So the Fed's talking rate cuts for 2025. What's that actually mean for traditional banks versus fintech players?

Here's the thing—when rates drop, borrowing gets cheaper. Banks usually see their net interest margins squeeze a bit since the spread between what they pay depositors and charge borrowers narrows. Not ideal for their bottom line, but they've weathered these cycles before.

Fintech? Different story. Lower rates could be rocket fuel. Think about it: cheaper capital means easier funding for startups, more appetite for venture deals, and consumers more willing to take on debt for payments or lending products. Companies offering alternative credit or embedded finance might actually thrive here.

But there's a flip side. Rate cuts often signal economic uncertainty. If the Fed's cutting because growth is slowing, that impacts loan demand across the board. Banks might tighten lending standards. Fintechs could see higher default rates if they've been aggressive with underwriting.

The real winners? Probably whoever adapts fastest. Traditional institutions with diversified revenue streams, or agile fintechs that can pivot products to match the new rate environment. Either way, 2025's shaping up to be a test of resilience for the entire financial sector.