EYE ON: Navigating Fintech Growth: Compliance, Partnerships & the Regulatory Landscape

About Episode 34 –Navigating Fintech Growth: Compliance, Partnerships, and the Regulatory Landscape with FS Vector’s Trevor Tanifum

In this episode of the FinWise EYE ON: podcast, hosted by Sarah Grotta, Deputy Chief Fintech Officer at FinWise Bank, the focus is on the current environment for innovative fintechs in the U.S. Sarah is joined by Trevor Tanifum from FS Vector, a firm that helps fintechs with compliance and becoming ‘bank ready.’

Trevor explains the three practice groups within FS Vector: advisory, licensing, and advocacy. The discussion covers the day-to-day activities of advising fintechs, the intricacies of partnering with banks, and the importance of presenting a well-prepared compliance framework to avoid risks.

What You’ll Learn:

1. The Three Pillars of Fintech Success: Advisory, Licensing, and Advocacy.
2. Compliance: The Make-or-Break Factor for Fintech-Bank Partnerships.
3. The Regulatory Environment: Is It Really Getting Easier?
4. The Challenge for Early-Stage Fintechs.
5. Looking Ahead: Mergers, Acquisitions, and Market Trends.

Navigating the Regulatory Landscape: Key Insights for Fintechs Partnering with Banks.

The fintech industry continues to evolve rapidly, with startups and established players alike seeking innovative ways to launch and scale financial products. In a recent episode of the FinWise EYE ON: podcast, Sarah Grotta, Deputy Chief Fintech Officer at FinWise Bank, sat down with Trevor Tanifum, Managing Principal at FS Vector, to discuss the current environment for fintechs in the U.S. – especially those looking to launch or pivot their business models.

The Three Pillars of Fintech Success: Advisory, Licensing, and Advocacy.

FS Vector, as Trevor explains, operates across three main practice groups: advisory, licensing, and advocacy. The advisory team helps fintechs solve regulatory and compliance challenges to get products into the hands of customers. The licensing team assists companies in acquiring state and federal licenses, while the advocacy team works in Washington, D.C., advancing fintech interests at the policy level.

For fintech founders, the advisory process is hands-on and dynamic. Trevor spends his days consulting with founders and product leads, helping them identify suitable partner banks and navigate the complex compliance landscape. Whether a fintech is focused on consumer payments, lending, or commercial services, finding the right bank partner is crucial – and each bank has its own business model, pricing, and technology stack.

Compliance: The Make-or-Break Factor for Fintech-Bank Partnerships.

One of the podcast’s central themes is the importance of compliance readiness. Banks are increasingly selective about which fintechs they partner with, prioritizing those who demonstrate robust compliance programs and a genuine willingness to collaborate. As Sarah notes, fintechs that come prepared – having done their regulatory homework – get to market much faster than those who rely solely on generic advice or AI tools.

Trevor emphasizes that banks, even the most innovation-forward, must protect their regulatory posture and charter. Fintechs must ensure they do not introduce undue risk to their partner banks. This means being able to grow safely, minimize customer complaints, and avoid issues like unfair, deceptive, or abusive acts and practices (UDAAP).

The Regulatory Environment: Is It Really Getting Easier?

A key question addressed in the podcast is whether the regulatory environment for fintechs is becoming more favorable. Trevor clarifies that while changes in administration can affect policy and rulemaking, the core concerns of bank examiners remain consistent. Even in periods of “lighter regulatory touch,” banks are not more lax about compliance, especially regarding anti-money laundering (AML) programs, customer onboarding, and complaint management.

Interestingly, Trevor points out that fewer enforcement actions in recent years may be more a result of resource constraints at regulatory agencies than a true shift in enforcement priorities. For fintechs, this means that diligence lists and compliance requirements from banks remain as rigorous as ever.

The Challenge for Early-Stage Fintechs.

The podcast highlights a growing trend: banks are competing for a smaller pool of mature fintechs with proven compliance and risk management capabilities. This shift is a direct result of previous waves of enforcement actions, which have led banks to de-risk their partner programs. As a result, early-stage fintechs – especially those without significant funding – face a tougher environment when trying to launch new products.

Banks invest substantial resources in onboarding fintech partners, and monthly minimums often reflect the cost of engineering, risk, and compliance teams. For fintechs, this means that getting to market is a “heavy lift,” requiring not just a great idea but also sufficient runway and financial backing.

Looking Ahead: Mergers, Acquisitions, and Market Trends.

Given the challenging environment, the podcast explores whether rollup strategies or acquisitions might help struggling fintechs find a path forward. While large-scale acquisitions are happening – such as Stripe acquiring Bridge – early-stage fintechs without a product in market may not be attractive targets for mature companies.

The conversation also touches on emerging trends, such as the growing interest in stablecoin use cases for cross-border payments and treasury management, as well as the rise of agentic AI-driven banking solutions.

The Way Forward.

For fintech founders, the path to launching and scaling in today’s market is more complex than ever. Success hinges on compliance readiness, a collaborative attitude toward bank partnerships, and a clear understanding of the regulatory landscape. As banks and regulators continue to raise the bar, fintechs must invest in robust compliance programs and strategic partnerships to thrive in this competitive space.