Fintech was once treated primarily as a source of disruption for traditional banks. That distinction is becoming harder to maintain.

Digital payments, mobile banking, artificial intelligence, real-time transfers and new lending platforms have changed what consumers and businesses expect from financial institutions. At the same time, commercial banks have adopted many of the same technologies, partnered with fintech companies and, in some cases, acquired them.

The result is a financial services market where the competitive divide is increasingly less about banks versus fintech and more about which institutions can combine technology, trust, distribution and financial infrastructure most effectively.

The next several years will likely accelerate that convergence.

The Current Fintech Landscape

Fintech covers a broad range of companies using technology to deliver or improve financial services. Major categories include:

  • Digital banking and neobanks
  • Payments and money transfers
  • Consumer and business lending
  • Credit cards
  • Investment platforms
  • Financial management software
  • Cryptocurrency and stablecoins
  • Artificial intelligence
  • Fraud detection and identity verification
  • Business banking and expense management

Several companies illustrate how large the sector has become.

Nubank has grown from a Brazilian credit card startup into one of the world’s largest digital financial platforms. According to its 2025 annual filing, Nubank finished the year with 131 million customers across Brazil, Mexico and Colombia. In Brazil, it became the country’s largest private financial institution by number of customers.

Revolut has similarly expanded beyond its original money-transfer and foreign-exchange products. Its 2025 annual report says the company now has more than 80 million retail customers globally, while customer balances increased 66% during 2025. Revolut is also expanding banking licenses internationally and has applied for a U.S. national banking charter.

Other major fintech companies occupy narrower but influential positions. Stripe provides payments infrastructure to businesses. Klarna helped popularize buy now, pay later financing. Block combines merchant payments, Cash App and other financial products. PayPal and Venmo have changed how consumers expect to transfer and spend money digitally.

Why Are Some Fintech Companies More Successful Than Others?

Technology alone does not explain fintech success.

The strongest companies tend to solve a specific customer problem and then expand from that initial position.

Nubank entered markets where many consumers faced high fees, cumbersome banking experiences and limited access to credit. Its digital model lowered servicing costs while its customer base created opportunities to expand into deposits, lending, payments and other products.

Successful fintech companies also tend to share several characteristics:

  • Simple digital onboarding
  • Lower or more transparent fees
  • Strong mobile experiences
  • Rapid product development
  • Effective use of customer data
  • Products designed around specific customer frustrations
  • Ability to expand from one product into a broader financial relationship

The companies that struggle often face the opposite problem. Customer acquisition can be expensive, financial regulation creates barriers to expansion, and a popular app does not automatically create a profitable financial institution.

This is one reason the boundary between fintech companies and banks is narrowing. Fintech firms increasingly want banking licenses, deposits and broader financial relationships, while banks want the technology and customer experiences that made fintech companies competitive.

How Fintech Has Changed Traditional Commercial Banks

The most visible impact of fintech may be the change in customer expectations.

Consumers who can open an account or transfer money in minutes through a fintech app are less tolerant of slow onboarding at a traditional bank. Businesses accustomed to real-time software expect similar capabilities from treasury and payment providers.

Commercial banks have responded by investing in:

  • Mobile and online banking
  • Artificial intelligence
  • Digital account opening
  • Real-time payments
  • Digital wallets
  • Automated fraud detection
  • Personalized financial tools
  • Blockchain and tokenized payments
  • Fintech partnerships and acquisitions

The response is not simply defensive. Large banks have resources fintech companies often lack, including established customer relationships, regulatory expertise, deposits, lending capacity and enormous payment networks.

The following cases show four different ways banks are using those advantages.

Case Study #1: JPMorgan Chase Builds Fintech Capabilities at Scale

JPMorgan Chase shows how a traditional commercial bank can respond to fintech by investing heavily in its own technology while retaining its physical banking network.

According to JPMorgan Chase’s 2025 annual report, the company had approximately 75 million active digital customers, including 61.7 million active mobile customers. Total payments volume reached $7 trillion, and 82% of non-card payments were digital.

The bank has also continued developing products that compete with fintech alternatives. It has expanded digital payments, introduced installment-payment options and participated in Paze, a digital wallet developed by Early Warning Services. Chase also plans to use stablecoin technology to support international transfers through Zelle.

At the same time, JPMorgan has not abandoned branches. It operated more than 5,000 branches in 2025 while continuing to expand into new U.S. markets.

What Worked

JPMorgan treated fintech as a change in financial infrastructure and customer expectations rather than a reason to discard the traditional banking model.

Its credit card sales market share increased from 15% in 2005 to 24% in 2025, while payments volume and mobile usage grew dramatically.

The lesson is that digital and physical banking do not necessarily compete with each other. A large bank can use technology to make an existing customer relationship easier to manage while retaining branches for services where customers still value human interaction.

Case Study #2: Bank of America Turns Digital Banking Into the Default

Bank of America offers a different example. Rather than creating a separate fintech brand, it has increasingly moved everyday banking activity into its existing digital ecosystem.

In the second quarter of 2026, Bank of America reported 50 million active digital banking users. Approximately 80% of its households were actively using digital platforms, and 70% of sales were digitally enabled, according to the bank’s second-quarter results.

Its virtual financial assistant, Erica, had 24.6 million active users during the quarter. Meanwhile, 25.5 million customers actively used Zelle and completed 495 million transactions worth $160 billion.

The same strategy extends into commercial banking. Bank of America’s CashPro platform serves more than 35,000 corporate and commercial clients. In 2025, those clients approved a record $1.2 trillion in payments through the CashPro mobile app, according to Bank of America’s digital banking statistics.

What Worked

Bank of America integrated fintech-style features into the primary banking relationship rather than forcing customers to choose between a traditional bank and a digital experience.

The scale of Zelle, Erica and CashPro illustrates an important competitive advantage for incumbent banks: once a digital tool is useful, an established institution can distribute it across tens of millions of existing relationships.

Case Study #3: Citi Uses Tokenization for Commercial Payments

Fintech is also changing commercial and institutional banking, where payment delays and banking cut-off times can create significant operational problems.

Citi has responded by combining its traditional clearing network with blockchain technology.

In July 2026, Siam Commercial Bank became the first financial institution to go live with Citi’s integrated 24/7 USD Clearing and Citi Token Services solution. The system combines round-the-clock U.S. dollar clearing with tokenized commercial bank deposits to enable near-real-time cross-border payments.

The first live transaction moved funds from a Citi account in London to an account at Siam Commercial Bank in Thailand during a U.S. holiday weekend. Citi’s 24/7 clearing network connects more than 300 financial institutions across more than 50 markets.

What Worked

Citi did not respond to blockchain-based payments by attempting to replace the banking system. It incorporated blockchain technology into the regulated banking infrastructure it already operates.

That approach addresses one of fintech’s strongest competitive advantages, always-on financial activity, while preserving the compliance, liquidity and institutional relationships of a global commercial bank.

For traditional banks, this may become an increasingly important strategy: adopting the useful capabilities of fintech without abandoning the infrastructure that gives banks their competitive position.

Case Study #4: Capital One Acquires the Technology

Capital One demonstrates another response to fintech competition: buy capabilities that would take years to build.

Capital One completed its acquisition of Discover in May 2025, gaining control of a global payments network rather than remaining solely dependent on outside card networks. Its 2025 annual report describes the transaction as part of a longer strategy to build a technology-driven banking and payments company.

Then it went further.

In April 2026, Capital One completed its acquisition of Brex, an AI-focused fintech platform that combines corporate cards, expense management, payments and financial software. Capital One described the combination as bringing together Brex’s technology with its own balance sheet, underwriting capabilities and customer reach. The Brex acquisition gives Capital One an immediate position in technology-driven business payments and spend management.

What Worked

Capital One recognized that fintech competition can be addressed through acquisition as well as internal development.

Discover gives it greater control over payment infrastructure. Brex gives it technology and expertise in a category where fintech companies had created a more modern product experience for businesses.

This strategy also illustrates the convergence underway across financial services. A traditional bank can increasingly become a payments network, software provider and fintech owner at the same time.

What Commercial Banks Need to Survive and Thrive

The four cases use different strategies, but several patterns emerge.

Commercial banks that remain competitive will need to:

  • Make digital banking a core product rather than a secondary channel
  • Use artificial intelligence where it improves service, fraud detection and operations
  • Support faster and increasingly real-time payments
  • Simplify account opening and other customer processes
  • Continue modernizing legacy technology
  • Partner with fintech companies when building internally is inefficient
  • Acquire technology or platforms when the strategic case is stronger than partnership
  • Preserve trust, regulatory compliance and security as competitive advantages

Banks also need to decide where not to compete.

Not every fintech trend needs to become a bank product. A new technology matters when it changes customer expectations, threatens an important revenue stream or creates a better way to deliver an existing financial service.

The Next Three to Five Years

Over the next three to five years, the distinction between fintech companies and traditional commercial banks will continue to weaken.

Fintech Companies Will Become More Like Banks

Companies such as Revolut and Nubank are expanding into deposits, credit and broader banking relationships. As they grow, they also inherit more of the regulatory, risk-management and infrastructure requirements historically associated with banks.

Banks Will Become More Like Technology Companies

Artificial intelligence, automated financial management and real-time payments will become increasingly normal features of commercial banking.

The competitive question will move from whether a bank offers digital services to how effectively those services work.

Payments Will Become More Immediate

Real-time payment systems, tokenized deposits and stablecoins are creating pressure for financial activity to operate beyond traditional banking hours. Citi’s 24/7 clearing system and JPMorgan’s work with tokenized payments already point in this direction.

Acquisitions and Partnerships Will Continue

Capital One’s acquisitions illustrate why banks may increasingly purchase fintech capabilities rather than recreate them internally. Fintech companies, meanwhile, benefit from bank balance sheets, regulatory expertise and distribution.

Trust Will Remain a Bank Advantage

Fintech companies can often move faster, but commercial banks retain advantages that are difficult to reproduce quickly: large deposit bases, regulatory experience, established brands and long-standing customer relationships.

The institutions most likely to thrive will combine those advantages with the speed and usability consumers increasingly expect from technology companies.

The Future Is Convergence

Fintech has clearly disrupted traditional commercial banking, but the outcome is not simply fintech replacing banks.

Nubank and Revolut show that technology companies can build banking relationships at enormous scale. JPMorgan Chase and Bank of America show that incumbent banks can absorb digital technology and distribute it across existing customer bases. Citi shows how new payment technology can be incorporated into traditional banking infrastructure. Capital One shows that banks can acquire fintech platforms and payment networks outright.

The next phase of competition will be shaped by convergence.

Fintech companies will continue becoming broader financial institutions. Banks will continue becoming more technology-driven. The strongest companies on either side will increasingly resemble each other.

For commercial banks, surviving that transition will require more than adding digital features to traditional products. The opportunity is to combine the speed, convenience and product development of fintech with the trust, scale and infrastructure that banks already possess.