Converge and thrive – where technology and finance meet

The financial and technology sectors account for a substantial share of global equity market indices and investors’ portfolios. Increasingly though, the boundaries between the two are dissolving, creating potential opportunities for investors.

In recent times, we have seen technology companies move into finance, while financial institutions are becoming technology platforms, and artificial intelligence (AI) is accelerating both trends.

Financial services-oriented technology (what we call fintech) is a crucial area for how markets grow, how companies compete, and how consumers transact. Fintech is an industry that generates more than $500 billion in annual revenue, with payments representing roughly 44% of that total. Digital payments continue to grow faster than traditional banking, while digital-first banks and platform businesses are steadily taking market share from incumbents.

There are two distinct but increasingly connected growth engines. In technology, the immediate drivers are AI adoption, cloud infrastructure and semiconductor demand. In fintech, growth depends more on customer acquisition, transaction volumes, and the expansion of financial products. Yet AI is becoming the bridge between them: it improves the infrastructure on which digital finance runs while also changing how financial products are designed, distributed and used.

Tech and financial services make up two thirds of global equity market value

Source: Investec Investment Management, Bloomberg, 30/06/2026
 

Why this investment boom looks different

Every investment boom invites comparisons with earlier periods of technological change. The current build-out of AI infrastructure recalls the booms in railways, electrification and the internet. But there is an important difference. In many previous infrastructure cycles, supply outpaced demand. Today, demand for computing capacity often exceeds available supply. New data-centre capacity can be absorbed quickly, reducing one of the traditional risks of large-scale capital investment.

The first beneficiaries are therefore the ones you’d expect to see: semiconductor manufacturers, cloud providers and hyperscale infrastructure businesses. Their growth since the emergence of generative AI has been exceptional, and industry revenue expectations continue to rise from already elevated levels. This doesn’t mean every AI-related investment will succeed, or that valuation is irrelevant. It does suggest, however, that we are closer to the beginning of the adoption curve than the end.

What makes this cycle particularly compelling is the speed of monetisation. New AI-enabled businesses can form, scale and reach profitability far more quickly than companies built during earlier technology waves. AI is already producing measurable commercial returns, especially in software development, customer service, marketing and data analysis.

Payments dominate the fintech space

Source: Investec Investment Management, Bloomberg, Boston Consulting Group, 11/09/2026

 

Payments are profitable too

Source: Investec Investment Management, Bloomberg, 11/09/2026

Why scale matters more than ever

The rise of AI also reinforces a broader concentration of corporate power. In the mid-1990s, the world’s 10 largest companies represented roughly 2% of global GDP; by 2025, that figure was approximately 25%, with technology groups dominating the list. Modern platform businesses combine global reach, network effects, high margins, vast datasets and formidable capital resources. Some leading technology companies generate operating margins above 60%, a level far removed from the single-digit margins of many corporate leaders three decades ago.

We expect scale to matter even more from here. Large organisations can devote larger budgets to AI infrastructure, talent and product development. In financial services, smaller institutions face pressure from both well-funded incumbents and fast-growing fintech challengers. That is likely to encourage further consolidation as businesses seek the scale needed to keep investing.

Customer ownership is equally important. Companies such as Sea, Mercado Libre and Grab have used relationships created through e-commerce and digital platforms to move into payments, lending, savings and investments. Nubank and Revolut have followed similar paths, starting with relatively simple offerings and expanding into broader financial ecosystems. They follow a simple strategy: win the customer relationship first, then use data and trust to provide more valuable services.

How AI agents are overturning customer inertia

The next disruption may come from AI agents embedded in email, calendars, shopping platforms and financial applications. These assistants could compare prices, find alternatives, manage subscriptions and eventually execute transactions. If that happens, one of the most durable advantages in financial services — customer inertia — may weaken. Switching a bank account, insurer or subscription provider becomes easier when an intelligent agent handles the administrative burden.

This prospect creates opportunities for businesses offering genuine value, but it’s also a major threat to companies that rely on friction to retain customers. The competitive advantage of the future may belong less to the provider with the stickiest process and more to the one that an AI agent judges to offer the best combination of price, service, security and convenience.

Trust remains the constraint. Consumers may accept AI-generated research and recommendations long before they are willing to give an autonomous system authority to spend their money. Therefore, liability, payment verification, privacy and consumer protection need to evolve alongside agent-based commerce. Adoption will depend not only on what the technology can do, but on who is accountable when it fails.

There are social and investment risks too. AI is already raising revenue per employee in parts of the technology sector, particularly where coding and other repeatable knowledge tasks are involved. That may restrain hiring and make entry into some professions more difficult. Regulation, privacy concerns, labour-market disruption and valuation volatility are all factors to think about when considering investment in the sector.

Broadly optimistic, but selectivity is crucial

Despite this, we are broadly optimistic. Technology and fintech remain among the most significant long-term structural opportunities in global markets. Investors should, however, resist treating them as a single indiscriminate trade. The winners are likely to be businesses with scale, trusted customer relationships, proprietary data, strong balance sheets and a credible ability to convert AI investment into earnings.

The convergence of technology and finance is already changing market leadership and competitive behaviour. The key is to identify those companies that have the infrastructure, trust and strategic discipline to turn this transformation into durable value.