscape

Arun Leslie John, June 9, 2025, Khaleej Times

The fintech revolution is significantly transforming the financial landscape, providing innovative solutions that enhance accessibility, efficiency, and user experience, but it still requires strict regulations to protect consumer data and financial assets, experts say.

Leading executives, analysts and experts said technologies such as mobile banking, blockchain, and artificial intelligence (AI) are enabling seamless transactions and personalised financial services, catering to a diverse range of consumers, including the unbanked population especially in the developing countries.

They are of the view that fintech companies are disrupting traditional banking models, offering faster loan approvals, lower fees, and enhanced transparency. However, this rapid growth comes with challenges, primarily concerning security, privacy, and regulatory compliance.

“As fintech expands, the potential for fraud and cyber threats increases, necessitating stringent security measures to protect consumer data and financial assets. Furthermore, the lack of comprehensive regulatory frameworks can lead to inconsistencies and risks in the market,” they said.

To ensure sustainable growth and consumer protection, fintech must evolve alongside regulatory developments and policymakers need to adopt adaptive regulations that foster innovation while addressing risks, according to an expert.

“Collaborative efforts between fintech firms, traditional banks, and regulators can create a balanced ecosystem that encourages growth while safeguarding against potential pitfalls. In this way, the fintech sector can continue to revolutionize finance, ensuring that technological advancements align with societal expectations and regulatory standards,” he said.

Challenges, Regulatory Issues

Arun Leslie John, Chief Market Analyst at Century Financial, said the rapid growth of fintech globally has developed numerous obstacles and regulatory issues for fintech applications. “Venture capital is still one of the biggest hurdles for fintech startups. Investors are sceptical about startups’ sustainability in the long term and pose questions regarding the problem the product solves, market size, and probability of success. Convincing the investors takes careful financial planning, long-term perspective, and proof of the idea with figures or user surveys,” John told BTR.

Meanwhile, finding the right investor to discover and acquire is also key to a startup’s success. Startup business conferences and startup accelerators offer avenues to connect with potential investors. Differentiation from competitors involves a complete pitch deck presentation covering company overview, problem-solving, market opportunities, business models, and financial projections.

In addition, competition with established financial and technological giants like PayPal and Amazon is a hard challenge for fintech startups. In order to be successful, startups could consider niches of the market where titans are not so powerful or have fateful problems of digital finance development. In B2C or B2B industries, startups should introduce new solutions in order to be the market leader.

Furthermore, regulatory regimes are constantly evolving, and the evolution can facilitate or hinder the growth of FinTech solutions. For instance, regulations like PSD3 in the EU and Consumer Duty regulations in the UK are attempting to enhance consumer protections.

“But there are issues as well. The Buy Now, Pay Later sector is coming under the lens as well, with countries like Australia now requiring formal credit checks for operators. Regulations have always driven innovation, though, as one can see from the UK’s open banking platform,” John said.

He said the international cross-border payments market is also experiencing dramatic changes, and inefficiencies in the conventional financial system are paving the way for disruption. Fintech players are stepping in and offering simplified transactions, and instruments like stablecoins are offering real-time settlement and reduced charges.

“The question is whether governments will embrace these innovations or focus on protecting traditional banks. With online trade, supply chains, and remote work, efficient international transactions will be vital. Companies that will be in a position to anticipate and adapt to regulatory shifts are likely to succeed in this new world,” he said.

Promising Outlook

John of Century Financial said fintech is poised for growth in the next five years, driven by technological advancements and increasing digital adoption.

“The fintech market is valued at an estimated $356.79 billion in 2025 and is projected to grow at a compound aggregate growth rate (CAGR) of over 14% in the next five years, reaching $686.85 billion by 2030. North America currently leads the fintech market, while the Asia-Pacific region is expected to grow at the highest CAGR,” he said.

He said one of the main drivers of this growth is embedded finance. It involves integrating financial services into non-financial platforms like social media and ride-hailing apps.

“PayPal, Stripe and Square are leading this segment, offering loans and payment options to users right within their daily routine. The Buy Now, Pay Later trend is also rising, changing how people access credit.”

Meanwhile, artificial intelligence and machine learning are transforming wealth management, risk assessment, and fraud detection, making financial services more efficient and personalised.

John said the fintech landscape is also evolving with the emergence of decentralised finance (DeFi) and central bank digital currencies (CBDCs).

“Innovations in DeFi, like advanced lending protocols and blockchain-based insurance platforms, are pushing for a more transparent financial system. Central banks worldwide are exploring CBDCs to improve financial inclusion, streamline transactions, and reduce the complexities of cross-border payments,” he said.

“As fintech continues to grow and innovate, it’s reshaping the global financial landscape. In the future, we can expect financial services to become even more integrated into our daily lives, making transactions smoother, more data-driven, and more sustainable.

“With companies pushing the boundaries of innovation across payments, lending, wealth management, and blockchain solutions, fintech’s influence on the future of finance will only grow stronger,” John concluded.

Source:

Khaleej Times