The FDIC proposed significant revisions to its brokered deposits regulations, which would tighten brokered deposit regulations, likely classifying many deposits that fintechs facilitate as brokered. This could increase costs and regulatory scrutiny for banks partnering with fintechs, potentially making such partnerships less attractive and more challenging to maintain. The changes may have a chilling effect on bank-fintech collaborations, making it harder for fintechs to offer deposit products through bank partnerships. FS Vector Advocacy Managing Partner Andy Barbour has cautioned that “While it is important to take each proposal from prudential supervisors seriously, it is difficult to see this proposal being finalized before the end of the year. The calendar, the elections, and the future leadership at FDIC will certainly have an impact on the future of this proposal.”

The conversation around artificial intelligence in financial services is also heating up. The Consumer Financial Protection Bureau (CFPB) has responded to the U.S. Department of Treasury’s request for information on AI in financial services. The CFPB emphasizes that existing consumer protection laws apply to AI, advocating for uniform enforcement to foster innovation. Similarly, another hot topic in fintech regulation has drawn significant attention. The CFPB’s proposed rule to classify Earned Wage Access (EWA) payments as loans has garnered significant attention. The agency received a flood of public comments ahead of its feedback deadline, with EWA providers, consumer advocates, and state legislators weighing in on the proposal. 

The major banking and credit union associations, including American Bankers Association and America’s Credit Unions have sued Illinois to block a new law limiting interchange fees on tax and tip revenues. The lawsuit reflects a broader national debate over swipe fees between financial institutions and retailers; the fear being that if Illinois’s law prevails, other states may follow, potentially impacting profits nationwide. 

Public fintech companies are making significant strategic moves to strengthen their market positions. Marqeta, a leading card issuing platform, partnered with Varo Bank as its new issuer-processor, a collaboration set to enhance Varo’s digital banking services through improved digital wallet integration and transaction management. Block is undergoing significant changes to bolster its position in the industry. The company is implementing an internal reorganization, shifting to a functional structure to enhance its go-to-market strategy. As part of this restructuring, Nick Molnar, co-founder of Afterpay, has been promoted to Head of Sales across Block. The company is also pursuing ambitious banking aspirations, aiming to position Cash App as the primary financial services partner for families that earn up to $150,000. In line with these strategic moves, Block acquired Sliderule, a no-code rules engine for risk and fraud teams.

Apple is opening near field communication (NFC) access on iPhones to third-party developers in several markets, allowing for competitive digital wallet and contactless transaction apps. This change, coming in iOS 18.1, follows regulatory pressure from EU regulators and will require developers to pay fees for access. The move could spur innovation in mobile payments and digital ID solutions. PayPal plans to capitalize on this by developing its own mobile wallet for EU users. In the crypto space, this has prompted companies like Circle to plan tap-and-go USDC payments on iPhones, potentially enabling direct merchant payments with stablecoins and expanding to other digital assets.

On the acquisition front, in the asset management sector, Janus Henderson is acquiring Victory Park Capital Advisors to expand into private credit, particularly asset-based finance. This adds $6 billion to Janus Henderson’s $36 billion securitized asset business, following a trend of asset managers entering the $1.7 trillion private credit market. The move aims to provide access to diverse private financings and meet client demand for innovative credit options.

The data and analytics sector is also seeing significant activity. Experian acquired NeuroID to bolster its fraud prevention tools, particularly against AI-enabled fraud. This acquisition integrates NeuroID’s real-time behavioral analytics into Experian’s existing systems. In a similar vein, Dun & Bradstreet is exploring potential sale options. With its market value, including debt, exceeding $9 billion, Dun & Bradstreet is working with Bank of America to evaluate takeover interest.

In the broader fintech space, Flywire acquired Invoiced to enhance its global payment solutions, and student loan assistance startup Summer acquired benefits platform Vault. Meanwhile, NCR Voyix is selling its digital banking business to a Veritas Capital affiliate for $2.45 billion, marking a significant shift in its business focus. Finally, Chariot raised $11M to streamline Donor Advised Fund giving. Their DAFpay system allows easy online donations to major nonprofits.