The shifting regulatory environment is prompting new discussions among financial institutions and FinTechs, as the landscape is expected to ease some constraints. With regulatory pauses in place, financial firms are reconsidering how they approach partnerships and innovation. FinTech companies, particularly those focused on consumer services, anticipate a more conducive setting for market entry and expansion. As financial institutions evaluate their strategies, industry leaders are weighing the impact of these changes on technology investments and operational priorities.
Regulatory uncertainty has been a recurring issue for FinTechs, with previous administrations taking varied stances on financial oversight. In earlier years, stricter regulatory measures posed barriers for emerging financial technology firms, making it difficult for new entrants to establish themselves. The current expectation of a more relaxed regulatory environment represents a shift from those previous policies, creating new opportunities for firms like Splitit to engage with banks and merchants in different ways.
How Will Financial Institutions Adapt?
Financial institutions may take a cautious approach, assessing how these regulatory adjustments influence their business strategies. Splitit CEO Nandan Sheth noted that banks will likely be more receptive to collaborations with FinTechs, allowing for new technological integrations. He emphasized that companies operating in this space must develop adaptable strategies, ensuring they are not caught off guard by regulatory shifts.
“Unless you ‘stage’ potential changes, you could be blindsided — and by the time you start doing the work that you needed to do, it’ll be too late” to seize on new opportunities, Sheth explained.
What Role Will Technology Play in FinTech Growth?
Artificial intelligence and machine learning are expected to play central roles in the next phase of FinTech development. These technologies will improve personalization and facilitate real-time financial services, enhancing user experience. Automation is also anticipated to help financial firms optimize operations, increasing efficiency in customer interactions. Sheth mentioned that FinTech firms leveraging these tools will likely gain a competitive edge in an evolving financial services ecosystem.
“More powerful personalization will be powered by AI and machine learning … and personalization is going to happen at lightning speeds where you couldn’t possibly do it before,” Sheth stated.
One emerging trend is the concept of a “FinTech dashboard,” which could consolidate multiple financial services into a single interface. Consumers currently manage multiple financial applications, and a unified platform could simplify their interactions with banks and other financial entities. Industry participants are exploring ways to develop and implement such systems, with potential involvement from aggregators or new entrants in the sector.
Splitit continues to evaluate its approach to innovation, taking a staged method to technology investment. Sheth acknowledged that the company is unlikely to allocate its full innovation budget in the initial months of 2025, opting instead for a gradual investment strategy based on evolving market conditions.
External factors, such as inflation and market volatility, are also influencing decision-making across financial institutions. Many banks are delaying new technology deployments, monitoring economic conditions before making substantial commitments. The ongoing evaluation of return on investment and potential risks will shape how financial services firms approach digital transformation in the coming years.
While regulatory shifts present opportunities, companies must balance strategic growth with risk management. The financial services industry remains dynamic, and firms that successfully navigate both regulatory changes and technological advancements will be best positioned for long-term success. Decisions made now regarding partnerships, technology adoption, and investment allocation will shape the competitive landscape in the years ahead.
