Fintech’s Profit Rollercoaster: Rising and Falling with Interest Rates

In 2022, rising global interest rates initially spelled trouble for financial technology firms. Their valuations took a sharp dive as investors reassessed growth prospects in a more expensive borrowing environment.
However, what started as a setback turned into a surprising opportunity. Fintech firms began reaping benefits from increased net interest income, which is the gap between lending and saving interest rates.
Robinhood, Revolut, and Monzo all enjoyed major profitability boosts by 2024. Robinhood’s annual profit hit $1.4 billion, fueled by a 19% rise in net interest income.
Revolut’s profits surged too, climbing to £1.1 billion ($1.45 billion) thanks to a 58% rise in net interest income. Monzo also marked its first annual profit, a significant milestone.
But the tide may be turning. Interest rates are now on the decline again, prompting concerns about whether fintechs can sustain their earnings without high net interest margins.
Bain & Company's Lindsey Naylor noted the vulnerability of fintech models reliant on net interest income. As rates fall, these firms must prove the resilience of their business frameworks.
While Robinhood still reported a 14% annual rise in Q1 2025 net interest revenue, other fintechs, like ClearBank, showed signs of strain from shifting revenue sources.
ClearBank’s move from interest income to fee-based revenue led to a £4.4 million pre-tax loss, largely due to EU expansion costs and falling rates.
Many fintechs are adapting. Revolut, for instance, is branching into telecom services in Germany and the UK, showcasing a trend toward diversification to withstand economic fluctuations.