The new administration is barely a month old, so it’s too soon to tell exactly what financial services regulation will look like. But with the pause on rulemaking and the overall pause on the Consumer Financial Protection Bureau in place, it seems like we’re headed into an age of regulatory relaxation.
And as Splitit CEO Nandan Sheth told Karen Webster, financial institutions (FIs) may be more open to new ways of thinking about their businesses, and where innovation fits into their near- and long-term roadmaps, which opens the doors to new partnerships with FinTechs.
For FinTechs, too, the competitive and regulatory landscapes are changing, “but it will be easier for new FinTechs to come to market, he said. No matter what happens this year and beyond, a few principles will never change, Sheth said as part of the “What’s Next in Payments” series on what it means to be a FinTech in 2025.
At the heart of a FinTech that’s servicing a consumer, said Sheth, key expectations of those firms include “simplification, personalization and the ability to take multiple relationships and manage them in one place.”
A FinTech Dashboard
Consumers juggle as many as half a dozen (or more) FinTech apps on their phones, which means that the simplicity mentioned above is sorely lacking. We’re likely headed toward a future where a “FinTech dashboard” will give consumers a single point of access through which to manage their banking and FinTech relationships “and put different relationships on one screen.” Those efforts may be spearheaded by an aggregator with integrations into multiple banks or a yet-unforeseen entrant into the FinTech realm. But more immediately, and for Splitit, which helps merchants and FIs offer credit card-based installment plans to consumers, there’s still a bit of wait and see in terms of allocating budgets for innovation and new projects.
“We’re not going to [allocate] 100% of the budget in the first two quarters of 2025,” he said, but in tandem with conversations with FIs, Splitit will build out a “lean framework” for technology in the new regulatory environment — a staged, rather than all-in approach.
“Unless you ‘stage’ potential changes,” he told Webster, “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. “It takes a lot of actors, money and time … to accelerate our growth trajectory and market share.” He added that 2025 will be a busy year for forward thinking FinTechs, but building the next beachhead will rest with executives making sure that they are looking around corners while getting ready for what comes next.
At the moment, there are other headwinds beyond regulatory uncertainty, said Sheth, noting inflation is a concern for all enterprises. Banks are taking a similar wait-and-see approach to new tech and initiatives as they measure returns on investment and the volatility tied to tariffs.
Scale and Optimizing FinTechs’ Value Proposition
Scale matters, and artificial intelligence (AI) and machine learning, along with deep automation, will optimize the value proposition of FinTechs, said Sheth, as FIs and merchants engage with the new layers of tech that are being enabled.
“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,” he said.
As he told Webster, “the ‘new age’ FinTechs that win will flatten the ecosystem — and in 10 years, payments and financial services are going to look very different.”