Financial technology firms that previously benefited from high interest rates are now being tested as global rates begin to decline, raising questions about the sustainability of their revenue models in 2025.
Main Data: Net Interest Income Under Pressure
After initially struggling during the 2022 interest rate hikes, fintechs saw a rebound as higher rates increased net interest income. In 2024, firms like Robinhood, Revolut, and Monzo reported notable profits driven by interest income growth. Robinhood posted $1.4 billion in profit, with net interest income rising 19% to $1.1 billion. Revolut’s net interest income grew by 58%, boosting profits to £1.1 billion. Monzo turned its first annual profit with a 167% surge in net interest income.
Context: Risks of Falling Rates
Now, declining benchmark interest rates in 2025 are raising concerns about fintechs’ heavy reliance on interest-based income. Analysts suggest this shift will test the durability of their business models. In the U.K., ClearBank reported a £4.4 million pre-tax loss due to a shift from interest to fee-based revenue and expansion costs in the EU.
Expert Opinions on Fintech Strategies
“An environment of falling interest rates may pose challenges for some fintech players with business models anchored to net interest income.”
– Lindsey Naylor
“Lower rates may expose vulnerabilities — but they may also highlight the adaptability of others with broader income strategies.”
Future Outlook: Diversification as a Buffer
Some fintechs are already pivoting. Revolut now offers trading services and plans to launch mobile plans in the U.K. and Germany. Bunq, which serves digital nomads, increased its profit by 65% in 2024 and emphasizes a mix of subscriptions, fees, and interest.
“Neobanks with a diversified top line are better positioned to manage the transition.”
– Barun Singh
As interest rates decline, will the fintechs that thrived on net interest income be able to pivot fast enough — or will only those with diversified models emerge stronger?
