June 26, 2025
Our Director of Sales, Joe Perry, recently attended the Envisso Risk Forum with Michael Aydeniz, our Head of Risk and Compliance. It was a focused event dedicated to exploring the evolving landscape of risk management within the fintech sector. Hosted by Envisso, the forum brought together industry experts to discuss critical themes around merger & acquisition (M&A) trends, emerging risk strategies, and regulatory expectations shaping the future of fintech.
M&A Trends and Risk in Fintech
The event kicked off with an insightful session on M&A activity over the past five years. The conversation highlighted how deal volumes surged prior to 2022, only to slow down amid rising macroeconomic uncertainty and tighter capital conditions. This slowdown has driven a wave of consolidation, particularly among infrastructure players in fintech.
One key takeaway was the renewed focus on profitability and regulatory readiness in potential acquisition targets. Due diligence now goes far beyond financials, with increasing scrutiny on robust risk frameworks and compliance protocols. For acquirers, understanding these risk factors is critical to making sound investments in an unpredictable market.
Evolving Risk Models in a Rapidly Changing Environment
The forum’s second session featured a panel of senior risk executives who discussed how acquirers are recalibrating traditional risk models to keep pace with new cyber, operational, and regulatory challenges. The integration of AI and machine learning emerged as a game-changer, enabling earlier fraud detection, more accurate underwriting, and continuous monitoring of Merchant behaviour.
However, these advancements come with their own challenges. Regulators are demanding greater transparency around AI decision-making, emphasising explainability and ethical considerations. Fintech companies must balance innovation with compliance to meet these evolving standards.
Evaluation: The Strategic Role of PayFac-as-a-Service in Risk Management
As fintech companies scale, especially PayFacs (Payment Facilitators), the complexity of managing Merchant onboarding, KYC/AML compliance, ongoing monitoring, and regulatory adherence grows exponentially. This is where PayFac-as-a-Service (PFaaS) platforms provide a vital advantage.
PFaaS embeds compliant, pre-built risk and compliance frameworks into the PayFac model, enabling software platforms and acquirers to accelerate their time to market while reducing operational burdens. For acquiring institutions, partnering with PFaaS providers offers scalable due diligence, mitigates third-party risk, and aligns with regulator expectations around embedded finance.
Ultimately, PFaaS is evolving beyond just a growth enabler, it’s becoming a strategic risk management tool that supports sustainable scaling in today’s complex fintech environment.
Read our joint white paper with Mastercard for more information.
