Why This CEO Says It Has to Be ‘Business as Usual’ in Uncertain Regulatory Climate

The future is uncertain for a host of regulatory agencies these days, with the financial services sector seeing more uncertainty than most.

The Consumer Financial Protection Bureau is on unsure footing, to say the least. There’s a proposal on the table to combine the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency. President Donald Trump has stated his intention early and often to have influence over the Federal Reserve.

It’s an uncertain outlook in a sector that thrives on predictability. FinTechs need to be on point to read the tea leaves coming from Washington (or lack of them) to stay ahead of potential regulations and continue to scale their businesses. In the absence of clarification on where regulations stand, FinTechs need to proceed with a “business as usual” mindset, ValidiFI CEO John Gordon told Karen Webster in an interview.

“We don’t have any choice but to be full steam ahead with innovation and strategic partnerships,” he said, adding that “the pace of change for consumers — and what they want — means the opportunity to innovate continues.”

At the same time, however, there will still be a need for guardrails to determine best practices in financial services.

“Regulation is not going away, not by any stretch of the imagination,” Gordon said. “But some of the scenarios that were a little more ‘heavy-handed’ are going away in the near term — and there’s going to be some more time to comply.”

In one specific example, ValidiFI’s banking and enterprise clients, faced with the mandate that they gain a consumer’s authorization for a second payment on a debt they owed that they haven’t paid, would have proven to be a difficult compliance hurdle. With some of the more pressing regulations on hold, banks are more confident about their near-term prospects and are working with FinTechs to make everything from account openings to payments more streamlined even as they bolster know your customer (KYC) and anti-money laundering (AML) efforts.

What Consumers Expect

The conversation with Gordon was part of the continuing “What’s Next in Payments” series seeking input from executives on what it means to be a FinTech in 2025.

No matter the scenario or the FinTech’s focus, consumers interact with service providers with a quid pro quo in mind, Gordon said. They are willing to give personal information in exchange for a process that is reasonable and enjoyable.

They expect “to get a decision that won’t be unreasonably withheld — be it credit, a service or a payment experience — it all ties together so that I spent a certain amount of time with the provider, and it was worth it in the end,” he said.

As for the regulatory outlook for the moment, he said a “wait-and-see” approach is the dominant mindset, and with the end of Rohit Chopra’s tenure at the helm of the CFPB, “that version of the CFPB is being tamped down.”

ValidiFI’s partners are optimistic that the business-as-usual environment means they are not going to have to navigate through significant changes in their customer acquisition, underwriting and debt collection efforts (and won’t change ValidiFI’s own focus on validating bank accounts and payments), he said.

For ValidiFI, account validation will continue to be the driving force behind improving the customer’s experience, while helping banks grapple with their biggest challenge, which is to prevent fraud — and protect the financial institution and end customer at the same time.

“Our board is bullish on 2025 for the purposes of growing our business and executing on our strategy … we’re in a place where we feel like this is a year of execution for us,” he said. “Generally speaking, the market’s in a good place, and there are a lot of people who are doing things that will ultimately have positive impacts. Do [banks and FinTechs] end up doing some of those things together over the course of time? That would probably make a lot of sense.”

As he told Webster, “Ultimately what it means to be a FinTech is now we are left to decide how we structure our businesses to best account for what may be … as murky of a compliance framework, regulatory scenario as we’ve ever seen.”