Shaping the Future of Fintech: Trends and Opportunities

Since 2016, TempoCap has had the pleasure of working with some of Europe’s leading fintech companies, with successful exits including CurrencyCloud (acquired by Visa for £700m), Onfido (acquired by Entrust), Azimo (acquired by Papaya Global) and Simplesurance (acquired by Allianz). In the current portfolio, we have the pleasure of working with account-to-account open banking leader, Token, along with innovative digital savings & investment application, Acorns.

TempoCap is fortunate to have exceptional fintech expertise within the team, with our investment efforts led by Adam Shepherd, Matt Knowles, and Pierre Suhrcke. Recently, we sat down as a team to discuss the recent trends in the market, and where we see the next areas of opportunity.

Office of the CFO:

The CFO is at the heart of financial decision-making in any organisation, yet they face growing challenges as the complexity of the business environment increases. According to a recent Deloitte survey, 77% of CFOs cite digital transformation as a key priority, but many still rely on legacy systems that limit real-time insights and automation. The fragmented tools used for cash management, reporting, and tax processes result in inefficiencies and increase operational risks. According to a 2024 McKinsey report, only around 25% of the finance functions have been fully automated or digitised, pointing to substantial opportunities for AI-enabled software products.

Key areas of focus:

– Cash Management/Treasury: With interest rate volatility and liquidity risks, businesses are seeking smarter, real-time solutions to optimise their cash flow and working capital. Fintech platforms that streamline treasury operations can enhance the return on capital and accelerate business growth.

– Accountancy & Audit: Automation in accounting and audit processes can reduce human error, accelerate close times, and provide better regulatory compliance.

– Tax & Modelling: Tax complexities, especially in global organisations, present a significant opportunity. Fintech innovations that simplify multi-jurisdictional tax reporting and provide robust financial modelling tools save companies time and reduce the risk of error.

– Reporting: Data-driven reporting tools that provide dynamic dashboards and integrate seamlessly with ERP systems offer CFOs the ability to track performance metrics and regulatory compliance in real-time.

The Future of Payments Infrastructure:

The future of payment infrastructure is set for a major transformation as global digital transactions continue to rise. By 2030 the digital payment market is expected to reach $24trn, growing at a CAGR of 15% from 2024 to 2030. Despite the tailwinds, this rapid growth also presents challenges, particularly in terms of security, interoperability, and speed. Traditional payment systems, especially cross-border payments, remain inefficient—SWIFT transactions can take several days and carry high fees. Real-time payments and open banking (Token!) are emerging as vital solutions to meet the increasing demand for speed, transparency, and lower costs, while digital wallets and stablecoins are poised to redefine consumer and business transactions globally.

Key areas of focus:

– Open Payments: Open banking regulations and APIs are revolutionising payments by allowing third-party providers to access banking infrastructure and access financial data directly. These platforms enable seamless, secure financial services for both incumbent banks and new-age fintechs.

– Digital Wallets: With over 4.4 billion mobile wallet users projected by 2025, digital wallets are becoming an integral part of the global payment ecosystem. Their ability to provide consumers with instant payments, ease of use, and security is driving widespread adoption, particularly in emerging markets where traditional banking access is limited.

– SWIFT to Real-Time Payments: The transition from batch-based SWIFT payments to real-time payments represents a major shift. Real-time payment systems like Faster Payments in the UK and FedNow in the U.S. enable instant settlements, reducing liquidity risk and improving cash flow for businesses. This space offers significant potential for companies to modernise outdated systems and meet rising demands for speed and efficiency.

– Stablecoins: Stablecoins, like USDC and Tether, provide the benefits of cryptocurrency without the volatility, making them attractive for payments and remittances. As regulation becomes clearer, stablecoins have the potential to bridge the gap between traditional and decentralized finance (DeFi), offering faster, cheaper cross-border transfers. Stablecoin infrastructure that supports everyday transactions will play a key role in the future of global payments.

Next Generation Wealth & Asset management:

Last month, Vanguard projected that $18.3trn in wealth will be transferred globally by 2030 – the ‘great wealth transfer’, the largest intergenerational transfer of assets in history. As digital transformation accelerates, platforms leveraging AI, machine learning, and automation are delivering personalised portfolio management and real-time insights, meeting the demand for data-driven decision-making. Additionally, the rise of millennial and Gen Z investors, who expect digital-first, seamless experiences, puts pressure on traditional systems to modernise. Those platforms that can capture these tailwinds have the possibility of building very large businesses.

Key areas of focus:

– Intergenerational Wealth Transfer: As above, we are approaching the largest generational wealth transfer in history. The ‘inheritance generation’ will bring new expectations, preferring digital-first platforms and ESG-focused investment options. Fintechs that offer tailored solutions to multiple generations, with considered personalisation, will have a significant market opportunity

– Roboadvisors and Automation for Wealth Managers: Automation and AI-driven roboadvisors are redefining the wealth management landscape by providing affordable, data-driven financial advice. These platforms can serve both mass-affluent and high-net-worth clients, offering efficiency and scale for wealth managers while maintaining personalised client interactions.

– Capital Markets: capital markets solutions are developing quickly – real-time data, providing access to dynamic asset allocation strategies, analytics, and trade execution. Modern capital markets technology can enhance speed and decision making, whilst catering to a broader set of client needs, from trading to long-term planning.

– Compliance & Regtech: Regulatory compliance is an ongoing challenge, with managers faced with new regulation in their home market and other nations regularly. Fintechs that offer RegTech solutions with real-time tracking, automation, and AI-enhanced monitoring present a significant opportunity to reduce compliance costs and mitigate risks.

Of course, there are several other areas in which we are actively investing!

If you are a fintech founder building a market-leading business in Europe, we would love to hear from you. Feel free to reach out to harrie@tempocap.com.