FinTech in 2025: Regulatory Scrutiny, Strategic Shifts, and the Role of Law Firms

The FinTech sector continues to undergo significant transformation, with regulatory scrutiny, market shifts, and public listings shaping the landscape. Law firms play an essential role in guiding FinTech businesses through these complexities, ensuring regulatory compliance, managing risk, and advising on strategic opportunities.

Regulatory Scrutiny and Law Firm Expertise:

Binance Under Investigation: The Role of Financial Crime & Compliance Advisory

French authorities have intensified their investigation into Binance, examining potential violations of anti-money laundering (AML) and counter-terrorism financing laws. This case highlights the growing regulatory enforcement against crypto exchanges and digital asset platforms, reinforcing the need for law firms with strong regulatory compliance capabilities.

• A&O Shearman has a specialised FinTech team assisting clients with AML frameworks, financial crime risk assessments, and regulatory compliance for crypto businesses and blockchain platforms.

  
  

• Clifford Chance advises on cross-border investigations and enforcement actions in the digital assets space, ensuring FinTech clients navigate complex international regulatory landscapes.

  
  

• Norton Rose Fulbright emphasises regulatory clarity and the importance of collaboration between firms and financial regulators, particularly as jurisdictions worldwide tighten crypto oversight.

  
  

Given the increasing scrutiny, FinTech firms must work closely with legal advisors to proactively manage regulatory risks and implement robust compliance mechanisms to avoid enforcement actions.

Strategic Shifts in FinTech and Legal Advisory:

HSBC Shutting Down Zing: Advising on FinTech Market Entry & Exit

HSBC’s decision to close Zing, its digital payments app, underscores the challenges traditional banks face in competing with digital-first FinTechs. The move aligns with broader trends of consolidation, regulatory challenges, and the need for scalable business models in digital banking.

Law firms play a critical role in advising on:

• Product development & compliance: Ensuring that digital payment solutions comply with e-money regulations, consumer protection laws, and financial services frameworks.

  
  

• Market entry & exit strategies: Supporting banks and FinTechs in determining whether to pivot, integrate, or shut down underperforming services.

  
  

• Mergers & acquisitions: HSBC’s move may trigger acquisition interest from digital payment providers, where law firms can offer expertise in FinTech M&A, due diligence, and regulatory approvals.

  
  

This case highlights why strategic legal guidance is essential in digital banking to assess commercial viability, regulatory compliance, and market competitiveness.

Public Listings & the Future of FinTech Regulation:

Monzo's IPO Dilemma: Structuring Listings Amid Regulatory Considerations

Monzo is weighing a US vs UK IPO, with internal debates reflecting concerns over listing environments, regulatory regimes, and investor sentiment.

Key legal considerations include:

• US vs UK regulatory frameworks: Navigating SEC vs FCA listing requirements is crucial, as each jurisdiction imposes different compliance obligations.

  
  

• Shareholder agreements & governance structures: Law firms play a crucial role in advising on pre-IPO corporate governance to align with regulatory expectations and investor interests.

  
  

• Prospectus preparation & financial disclosures: FinTech IPOs require adherence to financial disclosure obligations, with law firms ensuring compliance with the EU Prospectus Regulation (for UK listings) or SEC rules (for US listings).

  
  

Given the London market’s low IPO activity, Monzo’s decision will likely set a precedent for other FinTech firms considering public listings.

Key Trends in 2025 & The Role of Law Firms:

1. AI and Regulatory Compliance

The increased use of AI in financial services brings new compliance challenges. Law firms are at the forefront of advising on:

• AI governance & ethical considerations

• Regulatory compliance for automated financial decision-making

• Data protection and AI-driven risk assessments

  
  

2. Digital Asset Regulation & Enforcement

As demonstrated by the Binance case, regulatory scrutiny of digital assets is intensifying. Law firms provide advisory services on crypto compliance, financial crime risk mitigation, and enforcement defence.

3. Payment Innovations & Decentralised Finance (DeFi)

The rise of DeFi, real-time payments, and Central Bank Digital Currencies (CBDCs) requires legal expertise in:

• Licensing & regulatory approvals for new financial products

• Advising on partnerships between banks and FinTechs

• Developing legal frameworks for decentralised finance models

4. Operational Resilience & Cybersecurity

With cyber threats on the rise, law firms play a key role in:

• Developing regulatory-compliant cybersecurity frameworks

• Advising on incident response & data protection regulations

Conclusion:

The evolving FinTech landscape underscores the critical role of legal advisors in regulatory compliance, strategic decision-making, and market expansion. Law firms are well-positioned to guide FinTechs through regulatory scrutiny, digital transformation, and growth strategies in 2025.

For future trainee solicitors, commercial awareness of these trends is essential. Understanding how regulatory developments, strategic pivots, and market conditions intersect with legal practice will be key to excelling in the FinTech legal sector.