29 May 2025

Fintech Inflection Point: Platform Wars, Embedded Finance, and AI Shape the Future

A new HSBC Innovation Banking report finds that platform battles, embedded finance, and AI-Driven products are redefining fintech’s next chapter.

(NEW YORK) - Horizontal convergence among fintech platforms is intensifying competition, embedded financial tools are breaking into non-financial sectors, and AI is enabling a new generation of hyper-personalized financial products, according to a new report released today by HSBC Innovation Banking.

The report titled, Convergence, Emergence & Resurgence, argues that the fintech sector is entering a second wave of transformation-driven by mature infrastructure, AI-native operating models, and shifting liquidity dynamics-and marks a strategic inflection point for disruptors and incumbents alike.

“Increasingly, fintech products are seamless digital experiences, enhanced by AI and enriched by data,” said Dan Allred, Managing Director, Fintech at HSBC Innovation Banking. “Fintechs now support a new generation of emerging products that enable companies that have never touched banking, lending, payments, or insurance to offer financial services. The result is that all companies are now becoming fintechs.”

Key Findings Include:

A Platform Battle is Underway: As vertical fintech leaders expand into adjacent services, they are colliding head-on-triggering a new phase of horizontal convergence that echoes the “platform wars” seen in the last tech decade.
Consolidation as a Defensive Move: Rather than acquiring disruptors, traditional incumbents are increasing merging with peers in a bid to defend market position-especially in areas where fintechs have gained meaningful share, such as business payments and asset management.
Embedded Finance Matures: Backed by APIs and BaaS infrastructure, financial services are being woven directly into non-financial platforms-from e-commerce to SaaS-setting the stage for a wave of new ecosystem-shifting partnership.
AI as a Defining Force: Generative AI and predictive analytics are catalyzing a new wave of fintech products, lowering cost-to-serve, enabling hyper-personalization, and reshaping customer experiences across the value chain.
Fintech Liquidity Reawakens: With a thaw in public markets and early signs of IPO activity, venture-backed fintechs are exploring both exits and scale paths-marking the beginning of a new growth cycle.

The release of the report coincides with New York Tech Week, where HSBC is hosting a panel titled Fintech x AI: Shaping the Future of Finance on Wednesday, June 4^th, 2025. The panel will be moderated by Dan Allred and will feature leaders from across fintech and AI exploring the sector’s next wave of innovation.

Download the Full Report
Available Now at: https://www.hsbcinnovationbanking.com/us/en/resources/fintech-2025-horizons-report

Panel Details:
New York, NY
Wednesday June 4, 2025, 4:00 - 6:00 pm ET
Moderated by Dan Allred, HSBC
https://www.tech-week.com/

Media Contacts

HSBC (New York) Conor Gronbach
Tel: +1 (919) 609-9423
Email: conor.gronbach@us.hsbc.com

Notes to Editors:

About HSBC
HSBC Holdings plc, the parent company of HSBC, is headquartered in London. HSBC serves customers worldwide from offices in 58 countries and territories. With assets of US$3,054bn at 31 March 2025, HSBC is one of the world’s largest banking and financial services organisations.

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