Once defined by disruption and rapid expansion, the fintech sector is now facing its next great test: regulation, security, and sustainable growth. While embedded finance, AI-driven fraud prevention, and buy-now-pay-later (BNPL) models continue to reshape financial services, these innovations are increasingly met with tightening compliance frameworks, heightened cybersecurity risks, and the growing role of AI in financial governance.

At Fintech Meetup 2025, Jessica Offer, Partner at Withum, a national audit, tax, and advisory firm, outlined how Withum is helping fintechs navigate these shifting complexities, prepare for regulatory changes, and strengthen financial resilience.

A Regulatory Landscape in Flux: The Growing Pressure on Fintechs

One of the biggest hurdles fintechs face today is regulatory inconsistency—particularly in the U.S., where state-by-state licensing laws create a fragmented compliance environment.

This complexity is compounded by pending federal regulation on stablecoins, anticipated SEC rulings on AI-driven investment advice, and the continued evolution of crypto tax policies.

Data Point: In a recent survey by the Banking Policy Institute, 81% of fintech firms cited regulatory uncertainty as a significant barrier to scaling their business, with many struggling to adapt to new requirements for audited financial statements, anti-money laundering (AML) compliance, and risk assessments.

Withum has responded by broadening its fintech advisory services beyond traditional audit and tax work, helping fintechs with SOC audits, cyber security assessments, and AI adoption.

Cybersecurity: The Growing Risk Fintechs Can’t Afford to Ignore

The rise of digital wallets, AI-powered lending, and embedded finance has made cybersecurity a defining issue for fintechs in 2025. While cyberattacks on traditional banks make headlines, fintech firms face even greater vulnerabilities—particularly startups that lack robust security infrastructure.

Recent Trend: In 2024, financial services saw a 76% year-over-year increase in cyberattacks, according to IBM Security, with fintech platforms becoming prime targets due to large transaction volumes and high consumer adoption of digital-first banking.

“Hackers aren’t just targeting big banks,” Offer said. “Every fintech handling payment processing, credit underwriting, or consumer financial data is at risk. Many assume they’re too small to be on a hacker’s radar, but the reality is quite the opposite.”

To address this, Withum is working with fintech clients on penetration testing, vendor risk management, and incident response planning, ensuring firms are protected from cyber threats and are being not only reactive but proactive.

The regulatory focus on cybersecurity is also intensifying. The SEC’s new cybersecurity risk disclosure rules, which require financial institutions to report breaches within four days, are forcing fintechs to adopt stricter security protocols or risk heavy penalties.

AI in Fintech: The Fine Line Between Efficiency and Compliance

Artificial intelligence is transforming the fintech industry, but its regulatory and ethical risks remain under scrutiny. Offer noted that many fintechs are still in the early stages of AI adoption, with most applications focused on automation in finance and workflows and fraud detection rather than customer-facing innovations.

Key Regulatory Concern: AI-driven underwriting has raised concerns about algorithmic bias, with the Consumer Financial Protection Bureau (CFPB) recently launching investigations into AI-based lending models that could potentially discriminate against certain demographics.

Withum actively advisesfintech clients on how to integrate AI responsibly, ensuring that each AI solution is carefully designed, implemented and monitored to maximize benefits while mitigating risks associated with AI’s probabilistic nature.

The Tax and Compliance Shifts Fintechs Need to Prepare For

While much of the fintech conversation at Fintech Meetup 2025 centered on growth and innovation, Offer noted that pending tax policy changes could significantly impact valuations, investor sentiment, and operational strategies.

Upcoming Factors to Watch:
📌 U.S. tax reform debates could shift corporate tax rates and/or credits, affecting fintech profitability.
📌 Evolving interpretations of the JOBS Act may impact early-stage fintech research and development and international tax strategies..
📌 The rollout of BOI (Beneficial Ownership Information) reporting rules could increase compliance burdens for fintechs managing complex corporate structures.

As regulatory bodies continue to tighten tax and reporting requirements, fintech firms that proactively manage compliance risk will be in a stronger position to attract investment and scale effectively.

Final Thought: A Market That Rewards Compliance-Ready Fintechs

The fintech industry is at an inflection point: while AI, embedded finance, and alternative lending models are expanding the financial landscape, the firms that survive, or even thrive, and scale will be those that master compliance, cybersecurity, and financial governance.

Offer emphasized that Withum’s role extends beyond traditional financial auditing and basic tax compliance,—the firm has the expertise to help fintechs with a wide range of services, including , digital transformation, cybersecurity AI strategy, adoption and implementation, and more.

We’re thrilled to welcome Liberis as an official Unofficially Fintech sponsor. Embedded finance is a major theme at this year’s event, and Liberis is leading the charge by providing seamless funding solutions directly within platforms that businesses already use. They’ll be attending Fintech Meetup, talking all things embedded finance, so be sure to book some time with them! 👇

Stay Tuned for Exclusive Coverage

📩 We’ll be live reporting throughout the event with expert takeaways, key session insights, and exclusive interviews.

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— The Unofficially Fintech Meetup Team

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