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Compliance for Early-Stage Fintechs

February 28, 2024

Start-ups are by nature disruptors, an organization of people who have spotted an opportunity to provide

better services or new products to improve people’s lives. In the fintech space, this often means faster, cheaper, or

more accessible financial services solutions that place the customer at the center of the experience.


One of the most significant and critical barriers encountered when launching a new Fintech venture is compliance. Compliance represents an inevitable hurdle that every Fintech founder must overcome to bring their innovative ideas to market. While founders anticipate the need for compliance when entering the market, they often underestimate the depth of compliance requirements imposed by sponsor banks or other similar Banking-as-a-Service arrangements. This discrepancy can lead to significant stress for founding teams, who find themselves dedicating half of their time to navigating compliance instead of focusing on building their business. This causes teams to engage with numerous lawyers, consultants, and technology vendors in the hope of implementing a program that will satisfy the sponsor’s requirement to not delay the launch. 

Typically, we see early-stage start-ups struggle in 3 key areas:

Expertise: AML, CTF, KYC, EDD, PEP, ID&V, etc, etc…  Early-stage fintech start-ups simply often lack compliance expertise, leaving them scrambling to address sponsor bank demands. One significant challenge we often witness is when fintechs are given boilerplate policies by lawyers or consultants without understanding that these policies must be translated into actionable practices. Unfortunately, the providers of these policies typically do not undertake this implementation, leaving the founding team to redirect their efforts towards building compliance measures with limited knowledge, without assurance that they will meet sponsor requirements.


Compliance Tech: There are many tools out there required to perform critical compliance functions such as transaction monitoring (TM), sanctions screening (SS), and identity verification (IDV), all with both overlapping and unique features. As such, founding teams find themselves talking to vendors left, right, and center, who all claim to be the best solution. Founders often fail to answer the following questions when selecting their compliance tool… Does it fulfill everything I need to address my requirements and risks?  Will this solution scale with my business? Is it easy to configure, and maintain? More importantly, do I even need to buy one now, or can I simply build an interim solution that will satisfy all requirements while scaling the business up? 

Hiring: You can’t have a full compliance department on day 1. Founding teams lack an understanding of what day-to-day compliance activities involve, what skills are required to investigate alerts coming out of my compliance systems, and the list goes on.

Large or small, it’s critical for Fintechs to implement a robust compliance program. This is particularly the case as regulators have a renewed interest in the fintech industry and have singled out sponsor banks that enable fintechs for enhanced scrutiny and examination standards.  As a result, sponsor banks, and other partners, are increasingly placing that regulatory burden on their Fintechs directly, demanding more sophisticated and higher quality compliance programs that many fintechs struggle to implement alone.

Compliance as an Enabler

Despite these myriad of challenges, building an effective compliance program does not need to be a blocker for your company’s success. At StrategyBRIX, we specialize in helping early-stage companies establish and develop their compliance programs with a focus on safe and compliant growth. Here’s what we can offer you to help set up your company for success.






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If you’re an early-stage fintech looking for someone to design, implement, and manage your compliance program, look no further. StrategyBRIX, fulfilling your compliance needs A-Z.

Written by Monte Barker, Manager, StrategyBRIX
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