Fintech Firms Now Provide the Technology That Banks Run On
The global banking infrastructure technology market generated $42 billion in revenue in 2024, according to Grand View Research. Fintech companies captured more than 35% of that market, up from less than 15% five years ago. The shift reflects a fundamental change in how banking technology is built and delivered. Instead of large IT consulting firms customising enterprise software over multi-year projects, fintech companies offer cloud-native platforms that banks can deploy in months.
McKinsey’s 2024 Global Banking Review found that 65% of banks plan to increase their spending with fintech infrastructure providers over the next three years. The main drivers are speed and cost. Banks using fintech-built infrastructure launch new products 60% faster and operate at 35% lower technology cost than those relying on legacy vendors. The rapid growth in digital banking customers is making this speed advantage increasingly valuable.
Core Banking Infrastructure
Core banking — the system that manages accounts, processes transactions, and calculates interest — is the most important piece of banking infrastructure. Fintech companies have built cloud-native alternatives to the mainframe-based cores that have run banks for decades. Thought Machine, Mambu, 10x Banking, and Finxact are the leading providers.
Thought Machine’s Vault platform runs on Google Cloud and uses smart contracts to define banking products. Mambu’s SaaS platform operates across 65 countries and powers more than 200 financial institutions. 10x Banking, founded by former Barclays CEO Antony Jenkins, is building the core platform for Chase UK. These companies have attracted billions in venture funding because the total addressable market — replacing the core systems at 25,000 banks worldwide — is enormous. Fintech revenue growing at 23% annually reflects the early stages of this replacement cycle.
Payment Infrastructure
Payment processing is the second major infrastructure category. Stripe, Adyen, Checkout.com, and Square (now Block) have built payment platforms that process trillions of dollars annually. Stripe processed $1.1 trillion in 2024, serving millions of businesses from startups to Fortune 500 companies. These platforms handle card processing, bank transfers, real-time payments, and cross-border transactions through unified APIs.
For banks, fintech payment infrastructure enables capabilities that legacy systems cannot match. Modern payment platforms support real-time settlement, multi-currency processing, and programmable payment flows. A bank using fintech payment infrastructure can offer instant cross-border payments, scheduled recurring transfers, and conditional payments triggered by external events — features that require real-time processing capabilities unavailable on batch-based legacy systems.
Identity and Compliance Infrastructure
Identity verification and regulatory compliance are areas where fintech infrastructure has had an outsized impact. Banks spend $270 billion annually on compliance, according to Thomson Reuters. Fintech companies have built platforms that automate large portions of this spending.
Onfido uses AI to verify identity documents in under 60 seconds, serving more than 1,000 financial institutions. ComplyAdvantage provides real-time transaction monitoring and sanctions screening that reduces false positives by up to 70%. Alloy offers a single platform that orchestrates identity verification, fraud detection, and compliance workflows across multiple data sources. These tools reduce the time and cost of compliance while improving accuracy — a combination that explains why Accenture reports that 80% of banks now use at least one fintech compliance provider.
Data and Analytics Infrastructure
Banking generates enormous volumes of data — transaction records, customer interactions, market feeds, and regulatory filings. Fintech companies have built specialised analytics platforms that help banks extract value from this data. Plaid aggregates financial data across 12,000 institutions, serving more than 8,000 fintech and banking clients. MX Technologies provides data enrichment that categorises transactions and provides spending insights.
Fintech venture funding has grown more than 10x in the past decade, with data and analytics infrastructure receiving a growing share. Banks that combine modern data infrastructure with AI and machine learning models can personalise products, predict customer needs, and detect fraud at levels of precision that were impossible with previous-generation technology. The infrastructure layer — built primarily by fintech companies — is what makes all of this possible.
