Fintech is in its empire-building era

The “Letter from the Editor” is a biweekly series of exclusive insight and opinion-driven analysis from Tearsheet’s Managing Editor Sara Khairi, connecting ideas, questioning assumptions, and tracking shifts across both mature and emerging trends in financial services.

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Issue # 15

For a while, fintech’s clearest path to relevance was to take a piece of the banking relationship, whether payments, cards, savings, or small business lending. The pitch was usually some version of the same idea: financial services had become bloated, expensive, and inconvenient, and a focused technology company could take one part of the experience and rebuild it from scratch. This was fintech’s great unbundling story.

Today, some of the biggest fintechs are building out – they want the bank charter, deposits, payments infrastructure, geographic footprint, and customer base. And increasingly, they want other banks and fintechs.

It’s fair to call this fintechs’ empire-building era, and we’re already seeing it play out across international markets. U.S.-based Chime wants to own the bank that has sat underneath its business for more than seven years. U.K.-based Revolut has secured conditional approval for a U.S. national bank charter. London-based consumer payments and credit fintech Zilch bought a Lithuanian bank and is now preparing for a possible IPO. And this week, Brazilian Nubank emerged as a potential buyer of London-headquartered Monzo, in what would be a cool combination of two of the world’s better-known digital banking franchises.

These developments suggest that fintech’s first phase – let’s build a better financial product – is giving way to a second question: What happens when you’ve built the product and decide you want to own more of the engine and support pillars around it?

The fintech paradox

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