Skip to content Skip to navigation menu
Your browser is not supported by this site.
Please update to the latest version, or use a different browser for the best experience.

White Paper

Five best fintech compliance
and regulatory practices for
financial professionals

Meet investigation and compliance demands with CLEAR

Thomson Reuters CLEAR gives banks and other payment processors a cost-effective way to screen for transaction laundering and meet their Know Your Customer (KYC) and Know Your Vendor (KYV) due-diligence requirements.

Learn more about CLEAR


While they began somewhat at odds, financial institutions and financial technology (fintech) companies are now cozying up to one another. The arrangement suits both sides; banks and credit unions get access to innovative technology they don’t have to develop in-house, and fintechs get a ready-made audience of customers to use their service.

But it’s not all roses for bank-fintech partnerships. With regulators giving extra scrutiny to these new innovative technologies, fintechs and the banks that partner with them need to be extra careful they are compliant with regulations new and old. With that in mind, here are five best practices that every financial professional should know when it comes to fintech compliance.

1. Digital-only enterprises. Regulators could soon be making new rules on how fintech and digital-only banks operate. Last year, the OCC released a proposal for a national fintech charter, which would allow fintechs to offer full banking services but be subject to more scrutinized regulation. Already, it has sharply divided opinions in the industry,1 and some aren't event waiting on the OCC before making grand plans. Recently a popular online lending company went full-on to pursue an application with the FDIC for an industrial bank charter. The company is seeking to offer its customers an FDIC-insured checking account and a credit card product. Further, it has designs to be a digital-only bank, with no branches or deposit-taking ATMs.2 It is important for the industry to see how the FDIC eventually rules in this matter. It could determine whether a large number of other digital-only operators look at the landscape and decide they also want to try their hand at full-service banking.


Fine levied against a digital currency operator for not having an adequate AML program.

2. AML scrutiny. Banks have long had to comply with the many aspects of anti-money laundering (AML) compliance, but fintechs too must comply with the rigorous standards in this area. Up until now some haven’t, and if they don’t they can find themselves on the wrong end of regulators’ wrath. One such case took place in 2015, when the Financial Crimes Enforcement Network (FinCEN) levied a $700,000 penalty against a digital currency operator, since it was found to not have an adequate AML program.3 This company already made partnerships with many banks,4 who could have potentially been implicated for their association with the company, making it of great importance that banks perform due diligence before engaging in fintech partnerships.

3. Keeping consumers in mind. It’s no secret that since its inception, the Consumer Financial Protection Bureau (CFPB) has been zealous – some would say overzealous – in targeting financial institutions it has deemed violated consumer rights. This has extended not only to established financial institutions, but fintechs as well. One such fintech, a consumer lending company, was required to pay a $6 million fine after the CFPB said it violated consumer lending laws by not offering borrowers the proper chance to improve their credit or get loans at lower rates.5 Since many financial institutions partner with online lenders – who are popular with consumers for their speed of issuing loans and digital nature – they need to also show vigilance in this area.

4. Know your customer. Fintechs also struggle with the demands of know your customer (KYC) compliance. With banks putting a greater priority than ever before on rooting out fraud and shutting off terrorist financing, it is crucial that KYC compliance with fintechs be top-notch.

5. Plan ahead. Finally, it is worth noting that the regulatory view towards fintech is still in the beginning stages and constantly evolving. Initially, regulators often had difficulty dealing with fintechs, since they differ from traditional banks. But regulators are increasingly coming to terms with how to make sure fintech companies are compliant in a financial regulatory framework, without stifling the innovation that makes them so appealing to consumers. Even at a recent G20 summit, host country Germany made the argument that the stability of the world’s financial system hinges in no small part on fintech regulation.

Like banks, fintechs should make collaboration with regulators a priority and stay on top of the latest compliance developments, in order to ensure consumers still have access to the digital financial services they have come to love while remaining in the good graces of regulators.

How Thomson Reuters Can Help

CLEAR investigative technology provides a solution for your compliance and investigative needs. By providing consistent, comprehensive, and defensible investigative results, CLEAR can uncover weak links in a customer's or vendor's history in the form of politically exposed persons, criminals, bankruptcy, high-risk business officials, and other dubious entities. With CLEAR you can:

  • Access key proprietary and public records in one intuitive environment
  • Enable batch alerting to run one search for a large number of people and businesses
  • Receive real-time records such as arrests, watch lists, and social media
  • Instantaneously analyze search results to shorten investigation time and uncover hidden unknowns
Request your FREE person or business investigations search



Thomson Reuters is not a consumer reporting agency and none of its services or the data contained therein constitute a ‘consumer report’ as such term is defined in the Federal Fair Credit Reporting Act (FCRA), 15 U.S.C. sec. 1681 et seq. The data provided to you may not be used as a factor in consumer debt collection decisioning, establishing a consumer’s eligibility for credit, insurance, employment, government benefits, or housing, or for any other purpose authorized under the FCRA. By accessing one of our services, you agree not to use the service or data for any purpose authorized under the FCRA or in relation to taking an adverse action relating to a consumer application.