Fintech companies often move quickly, and compliance can feel like it's in tension with that speed. But BSA/AML obligations apply based on the financial activity a company actually performs, not on whether it calls itself a "tech company," and banking partners increasingly expect a mature compliance posture before they'll work with a fintech at all.

Why Fintechs Are in Scope

Many fintechs rely on a bank partner to move money, hold funds, or issue cards. That structure doesn't remove the fintech's own compliance obligations. Depending on its role, a fintech may itself qualify as a money services business or be treated as an agent of its bank partner, either of which brings its own BSA/AML expectations.

What Bank Partners Expect

Banks that provide banking-as-a-service or sponsor bank relationships are themselves examined on the adequacy of their fintech partners' compliance programs. As a result, they typically require fintech partners to demonstrate a written AML program, KYC and customer due diligence procedures, transaction monitoring, sanctions screening, and a designated compliance function, sometimes before onboarding is even complete.

Common Pitfalls

  • Building compliance as an afterthought: retrofitting a compliance program onto an existing product is harder and more expensive than designing it in from the start.
  • Underestimating KYC friction: user experience and compliance requirements need to be designed together, not treated as competing priorities.
  • Assuming the bank partner "handles" compliance: partnership agreements typically make clear that the fintech retains significant compliance responsibility of its own.
  • Scaling faster than the compliance program: rapid user growth without a corresponding scale-up in monitoring and staffing is a frequent source of regulatory findings.

Building a Program That Scales

The strongest fintech compliance programs are built with growth in mind from the outset: risk-based (not one-size-fits-all) customer due diligence, monitoring rules calibrated to actual product risk, and clear escalation paths as transaction volume increases.