When mobile apps, cloud platforms and open APIs first entered the financial world a decade ago, they sparked a wave of excitement that labeled an entire investment sector as fintech. Ten years on, those once-novel tools now sit at the core of every bank’s technology stack, turning the original disruption into a new baseline.
Industry observers note that the proportion of venture capital allocated to fintech fell from 14.5% in 2021 to 12.3% in 2025. At the same time, the slice of funding aimed at pure artificial intelligence ventures surged from roughly 10% to between 70% and 80% of the fintech pool. The shift reflects a deeper reality: the ideas that defined fintech have become expectations, while AI and tokenized finance are the next frontier.
AI replaces human judgment in underwriting and fraud detection
Simon Taylor, a well-known fintech commentator, argues that the three pillars of any financial product—decision, record and distribution—are being remade by machine-learning models. Traditional loan officers once set rates in branch ledgers; today, sophisticated models evaluate risk in seconds. Revolut, for example, built a proprietary foundation model called PRAGMA that processes transaction data from over 80 million users, improving bad-credit detection by 130% and cutting fraud false-positives by 65%.
In the United Kingdom, Allica leverages an AI-driven agent to conduct half of its small-business loan screenings, delivering decisions in an average of 12 minutes. These examples illustrate how AI-enabled underwriting is compressing cycles that once took days into moments, freeing staff to focus on relationship building rather than rule-based assessment.
Embedding AI into payment flows
Payment innovators are also inserting intelligence directly into transaction pathways. Deutsche Bank partnered with IPID to embed AI-based decision intelligence into its payment rails, while FIS added real-time transaction enrichment through its integration with Spade. BNY Mellon’s new Pay-to-Wallet service lets institutions settle cross-border transfers instantly, and Cosmos is opening a 24/7 bridge to the SWIFT ledger for nonstop global payments.
Tokenized records and the rise of stable-coin settlements
Where fintech once digitized the front-end, the back-end is now moving toward tokenized records. A tokenized deposit represents a traditional bank balance as a digital token that can travel across blockchain-compatible networks while remaining fully regulated. In the UK, seven major banks—including Barclays, HSBC UK and Monzo—completed live transactions using such tokens, covering real-world activities like home-remortgages and marketplace purchases.
The underlying infrastructure was supplied by Quant, a firm that links legacy banking systems with distributed ledgers. By allowing deposits to flow between competing banks, Quant avoids the creation of isolated silos and paves the way for programmable money that can execute automatically when pre-defined conditions are met.
Across the Atlantic, the Clearing House selected Quant to power a new network that will route tokenized deposits through the U.S. Real-Time Payments (RTP) system and the CHIPS large-value clearing platform. The rollout is slated for early 2027, promising seamless settlement of digital cash without abandoning the established banking framework.
Stablecoins as a bridge to continuous markets
Visa’s recent adoption of the stablecoin USDC for daily settlements demonstrates how traditional processors are embracing digital cash. The move eliminates weekend pauses that once constrained settlement cycles. Meanwhile, Circle and Volante Technologies are collaborating to give institutions end-to-end stablecoin payment and settlement capabilities, reinforcing the role of fiat-backed digital assets in everyday commerce.
Industry-wide rollout: from insurtech to supply-chain finance
Beyond core banking, the AI-token wave is touching adjacent sectors. Bold Penguin launched Dex AI to automate commercial-insurance underwriting, while Xceedance reported up to 50% efficiency gains through AI orchestration. Federato earned a spot on CB Insights’ Insurtech 50, and Willis Treacy Willis introduced Radar AI Assistant to provide natural-language insights for insurers.
In lending, Experian’s personal-finance app now runs on Google Gemini, and LoanPro teamed with Spring Labs to automate dispute resolution for lenders. Finastra unveiled a new supply-chain-finance platform, extending the token-centric model to trade-finance workflows.
Regulators are also responding. India’s Supreme Court declined to block a modest merchant-discount rate on higher-value UPI payments, aiming to preserve the low-cost model that propelled UPI’s mass adoption while introducing a modest fee for larger transactions. In the United States, the IMF’s Deputy Managing Director warned that autonomous AI agents will soon need to navigate payment routing, compliance and liquidity-management decisions, potentially reshaping how cross-border flows of nearly one quadrillion dollars are priced.
Even card networks feel the pressure. American Express announced acceptance at more than 190 million merchant locations worldwide—a 20 million-location increase in a single year—underscoring the global appetite for seamless, digitally enabled payment experiences.
