As the end seemed near for fintech companies, things might have turned a corner. For years, they struggled with falling valuations and the collapse of venture-backed startups as the era of “easy money” left them high and dry. But now, things are starting to look up for businesses with their mind on money.

Fantastic fintech: Earlier this year, fintech firms began snapping out of a year-long stupor — reporting substantial revenues, record profits, and showing off new products. Investors are now taking their bets to the bank. This Week in Fintech’s TWIF Index, which tracks 15 publicly traded financial technology companies, is up 40% year-to-date — nearly double the returns of the Nasdaq-100 and S&P 500.

• The index was lifted by strong performances from buy now, pay later firm SezzleSEZL
  , neobank DaveDAVE
  , and NuNU
  , which are up 798%, 398%, and 79% YTD.
• Broker-dealers like RobinhoodHOOD
  and Interactive BrokersIBKR
  also saw gains due to increased retail trading activity, with their stocks rising 122% and 76% YTD.

Mind Your Money

Many publicly traded fintech enterprises have delivered banner performances this year but will still need to survive the gauntlet of earnings season, which will offer insights into what 2025 and beyond may hold for the industry. Some businesses are also waking up to the pitfalls of “renting a bank” or building technology on top of other institutions’ infrastructure.

• According to The Information, banking giant Wells FargoWFC
  abruptly exited the payments industry — putting fintech leaders SquareSQ
  , PayPalPYPL
  , and Stripe at risk of facing “service disruptions” in payment processing.
• At the same time, issues with banking intermediaries Evolve Bank & Trust and Synapse Financial recently froze user funds, and only last week were they able to return money to users after a month-long disruption.

Risks remain: If fintech companies cannot effectively manage the risks associated with third-party vendors — the backend facilitators that handle money, payments, stocks, and other assets for their users — they may find it more challenging to attract customers. This could lead to slower growth, a tougher path to acquisition, and higher operational costs, potentially derailing the sector’s recent recovery despite its current positive momentum.