Why the future of fintech is being shaped where traditional banking has failed most

When we talk about the future of fintech, we usually look to London, New York, Paris, or Singapore. These cities have capital, banks, regulators, and strong teams. But the future of financial technology will not be determined only where it is built. It will be shaped where it is genuinely needed.

In Europe and the US, a new fintech product usually improves a system that already works: it shortens onboarding, automates customer verification, or reduces fees. The user already has a bank account, a card, a credit history, and mobile banking. A new service does not need to give them access to finance; it needs to persuade them to change an established habit.

In markets across Africa, South Asia, and Latin America, a mobile wallet can become a person’s first account, a phone their first bank branch, and a digital service their first access to payments, credit, savings, and the formal economy.

The absence of legacy banking systems creates an additional advantage in these markets. New players do not need to adapt innovation to old infrastructure: they can leapfrog several stages of development and build modern financial services from the ground up.

This is the central paradox of fintech: its strongest growth may come not where banking systems are most developed, but where their weaknesses are felt most acutely.

A bank account no longer necessarily means a bank

Mobile technology has allowed some countries to skip the stage of building out branch networks and move straight to a digital model. This leap is known as leapfrogging.

Nowhere is this more evident than in Sub-Saharan Africa. According to GSMA, there are more than 2.3 billion registered mobile money accounts worldwide, over 1.1 billion of them in this region.

Mobile money grew not out of banks, but out of telecoms operators, SIM cards and agent networks. In many places, the traditional banking model was simply too expensive.

Mobile wallets reduced the cost of entering the financial system almost to the cost of having a mobile connection. Through them, people receive salaries and government support, pay for goods, send money to family, and access microloans and insurance.

For users, it matters less and less who provides the service – a bank, a wallet, or a payments platform. What matters more is whether the service delivers the result they need.

The next wave of competition will not be between apps

India and Brazil have demonstrated a different model: the state can create open digital rails on which banks, fintech companies and small businesses build their own products.

In December 2025, India’s UPI system processed more than 21.6 billion transactions. Brazil’s Pix has had a similar impact. Their strength lies not only in speed: a taxi driver, a café, a freelancer and a corporation can all operate on the same infrastructure.

Today, the Indian model is arguably one of the most advanced digital fiat systems in the world. UPI works in conjunction with Aadhaar, the national digital identity system. As a result, every transaction can be digitised and accompanied by instant compliance checks, while every individual can have an end-to-end digital identity within the financial system. When payments become instant and accessible, small businesses gain a digital record of their income, seasonality and actual cash flow. This data can then be used to build credit scoring, lending and insurance products.

One of fintech’s most underestimated functions is that it does not merely use financial data – it creates it for the first time. Every digital payment builds a history that may later give an individual or business access to credit.

Competition is therefore shifting from interfaces to infrastructure: who processes the payment, sees the transaction, controls the customer relationship and holds the data needed to assess risk. Whoever can see the movement of money is best placed to build the next product.

Stablecoins: a new financial infrastructure with reversed unit economics

The most important feature of stablecoins is not simply that they are a digital equivalent of the dollar or another currency. Their fundamental difference from the traditional financial system lies in a radically different, inverted unit-economic model.

The traditional financial system operates through a vertical economic model. A bank takes deposits, issues loans and earns the spread between interest rates, while also collecting fees from transactions, currency conversion and other operations. In simple terms, a person has $100 and makes a transfer, leaving them with $99; they make another transaction, and they are left with $98. At every stage, part of the value is taken by banks, payment networks, intermediaries and other participants in the infrastructure.

With stablecoins, the model can work in reverse. A stablecoin is effectively a tokenised low-risk financial instrument. For example, the issuer receives dollars from users, issues tokens backed by those funds, and invests the reserves in short-term US Treasury bonds and other low-risk, yield-bearing assets. These reserves generate income, so the issuer’s main objective becomes increasing the volume of stablecoins in circulation and expanding the reserve base from which it earns.

Stablecoins operate through the opposite, reverse economic model. Because the reserve itself generates income, the issuer can decide where fees do not need to be charged at all and where part of the yield can be shared with the user. Its task is to expand the stablecoin’s distribution, attract new users and thereby grow the reserve.

At the same time, stablecoins are rapidly moving from the category of cryptocurrency instruments into that of fully fledged means of payment and international settlement. An increasing number of import and export transactions are being settled directly in stablecoins. This shortens settlement times, reduces the number of intermediaries and allows capital to be used more efficiently.

The entire economy is gradually moving in this direction

For a freelancer, entrepreneur, exporter or company operating in a country with an unstable currency, stablecoins make it possible to receive payment quickly, hold funds in a dollar equivalent and avoid waiting several days for a bank transfer. For businesses, this means capital spends less time “in transit” and returns to circulation more quickly.

The same logic of leapfrogging is now extending to stablecoins. Most USDT activity takes place in the time zones of Asian and African markets. For some users, it is not a speculative instrument but a way to access a digital dollar, savings and cross-border payments without having to rely on fully developed banking infrastructure.

This model is likely to develop first in countries across the Global South – in Africa, Latin America and other markets with less developed traditional banking infrastructure.

Stablecoins also offer a distinct advantage in compliance. Because transactions take place on-chain, the movement of every fraction of a token can be tracked at every stage. This makes it possible to see an asset’s history, assess risk, automate checks and monitor transactions far more precisely than in a fragmented traditional system.

The next stage is programmable money

The widespread adoption of stablecoins could make money programmable. An employee could receive their salary every hour or even every minute, while a company could charge customers just as frequently, provided transactions become cheap enough to support such a model.

The greatest advantage is that CEOs and other executives would be able to see the company’s financial position in real time: how much it is spending, how much it is receiving, and whether it is profitable at that precise moment.

Tokenisation reduces market fragmentation

On-chain infrastructure also helps address the problem of fragmented liquidity. When stablecoins and tokenised real-world assets, or RWAs, exist within the same digital environment, assets become programmable, interoperable and available for automated financial operations.

For example, a person may own a flat, a car, a painting or another asset but urgently need cash. In the traditional system, using such an asset as collateral can be difficult and time-consuming. If the asset is tokenised, it can be pledged on-chain, used to obtain stablecoins and then put to use.

This makes it possible to create new financial instruments, including collateralised loans, credit products, derivatives, indices and others. They can operate around the clock, without being tied to banking hours and without requiring a separate closed infrastructure to be built for every new instrument.

This is one of the main directions of development. Stablecoins themselves can be seen as only an early, in some respects almost prehistoric, stage of the new financial system. Stablecoins are therefore no longer simply a cryptocurrency or merely a cheaper way to transfer money. They are a foundational element of a new financial system in which payments, reserves, compliance, lending, tokenised assets and new financial products are brought together within a single global digital infrastructure.

Prediction markets – more than just betting

One of the most topical areas is prediction markets. They are often seen as a form of gambling or simply a way to bet on a football match. But their potential is far broader: they could become a financial instrument for traders, producers and agricultural companies.

However, it is far more difficult to hedge risks linked not only to price but also to specific events. For example, a storm in a particular region may threaten a future harvest. Prediction markets could give companies an additional tool for assessing and hedging such risks, including weather events, crop yields, commodity prices, mineral resources and other factors that directly affect their business.

Verifying the accuracy of news

A second important use case for prediction markets is linked to the development of artificial intelligence.

In the future, major news organisations such as the BBC or CNN could launch prediction markets within their own platforms. In effect, they would be able to say: if you believe our information is false, bet against us.

If a media organisation publishes false information, a user who bet against it receives a reward. If the information proves to be accurate, this strengthens trust in the organisation because it is effectively assuming financial responsibility for the accuracy of its own reporting. This could become a major area of development for prediction markets in its own right.

At the same time, prediction markets can be used as a fully fledged financial instrument by traders, producers and large companies. The fact that BlackRock is already developing a dedicated prediction-markets business shows that major capital sees them as far more than a betting tool. I believe these markets will increasingly be used to hedge risk, assess event-driven scenarios and verify the accuracy of information in the media.

What this means for the fintech market

The next wave of fintech growth is likely to come not only from the world’s largest financial centres. It will take shape in markets where traditional banking infrastructure has proved too expensive, too slow or inaccessible to a significant share of the population and businesses.

It is in these markets that mobile money, stablecoins, programmable payments and tokenised assets can do more than improve the existing system: they can effectively replace parts of it. For users, this means faster access to payments, savings and credit. For businesses, it means new models for settlement, liquidity management and risk assessment.

At the same time, weak banking infrastructure does not make a market easy to enter. Such countries often have complex regulation, currency risk, low levels of trust, fraud and distribution challenges. The advantage will therefore go not to companies that simply transplant a Western product, but to those that understand local constraints and build their service around them.

Europe, the UK and the US will continue to be centres of capital, regulation and financial expertise. But many of the models that will define the future of banking may first reach scale in Africa, Asia, Latin America and the Middle East.

The future of fintech will not be shaped only where the strongest financial systems already exist. It will be shaped where technology gives people and businesses full access to them for the first time.