Fintech is disrupting the traditional banking system to improve customer experience, but it is also essential to deal with regulatory compliance.
FREMONT, CA: In this global ecosystem, technological developments have imposed a completely new order. Changing customer demands, open-source software, and free-to-use services are all driving significant changes in the production and distribution of goods and services. The strict lines between industries and companies are becoming more blur as entry barriers are crumbling down. The financial sector is not an exception.
FinTech were supposed to disrupt the conventional banking system when it all began. They noticed gaps that banks were unaware of and started to fill in the gaps by addressing unmet financial requirements and demands while enhancing customer experiences. However, the current situation suggests that FinTech's and banks will become increasingly interconnected and dependent on one another in the future. With technological development and advancement, the growth of FinTech has been accelerated.
[vendor_logo_first]The innovative FinTech's can become disrupted. The more FinTech penetrates the banking sector, the more they draw authorities' attention and some malicious third parties. As a result, now is the time for FinTech's to implement a compliance culture and address compliance issues while controlling risk management.
What Are the Compliance Risks for FinTech?
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FinTech has also begun to provide end-users with banking services. Money transfer, payment, and digital money storage are examples of such functions. Fintech firms are also designing new business models. Cryptocurrencies are a good example. Since cryptocurrencies have piqued the interest of both the financial industry and governments, cryptocurrency regulation is being discussed. If this can be accomplished, FinTech would have access to a broader market.
Increased Regulatory scrutiny
Few authorities have started to include Fintech firms to regulations that bind the finance sector, specifically banking. Some fintech firms have even been found guilty or accountable for their unintended involvement in such cases. Therefore, in some nations, FinTech companies are subjected to some of the rules applied to banks.
See also: Top Fintech Solution Companies
