From small banks to big mortgage lenders, financial institutions are honing their strategies to identify strong fintech partners in the ongoing AI revolution.  

Global fintech investment increased 21% in 2025 to $53 billion across 5,918 deals, according to a Jan. 8 report by British trade group Innovate Finance.  

Fintech funding is expected to ramp up in 2026 as FIs seek AI providers that can deliver “measurable improvements in efficiency, risk management or unit economics, rather than serving as a broad positioning claim,” James Codling, managing partner at venture capital firm Volution, stated in the report.  

With a plethora of AI solutions to choose from, the process for evaluating fintech partners is taking shape across financial services. 

Scale and fit  

U.S. Bank, for one, typically seeks later-stage startups beyond series A and series B funding rounds, Chief Innovation Officer Don Relyea told FinAi News. The $695 billion bank also has a process to “weed out the ones that are not good at working with regulated entities,” he said. 

U.S. Bank then evaluates whether the technology is “a good fit for our business line,” Relyea said.  

“They’ve got to be at a certain scale, and they need to have a good risk and control mindset,” he said. “If you look at the fintech space, there’s some that are out to basically steal pieces of our pie, and then there are some who are looking to partner with banks.” 

Having at least one bank-risk expert on a fintech’s staff is another factor that could appeal to banks, he said.  

‘More than just an install’ 

A plan for smooth AI implementation is crucial, but banks also seek fintech partners that provide support well beyond implementation, Will Rhoads, CIO at Sonata Bank, told FinAi News.  

“We really look for partners that are going to do more than just an install,” he said. “The best ones are bringing templates and playbooks. … They help us map the process. They can train the staff. They can help us fine-tune the outcomes.” 

This is especially important for community banks such as Sonata because organizational change can create bottlenecks, Rhoads said.  

The $250 million bank’s core technology provider is Jack Henry, Rhoads said. In addition, cloud-data platform iDENTIFY has been “instrumental in helping us build out our data lakehouse,” he said. 

Worth investing? 

If an AI provider is a great fit, the FI could consider investing in the fintech to help ensure alignment in AI goals and strategies as new technologies emerge, Brian Woodring, CIO at mortgage lender Newrez, told FinAi News. 

Newrez this month invested in HomeVision, which provides AI-powered mortgage underwriting solutions. This decision binds the companies’ growth strategies, “and it binds our incentives,” Woodring said. 

“If we weren’t an investor in HomeVision, I would be very hesitant for them to use any of our intellectual property to build their product,” he said. “But because we’re an investor, I want them to use our intellectual property … to build the best origination technology in the entire market. So, we’re really pouring a lot of our blood, sweat, tears and knowledge into helping them make the best product.” 

Register here for the inaugural FinAi Banking Summit, taking place March 2-3 in Denver. View the full event agenda here.