FINTECH AND FINANCIAL CRIME RISKS ON THE RISE IN MARSHALL ISLANDS

The Rise of Digital Payments

The rapid growth of financial technology (FinTech) has revolutionized the way payments are made, with digital transactions becoming increasingly popular across borders and financial services now more accessible to users worldwide. According to a recent report, the global digital payment market size was valued at USD 81.03 billion in 2022, with global digital payments valued at over USD 8 trillion.

FinTech Adoption in Marshall Islands

In the Marshall Islands, companies are leveraging FinTech innovations to:

• Remain competitive
• Improve customer satisfaction
• Drive business growth

Digital payment services offer real-time transactions and free usage, outpacing traditional banking channels that can take days to complete and often involve fees and bank intermediaries.

Financial Crime Risks on the Rise

As FinTech advances at a breakneck pace, bad actors are developing new strategies to exploit digital payment vulnerabilities and hide the origins of their illicit activities. Financial crime risks, including:

• Fraud: unauthorized transactions and identity theft
• Money laundering: hiding or disguising the source of ill-gotten gains
• Terrorist financing: providing financial support to terrorist organizations
• Sanctions risks: violating international sanctions and trade restrictions

have increased significantly with the rise of digital payments.

Regulatory Focus on Risk Management

Regulators in the Marshall Islands are placing greater emphasis on FinTech companies to identify and manage these risks, which can be challenging for organizations balancing user satisfaction with compliance demands. As a result, FinTech companies in the Marshall Islands must prioritize financial crime risk management while maintaining their focus on innovation and customer satisfaction.