Interest Rates Rise and Fall—But Can Fintechs Keep Up?

The global interest rate hikes of 2022 were initially disastrous for fintech firms. Skyrocketing rates led to declining valuations and investor skepticism across the financial tech sector.
Yet over time, fintechs began to reap rewards from the new interest environment. Increased net interest income turned what was once a headwind into a source of strength.
Robinhood was a standout performer, posting $1.4 billion in profit in 2024. The company’s net interest income grew 19% year-over-year to an impressive $1.1 billion.
Revolut also thrived with a 58% increase in net interest income, helping it reach £1.1 billion in profit. Monzo achieved its first annual profit after a 167% boost.
As rates begin to decline in 2025, concerns grow over whether fintechs can maintain profitability. Many built their earnings on rate-driven gains that may now evaporate.
Lindsey Naylor of Bain & Company explained that falling interest rates might expose vulnerabilities in fintechs overly reliant on net interest margins, urging diversification for long-term success.
Robinhood appears to be holding steady, reporting a 14% year-over-year gain in net interest revenue for Q1 2025. But ClearBank told a different story.
The UK-based ClearBank faced a £4.4 million pre-tax loss as it pivoted away from interest income toward fees, while also investing heavily in EU expansion plans.
To hedge against rate volatility, fintechs like Revolut are adding services such as crypto and mobile plans. Diversified business models may prove essential in the years ahead.