In an article published in Law360 on April 27, Nelson Mullins partner Craig Nazzaro and associate Marianna McDevitt examined the scrutinization of bank-fintech partnerships within the modern financial services industry.

“Bank-fintech partnerships can be beneficial to both the bank and the fintech if approached with transparency and a shared understanding of regulatory accountability. If they are done poorly, they can generate regulatory scrutiny, operational failures, and reputational damage that can take years to repair,” they shared. “The most successful programs are built by parties who prioritize strategic alignment from the beginning, comprehensive due diligence and risk acceptance, ongoing monitoring, thorough documentation, and a wind-down termination plan.”

“If it comes to it. The banks and fintechs that internalize these principles are the ones building relationships that last and that can survive regulatory scrutiny,” they further offered. “They are also building programs that can survive the current shifting regulatory landscape — allowing banks and fintechs to scale controls up or down where necessary, while retaining the data and analysis needed to defend the positions they have taken to date.”

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