Halcyon Powers Fannie Mae Income Tool

As higher rates make bank M&A more expensive and harder to justify, banks and credit unions are turning to fintech partnerships instead, with announcements up 67% in 2024 even as completed acquisitions fell 34%. Partnerships deliver new capabilities in 90-120 days versus 18-36 months for in-house builds, all while preserving capital and reducing regulatory exposure. The institutions winning this shift are treating partnership infrastructure, not just partnership deals, as the real competitive advantage.

Banking-as-a-service compliance requirements are fundamentally reshaping fintech partnerships in 2025. Following high-profile regulatory actions against Synapse Financial Technologies and Blue Ridge Bank, the “growth at all costs” mentality has given way to a compliance-first framework—and the verification infrastructure that supports it is no longer optional.