For much of the past decade, globalization was seen as the ultimate path to scale in fintech. A bigger map meant a bigger opportunity set (or so we thought). But the game has changed.
We witness regulatory fragmentation intensifying, embedded finance becoming more complex, and user behaviors diverging across regions. All this points at a recently introduced concept of deglobalization, which made the idea of simply copy-pasting a winning formula from one country to another is no longer viable.
In 2025 and beyond the trend will only persist, making success won’t favor those who expand the fastest, but those who expand the smartest. That means being local-first, not global-fast.
Copy-paste global expansion is obsolete
Too often, fintechs enter new markets without adapting their value proposition to local needs. They assume that what works in Germany will work in Brazil. Spoiler: it won’t. Regulatory requirements, user expectations, digital literacy levels — these variables are deeply local.
Unlike e-commerce or SaaS, fintech cannot scale outside the bounds of licensing and compliance. Skipping proper regulatory due diligence isn’t just a risk — it’s a shortcut to failure.
For instance, this was the case with N26. Although being a well-established neobank in the EU, the fintech app failed to expand to the UK. N26 launched in the UK in 2018 but left in 2020, blaming licensing problems caused by Brexit. However, the main problem was simple: the company didn’t plan well for new rules and didn’t adjust enough to the UK market.
Regulation isn’t a barrier — it’s a competitive edge
Given the example above, it becomes clear that regulation isn’t a hurdle to overcome; it’s a lever to pull. International frameworks like FATF or PSD2 are useful, but they barely scratch the surface. Each market has its own logic: what instruments are permitted, how KYC and AML rules are enforced, and what infrastructure is considered sufficient.
For example, India requires Aadhaar-based biometric verification, while Germany follows stricter BaFin video-identification protocols. A global approach to KYC simply doesn’t cut it. Understanding these details and building products around them — isn’t optional. It’s the only path to real lasting presence. Even at TOKEN2049 in Dubai this year, it was a hot-topic, and one of the loudest messages from the stage was clear: platforms must now prioritize transparency, user protection, and robust legal frameworks to remain competitive and trustworthy.
Fintechs that succeed in the next phase of global expansion will treat regulation as strategy.
This means:
Regional hubs > global sprawl
Having a single legal counsel for 180 countries is a relic of the past. Full market-by-market setups might be too heavy for most fintechs. But regional hubs are a smart middle ground. If you understand how Argentina works, you’re already ahead when it comes to Uruguay. That’s very different from jumping cold into Southeast Asia or the Gulf from Berlin or London.
I remember a friend who tried to handle Latin America expansion from a single office in the UK. He thought, “How different can Brazil be from Mexico, right?” Well, let’s just say that after some time, he ended up with a mountain of paperwork that looked like a jigsaw puzzle of tax codes and regulations. In the end, they set up a regional hub in São Paulo, and guess what? Turns out, locals actually do know how to figure everything out.
AI is your multiplier
None of this is to say expansion has to be slow or expensive. In fact, today’s fintechs have a game-changing advantage their predecessors didn’t: artificial intelligence.
People nowadays use AI for everything — from research and funnel design to vendor selection and market validation. Why spend weeks googling law firms in a new country when AI can shortlist the top 5 in minutes and explain how they work? AI helps automate most of the operational load: marketing, due diligence, compliance workflows, onboarding, daily ops.
In fact, trying to expand without AI in 2025 is like trying to build a bank with fax machines. And if a local competitor is using AI but you’re not, they’ll outpace you every time. Doesn’t matter how big your budget is — they’ll just move faster and with more precision.
According to research, almost 80 percent of the fintech companies actively use AI for their purposes. And I think that very soon this number can turn into 99 percent, given the opportunities that the technology offers.
Nevertheless, it’s also about building the right balance between run and change. Entering a new market is inherently a transformation initiative. Without a healthy ratio of stability (run) and innovation (change), businesses risk both burning cash and compromising existing operations.
Metrics matter — but vision wins
When a fintech plans to expand, what should lead the way? Metrics? Absolutely — ROI benchmarks, CAC/LTV ratios, and demand curves are critical inputs. But here’s the truth: dashboards don’t build strategies. Data is a compass, not a map.
However, the real differentiator is vision. Metrics will never tell you why a certain market holds strategic value or how to manage the grey zones.
Take M-Pesa, Africa’s most successful mobile money service and the region’s largest fintech platform. On paper, in this region, there was low card penetration, high cash usage, and a lack of financial institutions. But the team saw something else: a mobile-first population outpacing traditional banking. Now, M-Pesa is considered the most preferred way to send money across Africa.
So do your homework, and know who your customer really is. If your product targets high-net-worth individuals, there is no point launching in a market where that audience barely exists. Sounds obvious? You’d be surprised how many teams skip this.
Final thought: Scale with intent, not inertia
Expansion isn’t about chasing logos on a map. It’s about designing systems that flex with local truths. One regulatory misstep or cultural miss can undo years of work.
Think regionally. Build for compliance from the start. Use AI like it’s your co-founder. And always, always prioritize vision over vanity metrics. Because at the end of the day, growth without grounding is just noise.
In 2025, local focus is your competitive edge.
Arthur Azizov is a serial fintech entrepreneur and investor, founder of B2 Ventures, a private fintech alliance that empowers innovative ventures in financial infrastructure, digital banking, liquidity solutions, institutional brokerage, digital assets, and payment services.
With over 15 years of experience in fintech and financial markets, my focus is on developing cutting-edge, technology-driven solutions that empower brokers, exchanges, hedge funds, and proprietary trading firms worldwide.
At B2 Ventures, I bring together industry-leading companies, including B2BROKER, a global fintech company providing liquidity, trading technology, payment solutions, and brokerage infrastructure, and B2BINPAY, a comprehensive crypto payment ecosystem for businesses. I am dedicated to bridging traditional finance with digital assets, offering institutional-grade solutions that drive efficiency and scalability in the financial sector.
Looking ahead, I am focused on expanding our businesses into new regions, developing innovative products to meet the evolving needs of the global market, and launching retail-facing solutions to strengthen our position in emerging economies.
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Featured image: Joshua Rawson-Harris on Unsplash