Digital financial infrastructure: Investing in a new financial architecture

Financial infrastructure is emerging as a mainstream strategic asset class for private equity investors. The convergence of financial services, technology, and infrastructure is reshaping financial markets and creating a dynamic landscape of investment opportunities. Rapid change in payments, fintech and financial market infrastructure (FMI) is driving a surge in deal activity. Technological innovation and infrastructure upgrades are fuelling demand for new products and services, spawning new ventures, consortia, spin-outs, divestments, and other strategic transactions.

A new digital financial architecture

Global commerce operates 24/7, requiring financial systems that are fast, secure and interoperable. Legacy financial market infrastructure, built for batch processing and siloed operations are having to evolve into digitally native, adaptive systems designed for real-time settlement, smart contracts, and tokenised assets. 

This digital transformation is a fundamental reimagining of how money moves, assets are managed, and institutions collaborate in a digital-first industry. It demands significant investment in critical capabilities – which go beyond traditional core operations such as AI and cloud-native analytics that aggregate data from trading venues, clearing houses, and counterparties, run real-time risk models, and provide compliance dashboards.

Financial infrastructure now extends far beyond traditional FMI. Regulatory reforms, consumer demand for faster and more secure transactions, and the rise of embedded finance (where financial services are embedded directly into non-financial platforms) are driving innovation at scale. Digital financial infrastructure spans cloud-native banking and payment platforms, blockchain-based real-time settlement layers and digital identity/KYC infrastructure ensuring security and compliance.

For investors, this is a compelling proposition: acquiring and scaling essential digital infrastructure as financial institutions streamline balance sheets and refocus on strategic priorities. Strategic acquirers aim not just to participate but to shape this new architecture. Consortia models underscore that collaboration, as much as competition between financial institutions, will define the next era of financial services innovation.

Deal activity and investment opportunities 

As legacy systems are replaced, M&A activity is accelerating. Incumbents are acquiring technological capabilities while divesting or spinning out non-core infrastructure. New consortia of financial institutions are forming to build interoperable platforms while venture creation is accelerating around digital wallets, cross-border payments, and tokenised assets.

Regulatory reforms and privatisation trends are opening the door for private capital investment in FMIs – clearing houses, settlement systems and payment systems – are increasingly being viewed as strategic assets. As highly regulated assets they have high barriers to entry offering long-term stability and strategic influence over the financial market’s core infrastructure.

Private equity sponsors are actively deploying capital into scalable platforms supporting the next generation of financial services. These assets are increasingly viewed as providing essential services, offering predictable cash flows, regulatory protection, and long-term relevance – hallmarks of infrastructure investments – while providing upside from technology adoption.

The fragmented nature of digital financial infrastructure, particularly in payments and identity verification, also presents compelling opportunities for platform consolidation to create unified platforms to bring these services together. Sponsors are acquiring regional players and integrating technology stacks to build scalable platforms with global reach. 

Payments sector mega deals

Payments is the most attractive segment for private equity, particularly in B2B payments and vertical SaaS platforms, with recurring revenue models and regulatory clarity driving interest. There has been a shift toward capability-driven consolidation, with buyers targeting real-time payments, crypto infrastructure, and cross-border solutions. 

Mega-deals continue to reshape the payments landscape, reflecting strategic imperatives for scale, technology integration, and global reach. Headline transactions in 2025 include Global Payments’ proposed US$24.25 billion acquisition of Worldpay and FIS’s US$13.5 billion purchase of Global Payments’ issuer solutions business, and Capital One’s US$35 billion acquisition of Discover - moves that consolidate market share and expand capabilities across digital payments and embedded finance. 

Financial infrastructure funds

In 2023–2024, several large private equity and infrastructure investors (e.g., CVC Capital Partners, KKR) established or expanded technology-focused funds, with a portion targeting FMI systems and fintech market rails. Beyond core FMI assets (such as established exchanges and central counterparties), dedicated funds are now targeting new subsectors: real-time payments and settlement infrastructure; digital asset custody and tokenisation platforms; RegTech and compliance-as-a-service providers. This diversification suggests investments will not only grow in scale but also in scope, with new technology-driven participants entering the market.

High-profile transactions, such as private investment in payment networks and data providers (NEXI, Adyen, SWIFT-related projects), have attracted further fund launches. Brookfield’s launch of the first dedicated Financial Infrastructure Fund highlights the sector’s evolution into a strategic asset class. Designed to “invest in the systems that power global financial transactions” this  targets payments, capital markets, banking technology and wealth management – as areas that have become essential to the digital economy. 

Its Financial Infrastructure fund complements Brookfield’s broader infrastructure platform, which recently saw record fundraising for traditional assets. The launch reflects Brookfield’s strategy to capitalise on digitalisation, one of the megatrends reshaping infrastructure investment. To lead this effort, Brookfield brought in Ron Kalifa, former CEO of Worldpay, with expertise in global payments designed to strengthen the fund’s ability to identify high-quality opportunities.

Legal and regulatory considerations

The transformation in financial infrastructure is not merely operational – it raises complex strategic and legal considerations around resilience, interoperability, and regulatory compliance, particularly as payments converge with digital assets and AI-driven services. Sponsors must conduct robust regulatory due diligence and structure investments to address these risks.

We identify five key considerations:

1. Regulatory complexity: Digital financial infrastructure often spans multiple jurisdictions and activities (such as payments, clearing, custody and tokenisation) each subject to distinct regimes. Investors must assess whether the target requires licenses (e.g., payment institution, securities exchange, digital asset service provider) and address new regulations such as MiCA in the EU and the developing U.S. framework for digital assets.

2. Data governance and cybersecurity: Digital financial infrastructure assets are inherently data-intensive. Legal teams need to evaluate compliance with data protection laws, cybersecurity standards, and liability exposure for breaches. Regulatory scrutiny is intensifying around the resilience of critical financial infrastructure and financial data protection.

3. Technology and intellectual property ownership: Proprietary technology underpins valuation. Clear IP ownership, robust licensing arrangements, and enforceable non-compete clauses are essential. Disputes over smart contracts and tokenised assets are also becoming more common, as courts grapple with novel legal questions.

4. AML/KYC compliance: Digital identity and KYC systems which are core to these platforms must comply with anti-money laundering and counter-terrorist financing rules, especially cross-border. Regulatory sandboxes for innovative financial products and evolving standards for decentralised finance add complexity.

5. Exit strategies: Exits for regulated FMI’s or with cross-border platforms can be complex: requiring approvals such as foreign investment controls and national security reviews. ESG alignment remains important for investor expectations and evolving regulatory mandates. Legal teams must anticipate hurdles early and structure exits accordingly to avoid delays or deal risk.

A multidisciplinary approach 

Digital financial infrastructure is no longer niche – it is becoming a cornerstone of financial markets, global commerce and a standalone strategic asset class. Dedicated funds signal and catalyse accelerated, broader, and more sophisticated investment into financial infrastructure, echoing the path followed by digital infrastructure investment over the past five years. 

Continued regulatory evolution, AI and cyber-related spending, and the global scale of payments and trading ensure that financial infrastructure will remain a major target for institutional capital. For investors and dealmakers, the opportunity is vast, but so are the challenges: regulatory fragmentation, cybersecurity risks, and evolving legal frameworks demand sophisticated, multidisciplinary approaches. 

Success requires strategic horizon scanning to anticipate regulatory shifts, integrated risk management across technology, finance, and infrastructure, and creative structuring to bridge valuation gaps and mitigate execution risk. As technology, finance, and infrastructure converge, those who combine capital with legal foresight and operational agility have the opportunity not only to capture value, but help shape the architecture of tomorrow’s financial markets.