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# Fintechs and BaaS companies shift banking strategies to improve compliance, scalability

More tech innovators see value in long-term stability, national reach, and rigor in compliance

By Luke Atherton, Executive Director, Technology Banking Group, Wells Fargo

For more than two decades, fintechs and banking-as-a-service (BaaS) companies have changed how consumers and businesses operate. Their solutions make moving money, accessing credit, investing, and countless other activities fast and convenient by embedding these opportunities directly into the user experience.

This steady flow of innovation saves clicks, attracts customers, and generates significant revenue. The sector continues to grow steadily. Total global funding in 2024 was $28 billion, and global fintech revenues grew 21%. U.S. fintech companies represented about half of this momentum.

High profile issues prompt fintechs to re-evaluate bank relationships

What is changing, however, are the ways that fintechs evaluate the financial institutions they leverage behind the scenes. As the market matures, there’s more emphasis on stability, scalability, and compliance. There’s a growing understanding that national banks with established infrastructure and proven processes can deliver impressive results for fintechs at all stages.

Regulatory rigor is especially critical given the high profile effects of lax compliance. Few consequences will be greater to a fintech’s sales, customer retention, revenue, and brand reputation than a “cease and desist” order from the government.

There are numerous other advantages for fintechs backed by a strong bank. These benefits include:

- A trusted compliance environment that potentially reduces risks
- Established systems and processes that help make it easier to scale
- Proven platforms and APIs that streamline transactions and reporting
- Expertise, analytics, and experience across industries to fuel sales and growth

In best-case scenarios, the financial institution can even transform from “provider of services” to “fintech customer.” Banks now see BaaS providers and fintechs as potential collaborators more than competitors. Many offer fintech services to their own clients, or leverage their technology to improve bank operations. It’s a win-win that generates new opportunities for all involved.

Critical conversations for fintechs and banks

As your organization considers what’s next for profitable, sustainable growth, it’s imperative to have the right financial institution by your side.

Start with candid conversations around these crucial topics:

1. Regulatory compliance. First and foremost, look for a bank that maintains robust processes to adhere to Know Your Customer (KYC), anti-money laundering (AML), and other regulations that govern customer deposits and money movement. Be prepared to pull parts of these critical tasks in-house rather than outsourcing, which helps improve control and reduces risk. It’s also smart to work directly with your bank, rather than using another fintech as an intermediary. While it may seem like unnecessary effort, putting the discipline in place early will pay off long-term through peace of mind and uninterrupted operations.
2. Technical capabilities. Whether you process payments, invest funds, or offer credit to customers, these transactions need to move seamlessly and securely between your platforms and your bank’s systems. That takes more than just an API connection—there’s also much to gain from the infrastructure built by banks for their own use. Look for a bank with a range of modern developer tools, the capacity for high volume transactions, and flexible tracking and analytics. All improve efficiency for fintech teams and make it easy to scale.
3. Industry experience. Banks with dedicated technology verticals will understand your market well. Those with broader sector coverage can share additional best practices, analytics, and emerging trends. For example, if your fintech lends to the ag industry, a well-rounded financial institution might provide sector trends, introductions, or specialized expertise to support your business.
4. Customer reach. Just like fintechs, financial institutions have certain niches where they excel. See how well your target audience—whether consumers, small businesses, global retailers, or non-profits, for example—corresponds to your bank’s footprint in that sector. Working with a diversified national bank can provide a competitive advantage in reaching more potential customers.

Expertise and support across the fintech lifecycle

While individual results could vary, two recent customer successes demonstrate the value of working together with transparency and trust.

A real estate investment firm moved 400 business accounts—each with a separate tax ID number—to WF. Their business model requires time-sensitive daily funds transfers via ACH and wires. They switched providers after concerns about their previous bank’s ability to manage growing payment volumes and regulatory needs. WF handled the high lift account onboarding, then helped the fintech navigate enhanced regulatory and compliance policies. Working with the bank’s experts, they created a payments and automation roadmap for long-term growth and high-touch service.

An early-stage fintech serving property managers turned to WF for coast-to-coast services and expertise. National coverage and knowledge of state-by-state rules was essential. They also wanted a bank with sophisticated payment capabilities and API connectivity. The startup worked with WF to automate the tenant refund process and establish a scalable platform for national expansion. Their new product supports thousands of renters and millions of dollars in deposits.

If you’re a BaaS or fintech innovator ready for what’s next, make sure your roadmap includes a right-sized financial institution that can support you today—and in the future.

S&P Global, www.spglobal.com/market-intelligence/en/news-insights/research/fintech-funding-falls-in-2024-but-mega-rounds-show-tentative-signs-of-optimism
Boston Consulting Group, web-assets.bcg.com/e8/4d/5eeb786b4aefbf6c7270ed4d0afe/fintechs-next-chapter-may-2025.pdf

WF Bank, N.A. Member FDIC.

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