Global fintech funding continues to shift toward identity, compliance, cross-border, and AI payment infrastructure

Global fintech funding continues to tilt toward identity, compliance, cross-border, and AI payments infrastructure

Recent fintech financing activity once again shows that capital is flowing more clearly toward the financial infrastructure layer, rather than simply toward front-end consumer applications. Whether it is automated compliance, digital identity and fraud prevention, SME lending services, digital asset wallets, or payment development environments that support AI agents, investors are increasingly focused on one question: can these solutions be embedded into the existing financial system, scaled for deployment, and reduce operational and compliance costs? For banks, payment institutions, and regulators, these financings not only reflect market preferences, but also reveal the main line of fintech competition over the next three to five years.

Industry background

The global fintech funding cycle has gradually shifted from the past model that emphasized high growth and user acquisition in consumer internet, toward a direction that places more weight on efficiency, risk control, and infrastructure capabilities. More complex payment chains, sustained cross-border demand, and higher regulatory requirements for financial institutions are driving capital toward companies that can solve foundational problems.

Recent disclosures show that market attention is concentrated in several areas:

• Compliance automation and regtech: helping financial institutions complete KYC, third-party risk management, customer due diligence, and ongoing monitoring.
• Digital identity and fraud prevention: playing an infrastructure role in account opening, transaction verification, and wallet security.
• SME finance: serving business customers that traditional banks do not adequately cover, especially in emerging markets.
• Digital asset wallets and cross-border accessibility: centered on stablecoins, Bitcoin, and mobile financial access capabilities.
• AI-driven software and payment development tools: beginning to enter the exploratory stage of agentic commerce and machine-to-machine transactions.

Together, these directions point to one fact: fintech value is shifting from “providing a new interface” to “rebuilding how financial infrastructure works.”

Current developments

Among this round of financing and investment disclosures, several companies’ moves are especially noteworthy.

Harmoney secured a €10 million minority investment from Smile Sail. The Belgian regtech company was founded in 2016, and its core businesses include digital onboarding, third-party risk management, and KYC remediation. According to public information, the new funding will support its international expansion and continue its investment in AI-driven counterparty risk management.

This kind of financing shows that financial institutions’ demand for compliance automation has not weakened; rather, it has strengthened further amid rising regulatory complexity. For banks and payment companies, compliance is no longer just a cost center, but a prerequisite for achieving scalable growth.Didit has completed a $7.5 million seed round, with investors including Y Combinator, Pioneer Fund, Orange Collective, Founders Future, and others. Didit provides services such as KYC, KYB, transaction monitoring, biometric authentication, and wallet screening, covering 220 countries and regions and more than 1,500 B2B customers.

Notably, Didit emphasizes its positioning as a “programmable identity and anti-fraud infrastructure” provider. This reflects a trend: identity verification is evolving from a single review process into a modular capability that can be embedded into platforms, applications, and payment workflows. For open banking, embedded finance, and digital banking scenarios, such capabilities are becoming increasingly important.

First Circle has secured a $4.87 million credit line from Cathay United Bank. First Circle serves SMEs in the Philippines, offering commercial banking services, loans, and online business accounts. The company said the funding will strengthen its lending capacity and help expand credit access for high-quality SMEs that have been overlooked by the traditional banking system.

This case once again shows that one of the key priorities in fintech-bank partnerships remains expanding the availability of SME financing. In many markets, the real pain point for SMEs is not a lack of demand, but a lack of suitable risk models, digital processes, and low-friction financing channels.

Sorted has raised $4.4 million in seed funding, with investors including Tether, Gnosis, Movement, and Angel Invest. The company offers non-custodial Bitcoin and USDT wallets and emphasizes that its product can run on low-spec smartphones. The company said the new funds will be used to expand into sub-Saharan Africa and South Asia, and to strengthen integrations with telecom and mobile operators.

Sorted’s case reflects another path in digital asset adoption: not around speculative trading, but around low-cost access, mobile inclusion, and cross-border reach. In markets with weak infrastructure, the value of digital asset wallets often lies more in payment usability and account accessibility than in asset price volatility.Finally, Visa’s investment in Replit has drawn market attention to the intersection of AI and payments development. Replit is a platform that helps developers create and deploy applications using natural language, with more than 50 million users and 500,000 enterprise users. The two sides will collaborate around Visa Intelligent Commerce and the Trusted Agent Protocol, exploring how developers can natively integrate payment modules when building AI agents, and enabling agents to execute transactions on behalf of consumers.

The significance of this collaboration is that payment infrastructure is beginning to enter the agentic commerce stage. In other words, payments are no longer just settlement actions for human users; they may also become part of the workflows executed by AI agents. This places higher demands on payment networks, identity verification, authorization controls, and transaction monitoring.

Implications for the financial system

1) Payment efficiency and infrastructure upgrades

Together, these financing events point in one direction: the underlying infrastructure for payments and financial services is becoming more modular, orchestratable, and integrable. Whether it is identity verification, risk management, developer tools, or wallet products, the core goal is to reduce manual steps, shorten processing cycles, and improve interoperability between systems.

For the payments industry, this means more companies will adopt embedded capabilities rather than relying on a single large, closed system. Competition in future digital payments will increasingly depend on who can provide lower-friction onboarding, faster verification, more robust monitoring, and more flexible API integration.

2) Financial inclusion and cross-border accessibility

The cases of First Circle and Sorted correspond to credit inclusion and access to digital finance, respectively. The former focuses on SME financing, while the latter focuses on digital asset wallets on low-spec devices. Both show that fintech is still solving an old problem: how to bring traditional financial services to overlooked populations.

In emerging markets, the significance of such models is especially clear. Mobile devices, telecom networks, and alternative identity infrastructure are replacing some of the functions of traditional branches, creating new entry points for cross-border payments, digital wallets, and small-business financing.

3) Competition and the boundaries of cooperation in banking

Banks are no longer merely passive providers of capital. Cathay United Bank’s provision of a credit line to First Circle shows that traditional banks can enter more segmented customer layers through cooperation with fintech firms, and can also leverage technology companies’ risk control and distribution capabilities to improve reach.Meanwhile, the collaboration between Visa and Replit reflects how major financial infrastructure providers are extending into the developer ecosystem. For banks and payment networks, future competition will not be just product competition, but ecosystem competition: who can become the default layer for financial functions embedded in third-party workflows.

4）Compliance Costs and Risk Management

The financing of Harmoney and Didit shows that demand for regtech and identity solutions remains strong. For financial institutions, as cross-border business, real-time payments, and AI applications increase, the complexity of compliance and risk management is also rising in tandem.

This means financial institutions will rely more on AI in finance, automated reviews, and programmable identity tools to control costs and improve auditability. For regulators, the focus will be on traceability, data governance, and model risk management.

Challenges Ahead

Although these financing activities show a clear growth direction, the companies involved still face multiple practical challenges.

Data Privacy and Identity Governance

Identity verification and anti-fraud tools need to handle large amounts of sensitive data. As KYC, KYB, and biometric applications increase, data storage, cross-border transfer, and usage authorization will all become key regulatory concerns. Without a clear data governance framework, digital identity systems are prone to compliance and trust issues.

Cybersecurity and Transaction Risk

As AI agents participate in transactions and software automatically executes payment operations, the attack surface is also expanding. Payment networks must not only verify “who is initiating the transaction,” but also determine “whether this agent is authorized and acting within a reasonable scope.” This places higher demands on payment security, authentication mechanisms, and transaction monitoring.

Technical Integration and Interoperability

Many fintech products ultimately need to be embedded into banks, payment companies, telecom networks, or enterprise systems. The difficulty of technical integration lies not in single-point functionality, but in compatibility with existing core systems, identity infrastructures, and risk control processes. Without standardized interfaces and clear boundaries of responsibility, large-scale deployment will be constrained.

Regulatory Uncertainty

Areas such as stablecoins, digital asset wallets, AI agent transactions, and cross-border payments are all still within evolving regulatory frameworks. Regulators generally welcome innovations that improve efficiency and transparency, but will remain cautious about consumer protection, anti-money laundering, sanctions screening, and operational risk.

Future Outlook

Over the next three to five years, fintech financing will likely continue to concentrate in a “infrastructure-first” direction. The following trends are worth watching closely:

1. Identity and fraud prevention will become the default layer of financial services Financial institutions and platforms will increasingly rely on programmable identity, continuous authentication, and automated review, rather than one-time manual checks.2. embedded finance and open banking continue to converge Payment, lending, and account capabilities will be further embedded into enterprise software, the platform economy, and developer tools; financial products will increasingly look more like foundational capabilities than standalone apps.

3. AI’s role in finance is shifting from analysis to execution At present, most applications are still concentrated in review, customer service, and risk control, but as agentic workflows mature, AI may participate in more transaction and payment processes.

4. Cross-border payments and new types of wallets will continue to serve inclusive finance use cases In regions with insufficient basic financial services, low-cost wallets, mobile network integration, and alternative settlement channels will remain important growth areas.

5. Regulation will place greater emphasis on explainability and responsibility allocation Whether it is CBDC, stablecoins, or AI-driven payment systems, regulators will focus on transparency, auditability, and risk attribution rather than technological innovation alone.

Overall, this round of financing activity is not just capital news about a few companies, but a clear signal of structural changes in the next stage of financial technology: the competitive focus in financial services is shifting from front-end experience to underlying capabilities; from standalone products to system-level coordination; and from growth-first to a balance of compliance, efficiency, and scalability.

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Global fintech funding continues to tilt toward identity verification, compliance automation, cross-border payments, digital asset wallets, and AI payment infrastructure. Based on the latest funding developments, this article analyzes industry trends in fintech, digital payments, banking innovation, open banking, embedded finance, AI in finance, and financial regulation.

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