Compliance remains the biggest challenge for companies adopting Fintech solutions according to a recent report by Thomson Reuters.
The report further notes that 21% of the world’s firms believe that Regtech will impact their compliance monitoring. At the same time, the need for risk and compliance functions to have more involvement in assessing the implication of fintech innovations.
The need to assess implications comes from increasing uncertainties created by fintech innovations. Further, 2018 has seen fewer firms who believe that their compliance and risk approach aligns with their approach to fintech.
Firms whose risk and compliance function employs their fintech approach dropped from 37% in 2017 to 18% in 2018.
Compliance remains a major challenge associated with the adoption of fintech. In a global arena, the lack of common vocabulary poses a great challenge to both the companies and legislators.
Concerns over compliance echo for both regulators and firms. Nevertheless, regulators globally are trying to create a business environment that enhances fintech benefits and minimize outcomes for consumers. One of the popular approaches entails using a sandbox, where companies test new solutions without the full weight of regulation.