In a new white paper titled “The Fintech Revolution,” Jackie Reses W92 and co-authors Michael B. Gilroy, general partner at Coatue, and Saanya Ojha C16 W16, investor at Coatue, argue that the “transformation occurring in fintech is massive.” No surprise there, they say, but not only have they seen staggering growth in the sector over the past decade, there’s also tremendous opportunity still ahead. Reses, CEO of Post House Capital and former head of Square Capital, and her co-authors set out to develop “a playbook for founders and a framework for investors.” Here, they offer an overview of the five key changes you should expect to see in fintech in the future. (For much more, read the full “Fintech Revolution” report.)

1. New cohort of consumer-facing fintechs take over distribution

Consumer fintechs have captured significant attention with simplicity and elegance, and they have also eclipsed the scale of most banks. Moreover, the rise of fintechs infrastructure players has lowered the barriers to launching a consumer fintech company, adding to the proliferation of consumer-facing fintechs.

2. New entrants in the banking space become fast-growing sources of capital

New entrants are not obliged to spend millions on brand-building to compete with banks that have a large consumer presence, like BofA and Wells Fargo, as they can now rely on fintechs to scale distribution. This has allowed little-known regional banks to see explosive deposit and loan growth.

3. New categories of consumers are better served

We are seeing the beginnings of a more inclusive financial ecosystem as this explosion of consumer fintech players tap into the economic potential of heretofore underserved segments. Vertical neobanks – for instance, those targeting immigrants and thin-file consumers – are bringing new consumers into the financial fold with a focus on building long-term financial health.

4. New categories of B2B are eliminating friction

We expect that B2B fintechs will remove friction from the underserviced. We have long tolerated extensive settlement dates, costly FX, multiple payment methods, and complexity with international payments. We expect innovation to eliminate friction and invent elegant experiences similar to consumer-based ones.

5. Cryptocurrency will find use cases that enable broader market acceptance

We expect that cryptocurrency will enable payment systems to interoperate seamlessly and fiat will begin to replicate many features of crypto. Today crypto still feels like a solution in search of a problem, but that seems like a temporary concern as use-cases continue to evolve