Deep Dive: How FinTechs, FIs Can Arm Up Against Fraud

Financial services providers that slack on regulatory compliance and fail to safeguard their operations against money laundering, terrorist financing and other criminal activities may face damaged reputations and significant fines. Compliance failures are prevalent worldwide: Approximately $26 billion worth of fines were levied against banks for AML, KYC and sanctions noncompliance between 2008 and 2018. A report found that the U.S. imposed a full $23.52 billion -- 91 percent -- of those penalties, while European regulators demanded $1.7 billion and the Middle East levied $9.5 million. FinTechs could face these same financial pains as regulators increasingly demand that they follow the compliance rules to which FIs must adhere. The People's Bank of China announced in March that it plans to create rules for regulating and securing the FinTech sector, for example.