Dear Friends,

Last Spring we began publishing this monthly newsletter for FS Vector’s Advisory Team’s network to complement the newsletters published by FS Vector’s Advocacy (Government Affairs) Team.

This newsletter has proven to be an invaluable platform for sharing trending stories and highlighting other businesses and professionals in our network that we frequently collaborate with. As we step into 2025, I wanted to use this platform to reflect on the road ahead for our industry and our shared aspirations. The past year has been full of challenges, and yet, it has also provided clarity about where fintech is headed. 

The message I’d like to convey as we begin this new year is one of optimism—but with a firm dose of realism. 

The signs for 2025 are promising on several fronts. Fundraising opportunities are likely to be strong, as capital continues to flow into fintech via venture capital, private equity, and public markets. Additionally, we anticipate a favorable regulatory landscape in terms of significantly less negative attention by the CFPB and the Federal banking regulators and significantly more access to licenses and charters. While this may take a number of months to come to fruition, we hope this attracts financial institutions and other companies who have remained on the sideline as this played out over the past few years. 

But let me be clear: neither capital nor regulatory tailwinds will substitute for flawless execution across the ecosystem. Fintech related activity still represents a single digit percentage of payment volume, lending, and deposits in the United States. Moreover, the industry is supported by a very small number of banks, many of which are currently under a formal or informal enforcement action by their primary Federal regulator. We’ve seen a number of scaled fintechs abruptly shut down as the year came to a close and, last, the industry continues to lack control over the fintech narrative in D.C., state capitals, and on Wall Street.

Thus, the fintech ecosystem will only thrive this year if we can turn these opportunities into action and mature as a collective industry. Success in 2025 will be defined not by intention, but by execution—the ability to launch new products efficiently and effectively, to strategically control the fintech narrative within the incoming administration and congress, and to adapt in real time to shifts in innovation. Above all, we must uphold the highest standards of professionalism in everything we do.

FS Vector’s mission has always been to help our clients not just navigate the complexities of the fintech ecosystem, but to excel within it. We remain committed to enhancing our platform so as to best support the industry at every step—exhibited in 2024 through launching an industry coalition, developing additional technology offerings, and launching a number of other services that help turn fintech’s visions into reality.

On this note, just before the holidays, we closed on the acquisition of the APPROVED Licensing platform from the global law firm, Orrick. The APPROVED technology platform (AKA Mogy) provides a streamlined process for license applications and license maintenance and we look forward to making it available to the entire industry in 2025.

Looking Ahead

I hope that it goes without saying that we, like you and others in the fintech industry, appreciate all of the hard work that lies ahead in 2025. As always, I look forward to collaborating with you and seeing the great strides our industry will make this year. Let’s embrace the opportunities ahead with discipline, focus, and relentless execution.

Wishing you and your teams a prosperous and productive 2025!

Bryan Mulcahey

Managing Partner

FS Vector