If you spend enough time with European fintech founders and treasury leads, a pattern emerges. Everyone is building something that chips away at the old universal bank by isolating the parts that no longer make sense for modern businesses. New digital resilience laws are forcing banks to reassess their reliance on third-party technology. Corporations have become increasingly demanding in terms of visibility, cash control, and international operations. When you combine these trends, a structural shift emerges rather than a product cycle. Financial services are fragmenting into specialised, API-driven layers, and the value is migrating to those who can serve those layers with accuracy, compliance, and scale. When you follow the direction of travel, it becomes clear which five fintech categories are set to define Europe’s next growth cycle.
1) Embedded finance, but far more vertical and mission-specific
Embedded finance has evolved from a simple checkout add-on into an industry-native solution. Retailers, travel platforms, mobility operators, marketplaces and even B2B SaaS tools are now building financial services that mirror the economics of their own verticals. Instead of generic bank credit or one-size-fits-all insurance, companies are offering working-capital products, risk-priced deferred payments, loyalty-linked credit and operational insurance that map directly to the flows and behaviours inside their sector.
This shift is occurring because embedded finance is finally generating tangible revenue. McKinsey and other European market studies indicate that the category is transitioning from early adoption to a potential of double-digit billions across payments, lending, and deposits by the end of the decade. In practice, financial products will increasingly be integrated into the tools where transactions originate, rather than being processed by the bank that handles them afterwards.
The most valuable companies will be those that already own distribution within a vertical and can integrate finance into existing workflows. Think of supplier finance living inside e-procurement systems, mobility platforms that bundle micro-insurance into every ride, marketplaces that convert payment data into credit scoring, or vertical SaaS products that issue loyalty-linked credit to recurring merchants. These are the businesses that can underwrite on real-time operational data rather than abstract credit files.
A sound signal is whether a company can combine a strong vertical sales motion with underwriting that uses product usage, supply-chain patterns and transaction histories as risk inputs. Firms that already have live loss-performance data by industry segment will scale fastest because their economics sharpen with each new cohort.
2) Treasury management and cash ops as a service
Treasury teams now want more than periodic reports and manual reconciliations. They expect real-time forecasting, automated liquidity routing, multi-currency pools, and seamless integration with ERP and payment rails. The shock of the pandemic and the churn of recent markets pushed cash forecasting and working capital management back to the top of the corporate agenda, and finance leaders no longer tolerate opaque bank processes or delayed settlement windows. They want visibility into every euro of cash, automated hedging that reacts to FX moves, and APIs that let them control flows the same way product teams control feature flags.
Over the next 24 months, that demand will reshape the market. Treasury as a Service platforms that stitch bank accounts, FX, receivables and payables into a single control plane will win share from fragmented bank treasury desks. Expect deep ERP integration, including bank integration, to become the default, as well as embedded hedging and near real-time liquidity swaps to appear in product roadmaps.
You can also expect subscription revenue to rise from mid-market customers who value predictable cash operations. The space will standardise, and multiples will compress, but the absolute value is significant because treasury touches accounts receivable, accounts payable and working capital lines. The fastest-growing companies will be those already offering reliable bank connectivity, cash pooling, and guaranteed SLAs for settlement and FX execution.
3) B2B payments and cross-border working capital tools with SWIFT for growth firms
After a decade of tooling that only skimmed cash positions, corporate treasurers now insist on real-time forecasting, automated liquidity routing, multicurrency pools and deep ERP integration. The pandemic and macroeconomic volatility have pushed working capital back to the top of the agenda, and treasury platforms that unify bank accounts, FX, receivables, and payables into a single control plane are gaining trust. Over the next two years, expect ERP plus bank integration to become standard, embedded hedging and real-time liquidity swaps to move from demo to production, and mid-market subscription revenue to scale rapidly. The fastest growers will be those already offering reliable bank connectivity, cash pooling, and guaranteed SLAs for settlements and FX execution, as these capabilities transform a treasury tool into an enterprise control plane.
B2B payments remain a massive and under-optimised category, and it is the next place banking gets unbundled at scale. Businesses want speed, visibility and native FX control across borders, and a few basis points on large flows still equals substantial revenue. The real opportunity lies beyond simple settlement in product extensions such as embedded FX, dynamic discounting, supply chain finance and programmable payouts for marketplaces.
In the future you can expect consolidation among payment orchestration providers, FX specialists, and AP automation stacks, as well as the rise of vertical payment networks for logistics, procurement, and hospitality that combine settlement rails with working capital products. You will recognise winners by their ISO 20022 readiness, API-native FX stacks, and local clearing partnerships, because those technical and regulatory ties are what unlock cross-border adoption.
4) Banking as a Service and the rise of licensed platform players
Banking as a Service has finally crossed the line from shiny fintech promise to regulatory reality. The concept has been around for years, but it’s the execution that’s where the real story is unfolding. European regulators now expect absolute clarity on who owns compliance at every layer of the stack. With DORA tightening oversight of critical third-party providers, the BaaS players that will thrive will be those that can prove operational resilience, rather than just ship attractive APIs.
The era of “spin up a bank account in a weekend” is long gone. The platforms gaining traction today are the ones that blend licensing expertise with infrastructure built for European complexity. They handle local rules, offer compliant custody arrangements, manage vendor governance, and give scaleups the confidence to build regulated features without inheriting regulatory risk.
This is pushing the market into two emerging camps. One camp is built for developers that need fast productisation in a single market and want a narrow, API-first banking primitive. The other camp is becoming a full regulatory partner for scaleups and corporates which is a model where the platform sells compliance and resilience as part of its value, not just a banking API. Those multi-jurisdictional platforms are heading toward higher pricing power and longer, stickier customer relationships because they solve the painful parts of cross-border financial operations.
In this phase of European fintech, the winners will be the platforms with local EMI or PSP licences in their strongest markets, proven uptime and resilience under DORA expectations, and governance models that banks are comfortable aligning with. Anything less will struggle to scale.
5) RegTech and operational resilience where compliance becomes infrastructure
DORA, AML enforcement, and PSD2 refinements are all converging on a single theme, that resilience and explainability are no longer optional. Companies can no longer rely on manual controls or lightweight reporting. Regulators expect systems that document incidents, monitor risks, and automate compliance with the same rigour that engineering teams apply to uptime.
That shift is transforming RegTech from a support function into core infrastructure. The strongest vendors are already moving beyond basic KYC and AML screening and into deeper layers of governance, including model explainability, supplier risk scoring, fraud telemetry, and incident playbooks that align with regulatory standards. As budgets tighten in other parts of fintech, spending on operational resilience continues to rise because fines and reputational damage have become existential risks.
Two clusters are forming. One focuses on frontline automation with perview over transaction monitoring, identity verification, and continuous screening. The other focuses on oversight proving what your systems did, when they did it, and whether the controls held up under stress. These tools are increasingly purchased by banks, insurers, and payments companies that need defensible audit trails and reporting formats that regulators will accept without escalation.
The firms best positioned to scale are those that plug directly into banking and payments data, can generate regulator-ready reports instantly, and provide transparent audit histories that reduce the cost of proving compliance. In an environment where enforcement is accelerating, these vendors are becoming an essential part of the financial stack rather than a discretionary add-on.
Cross-cutting forces that will shape winners and losers
- Regulation here do not necessarily have to mean constraint because it is also a moat. DORA, PSD2 maturation and local licensing complexity raise the cost of failure and increase the value of compliant platforms.
- At the end of the day, data wins. The best underwriting, routing and liquidity products will be those that convert payments, invoices and behavioural signals into real risk and revenue insights. Open banking remains an enabler, but actionable datasets built inside vertical platforms will be the strategic advantage.
- Operational resilience and third-party vendor transparency will be table stakes. Regulators are watching cloud providers and critical tech suppliers, and they can name and supervise them directly. Expect concentration around trusted infrastructure providers and tighter scrutiny of cross-border cloud set-ups.
- Margin pressure in payments will accelerate innovation in value-added services such as FX hedging, reconciliation, working capital and not pure payments alone. Macro trends in payments revenue also matter for incumbents’ ability to compete.
What investors and founders should do now
Across the ecosystem the takeaway is the same: prioritise resilience, compliance and data control over cheap growth signals. Do diligence on operational resilience, licence posture and data access because a model that looks cheap on customer acquisition can become a compliance trap. Embed DORA readiness from day one, build local settlement and FX options, and turn product and payments data into underwriting signals rather than treating bank partnerships as commodity plumbing. And when buying these services insist on live SLA performance and verifiable audit trails so vendors are provably resilient and regulator-ready.
Conclusion
Europe’s banking stack will continue to unbundle into vertical, API-first primitives including embedded finance, treasury controls, B2B rails, licensed BaaS, and RegTech — and the firms that combine deep vertical distribution, a strong regulatory posture, and operational resilience will capture the lion’s share of the new banking economics.
