FinTech’s Next Move

Why Owning Your Licence and Infrastructure Matters More Than Ever

The FinTech industry has come a long way off the back of the initial wave of fast-moving, API-powered disruption and a willingness to move quicker than anyone else. That approach has delivered extraordinary innovation, but it has also exposed the limits of a model where core services are delivered by third parties the FinTech does not fully control. As customer expectations rise and both operational and regulatory risks intensify, the risks created by material outsourcing become harder to ignore. The FinTech’s that succeed in the next phase will be those that move quickly while keeping greater control of their core infrastructure and building resilience into how they operate.

Supporting every seamless financial transaction is a complex web of infrastructure. When it works well, it’s invisible to those using it. But when it fails, through account freezes, settlement delays or a partner going offline, the consequences are immediate, public and damaging.

For much of the past decade, the FinTech sector has been powered by speed, with fast launches, plug-and-play integrations and the ability to scale rapidly. That agility helped countless firms disrupt traditional finance, but that speed came at a cost. Many FinTech’s grew dependent on external providers, sponsor banks or loosely integrated platforms, creating fragility in the very systems that underpin their growth.

Repeated outages originating from third-party cloud, payments and infrastructure providers¹ have demonstrated the limits of outsourced operating models and the risks of insufficient control over critical services.² These events have driven increased regulatory scrutiny, with the FCA placing third-party risk and operational resilience at the centre of its supervisory agenda, including targeted reviews of outsourcing arrangements and the development of a strengthened framework for the oversight of critical third parties.³

The Case for Controlling Your Infrastructure

Some forward-looking FinTech’s saw this coming. Instead of stitching together third-party solutions, they made early investments in building their own infrastructure, acquiring regulatory licenses, developing proprietary platforms and embedding compliance at every layer of the business.⁴

Rather than being a compliance-driven decision, it was a strategic move to gain resilience, agility and global scalability. When a business has direct and effective control over its own payment rails, treasury management, onboarding journeys and compliance framework, it gains both resilience and execution speed. For product leaders, greater infrastructure control enables faster launches without third-party approval bottlenecks, greater flexibility to evolve the roadmap and more reliable end-to-end customer experiences. Fewer external dependencies mean fewer compromises and more autonomy in product design, faster issue resolution and more consistent customer journeys as the business scales.

Several macro trends are pushing more FinTech’s to follow suit:

The always-on economy: Customers now expect instant payments and 24/7 availability. Downtime or delays caused by third-party dependencies are no longer acceptable or tolerated to the same degree.
The rise of embedded finance: SaaS platforms increasingly want finance capabilities that are integrated natively, rather than adding them later through shallow third party partnerships.
Global reach: As businesses expand internationally, having fragmented providers in each market becomes inefficient and risk-prone. A unified, in-house platform allows for a faster and more compliant expansion.

Each external dependency adds friction, increases risk and slows down resolution when issues arise. Owning infrastructure reduces that exposure, increases accountability which improves responsiveness across the board.

Licensing as a Strategic Lever

Licensing decisions are often viewed primarily through a compliance lens, but they are also deeply strategic. The type of regulatory permission a FinTech holds shapes how much control it has over its operations, how dependent it is on partners, and how flexibly it can design products.

Not all licenses provide the same scope. Basic permissions such as U.S. Money Transmission Licenses or European e-money authorisations allow firms to facilitate payments, but typically require reliance on partner banks for safeguarding funds, settlement, and access to payment networks.

More advanced permissions, such as acquiring or scheme memberships, can reduce dependence on third parties in card processing and improve reliability, though firms may still lack access to central bank systems or the ability to hold customer deposits.

Banking licenses offer the broadest regulatory scope, enabling firms to hold funds, operate accounts, and manage liquidity directly albeit with significantly higher regulatory and operational requirements. For some FinTech’s, this level of control enables deeper product integration and closer supervisory engagement; for others, the trade-offs outweigh the benefits.

Ultimately, licensing is not about hierarchy but alignment. The closer a business operates to its core infrastructure, the more control it may gain but also the more responsibility it assumes. The right model depends on the products being built, the risk appetite of the firm, and the level of operational complexity it is prepared to manage.

Infrastructure Isn’t Back Office, It’s Business

In today’s market, infrastructure both supports the product and directly shapes the product experience. It determines how fast funds move, how flexible the product suite can be, how robust compliance processes are and how efficiently a business can scale. It underpins customer trust and increasingly is a key differentiator.

The next phase of FinTech will be led by firms that are built for growth resilience and for durability. That means:

Investing in infrastructure early with careful consideration around the firms strategy.
Acquiring the licenses that enable full-stack control.
Embedding regulatory resilience into the DNA of the business.

The industry is entering a more mature and complex regulatory era. Customers, partners and regulators are demanding more transparency, accountability and reliability. In this context, control over infrastructure goes beyond efficiency; for many FinTech’s it is becoming essential to remain credible and competitive.

The Bottom Line

Fintechs do not need to own or operate every layer of their infrastructure. However, as businesses scale, regulators such as the FCA and customers alike expect greater accountability, visibility and control regardless of whether systems are built in-house or delivered through partners.

At scale, infrastructure decisions extend far beyond operational efficiency. They influence governance, regulatory confidence, product flexibility, incident response and ultimately customer trust and reputation. When critical functions sit outside the organisation, these risks must be actively managed through strong oversight, contractual controls and contingency planning.

For FinTech’s operating in mature and closely scrutinised markets, infrastructure strategy is therefore not a secondary consideration. It is a structural choice that shapes resilience, adaptability, and long-term sustainability. Success is not determined by ownership alone, but by the clarity of responsibility and the strength of execution.

Footnotes:

1: House of Commons Treasury Committee. “More than one month’s worth of IT failures at major banks and building societies in the last two years,” UK Parliament (March 2025).

2: Zoe Kleinman. “What caused the AWS outage - and why did it make the internet fall apart?,” BBC News (October 20, 2025).

3: “Building Operational Resilience (PS21/3), Outsourcing and Third-Party Risk (FG16/5), and provisions of the Financial Services and Markets Act 2023 relating to critical third-party oversight,” Financial Conduct Authority (2021–2023).

4: “Fintech’s next era: The strategic value of licence ownership, infrastructure and embedded financial services,” PaymentsDive (July 28, 2025).