Fintech Fortunes Rise and Fall with Interest Rates

The surge in global interest rates during 2022 initially dealt a major blow to fintech companies. Their valuations plummeted as investors grew wary of their future growth.
Surprisingly, these higher interest rates began benefiting fintechs over time. Net interest income — the spread between lending and saving rates — started contributing significantly to their earnings.
Robinhood was among the standout beneficiaries. In 2024, it posted $1.4 billion in profit, thanks largely to a 19% year-over-year rise in net interest income.
Revolut also saw major gains, recording a 58% increase in net interest income that pushed annual profits to an impressive £1.1 billion, or $1.45 billion.
Monzo joined the profit ranks for the first time, reporting an annual profit by March 2024, helped by a staggering 167% rise in net interest income.
But as central banks begin cutting rates again, concerns arise. Fintechs leaning heavily on interest income could see their profits threatened in a lower-rate environment.
Bain & Company’s Lindsey Naylor warned that this scenario may expose weaknesses in certain fintech models, though those with diverse revenue sources may prove more resilient.
Robinhood still showed strength in Q1 2025 with $290 million in net interest revenue, but ClearBank struggled, swinging to a £4.4 million pre-tax loss last year.
ClearBank is shifting toward fee-based revenue while planning for future rate drops. Meanwhile, firms like Revolut are expanding services to cushion their income against market fluctuations.