FinTech Compliance: How to Stay Ahead of the Game

FinTech Compliance: How to Stay Ahead of the Game

FinTech companies make their mark by using technology to give consumers more control and access to their finances. New markets such as digital lending, payments, and digital wealth management have emerged and continue to see rapid growth in part because they are giving consumers more power over their finances. 

A strict regulatory environment stands to potentially shatter their business models, making it necessary for them to become much more like major players in the brick and mortar banking space than they would otherwise aim to be. Many traditional banks have created a FinTech division and have rebranded it to compete, making it even harder for traditional FinTechs to compete in the market.

FinTech company leaders on the lookout for metastasizing market risks have been compelled to seek out an uneasy alliance with the very same banking organizations they were initially competing with. Some have chosen the charter route to mitigate risks. This poses many benefits, but the long term viability of new charters released specifically for FinTech organizations remains uncertain. 

Moreover, such charters transform FinTech companies into special purpose national banks, placing them in a position similar to that of traditional banks in terms of regulatory guideline adherence and strict federal oversight. Other alternatives, including state banking charter options and special business licenses give FinTech leaders a lot of options to consider, but potentially stifle their flexibility in the market. Partnerships, mergers, and acquisitions of FinTech companies by established banking giants could also put a swift end to innovation in the space.

FinTech companies that have yet to go the regulated route may have come to terms with higher risks being a semi-permanent fixture on their developmental roadmap. Avoiding fines and outright bans by jurisdiction, though a complex and unpredictable process for such businesses, is often taken as a given. 

However, those that succeed at scale are carrying the compliance torch as a tool to broaden the scope of their offerings. This is true for companies like Payoneer who are positioning themselves as a compliance software company on top of their innovative financial services.

Increasing Risk with “Regtech”

FinTech companies with few or zero plans to accommodate such regulatory mainstays as Know Your Customer (KYC) compliance processes are increasingly at risk of incurring heavy fines. 

Even worse are cease and desist orders issued at state or national levels, as these can quickly put such organizations out of business. FinTech must take on a new identity as regtech in order to remain viable, but risks abound in this arena as well.

Regtech takes on the task of managing complex compliance procedures so individuals and organizations won’t have to. However, regulations are constantly in flux, urging FinTech companies invested in handling compliance on their own to keep up with the kind of legal expertise and team size that comes at a considerable cost. 

With so many factors in the space still up in the air, merely choosing whether to hire or automate as a means of handling compliance is a tricky affair with no clear-cut answer. Leading the way in this area involves shouldering the burden of risk posed by regulators.

Staying Ahead of Compliance Issues

Given the complexities inherent to FinTech business models, their compliance strategies do not necessarily mesh well with one another. This makes one size fits all solutions unlikely to provide much of a benefit to individual organizations in the space. Instead, a tailor-made approach to compliance should be adopted. 

Custom compliance strategies and solutions should be based on your company’s business model and its long term strategy. This means your team will need to assess its own needs before fleshing out its compliance processes. Setting priorities that echo throughout your organization plus specifying pressure points and parts of your system where special measures must be taken to remain compliant should be at the top of your to-do list.

Tech is Key

Once your team reaches a point at which necessary controls have been highlighted and relevant regulations have been identified, your choice of compliance technology becomes pivotal to your business’s success. 

Seamless integration of KYC controls and other such techniques involves the use of purpose-built tooling that can be relied on at scale. ID validation plays a critical role in this process, allowing your company to vet customers and weed out bad actors, but not all validation solutions can be trusted to perform at an enterprise level. Intellicheck can.

Intellicheck offers powerful ID validation solutions for both digital and physical systems. For FinTech businesses, Intellicheck’s ID validation software reduces risk of non-compliance and human error with an industry-leading accuracy rate of 99.9%. This solution parses the security features of an ID in addition to performing powerful facial matching and liveness scans.

IDs are checked quickly for authenticity by Intellicheck’s easy to integrate platform and matched to the people presenting them as well–all in less than a second. With Intellicheck, you can have an ID validation check integrated into your system via the API or make use of the turnkey validation portal to get up and running in no time.


To see a recorded demo, click here.

A transaction takes place every time you scan /validate an ID.

The transactions that you purchase are available for use for up to one year from the purchase date. When you run out of transactions, you automatically purchase another bucket of the same number of transactions that you originally purchased.

Groups allow you to set-up notifications that are shared across a specific set of devices. For instance if you marked a person as “do not serve” that alert would show when their ID was scanned by any user in the group.

Once you fill in the application form and are approved for purchase, you will be sent a credit card payment link. Once you have made your first payment, then Intellicheck will get you set up and ready to go.

Intellicheck Mobile is the app that your employees use to scan IDs. Once you have your account set-up, you can go to the Apple App Store or Google Play Store to download it for your device. Google Play Store Apple App Store

Standard pricing includes up to 5 devices. These devices will require a separate login, and can be set on the Intellicheck Admin Portal. Customers receive a link to the Admin Portal after they are set up.