Citi Says FinTechs Need to Win on These 3 Things

The strongest businesses are forged in the crucible of change.

That’s true for FinTech and financial services, where executives are finding themselves striving to keep pace with technological advancements while also facing intensifying demands for transparency and solvency.

The convergence of these challenges, navigating the dual pressures of innovation and regulatory scrutiny, is reshaping the very definition of what it means to be a FinTech or financial services company.

“The competitive landscape has shifted pretty dramatically in the last couple of years,” Will Artingstall, head of digital asset payments and eCommerce services at Citi Services, told PYMNTS during a discussion for the series “What’s Next In Payments: What Does It Mean to Be a FinTech in 2025?”

“It’s not just the old nature of FinTechs competing with FinTechs,” Artingstall said. “What you’re often now starting to see is neobanks entering the space. You’re seeing banks themselves offering more digital services.”

The crowded market is driving FinTechs to refine their value propositions, focusing on cost, speed and transparency, three pillars that Artingstall said are essential for differentiation.

“The ability to drive differentiation and operate and drive a value proposition that attracts consumers is a unique thing for every single FinTech that’s out there,” he said.

Scaling Smartly in a Saturated Market

Artificial intelligence (AI) is a transformative force in many industries, and FinTech is no exception. Artingstall described Citi’s approach to integrating AI, saying it’s not a “side project” but a core part of the company’s strategy.

AI’s potential in the FinTech sector spans compliance, automation and enhanced customer experiences. By automating routine processes and improving compliance mechanisms, FinTechs can streamline operations and reduce costs.

However, Artingstall cautioned against seeing AI as a silver bullet, comparing it to the earlier hype around robotic process automation.

“If you have a bad process, RPA doesn’t fix a bad process,” he said. “You still need to have a good fundamental process.

“We are making AI technology available to our colleagues in a thoughtful and measured way that allows us to assess the impacts and the benefits in real time of it,” he added.

For FinTechs, achieving scale remains a critical goal, particularly in a market with thousands of competitors. For Citi, collaborating with FinTech partners on solutions like Citi® Payments Express — a scalable, cloud-enabled commerce solution — has been central to fostering growth and driving efficiency.

“We’ve invested across the board in cross-border payments, domestic payments, and much of our banking-as-a-service capabilities to help support that scale-based activity,” Artingstall said, adding that the Citi Payments Express platform, operational in over 18 markets, reflects Citi’s commitment to meeting the demands of digital commerce.

Navigating Demographics, Regulations

While FinTechs have traditionally attracted millennials and Generation Z consumers, the appeal of app-based financial services is growing among older demographics as well, challenging companies to cater to a broader, more diverse audience while maintaining a competitive edge.

“There’s a big drive toward app-based transacting and app-based usage,” Artingstall said. “Most folks are going to tend to be multi-app driven … multi-platform usage is the way consumers view the world.”

“Mobile apps are also making it quite easy to select more than one provider, compare them in real time, then flip over into which one you would like,” he added.

As FinTechs innovate, they must also navigate a complex and evolving regulatory environment. This balancing act is particularly crucial as major regulatory changes loom in both the United States and Europe. FinTechs should adopt a proactive approach to compliance by understanding regulatory priorities, particularly around financial crime and financial inclusion, Artingstall said.

“In the past year, I think we’ve seen a huge amount of increased scrutiny around fin crime from regulators,” he said. “There’s been several regulatory actions that are targeting mitigating activities like KYC [know your customer] and AML [anti-money laundering] practices within financial companies.”

The upcoming transition from PSD2 to PSD3 and PSR1 in Europe is also a focus for FinTechs. These changes will likely introduce stricter standards and reduce exemptions, increasing the compliance burden on companies operating in the space. The challenge is not limited to Europe; in the U.S., the inconsistency between state and federal regulations adds another layer of complexity.

“There’s definitely a push that we’re seeing from multiple different bodies that are thinking about how to help support a more consistent approach when they’re thinking about the regulation within the U.S.,” Artingstall said.

Partnerships Drive Success

Looking ahead, partnerships between banks and FinTechs will likely play a role in the industry’s evolution, Artingstall said. Citi itself has adopted a co-creation model, working closely with FinTechs and other partners to develop tailored solutions. The focus on co-creating products ensures that solutions are not only market-ready but also closely aligned with client needs.

“We found significant success in that space,” he said. “Not only do we tend to find the deals are a little bit stickier, but they’re also a little bit larger in size and scale really well.”

As FinTechs continue to adapt to a rapidly changing market, their success will hinge on the ability to deliver cost, speed and transparency while balancing innovation with compliance, scaling effectively and delivering differentiated value.

“Overall, in our minds, it’s absolutely clear that those differentiators are the things to look for,” Artingstall said.