Infrastructure modernization as a strategic response

Regulatory expectations are expanding into the systems firms use to make decisions. To meet changing expectations, firms should consider the infrastructure that supports them.

UK regulation puts questions around how data is ingested, where it’s stored, how it’s accessed, and whether it can be audited squarely on the table.

Regulators have also begun penalizing firms that mishandle their data. Poor quality data, or the inability to show where it came from, carries a similar risk to making a flawed decision.

Firms that want to operate in this environment will need to harden their infrastructure with clear technical controls:

Data masking to protect consumer inputs during processing
Encryption to secure data at rest and in transit
Client-level data isolation to maintain strict separation in multi-tenant environments
Audit trails that log decisions across ingestion, risk evaluation, and downstream reporting

Without these practical safeguards, firms will struggle to meet the standards now built into BNPL oversight.

Some firms have already started adapting. UK neobank Revolut, for example, moved core systems to Google Cloud to reduce latency and centralize its compliance architecture.^iv The result was improved control over both internal processes and external reporting.

For embedded finance firms — especially those dealing with credit, payments, or structured product data — the upside of modernization is strategic. Infrastructure built for control delivers advantages beyond compliance: faster product development, lower friction with institutional partners, and more predictable reporting cycles.

The systems that meet the new regulatory standards also improve firms’ performance. The more disciplined the infrastructure, the faster a firm can move.

Preparing for new regulatory demands

BNPL regulation in the UK is a signal. Regulations are already under consideration in the U.S., and the fact that BNPL is being regulated at all confirms what the market has suspected for some time: This category isn’t experimental anymore.

That makes the infrastructure question relevant for every firm in the ecosystem — not just BNPL providers, but investment platforms, savings tools, and any product built on real-time data flows.

Firms need to treat their infrastructure the way they would treat any other regulated function: as something that must be mapped, monitored, and built to withstand scrutiny. That means visibility across ingestion, decisioning, and external reporting.

The most direct path forward starts with a system-level assessment:

Map the full lifecycle of regulated data — from where it enters the system to how it’s surfaced to regulators and investors.
Identify brittle points — manual steps, undocumented logic, or inconsistent formats that create compliance exposure.
Build enforcement into infrastructure — through masking, encryption, data lineage, and role-based access.
Automate reporting pipelines — so that disclosure isn’t just possible, it’s repeatable, accurate, and fast.

Delaying this work adds exposure across three fronts: higher compliance costs, risk of regulatory penalties, and erosion of institutional trust. Infrastructure that cannot explain itself becomes a liability.

Firms that move early will be positioned to scale with control, adapt to evolving requirements, and hold a clearer line of accountability across products, clients, and partners. In embedded finance, intelligently designed and built infrastructure is quickly becoming the key to unlocking competitive advantage.