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Compliance and Regulatory Issues for Fintech Companies in Singapore
For fintech companies, the future may be promising, but it also brings increased exposure to regulatory requirements, sanctions, and legal actions. As the industry continues to evolve, it’s essential for fintechs to stay ahead of the curve and navigate the complex landscape of compliance and regulation.
Fintechs and Banks: Blurring the Lines
Historically, fintech companies have prided themselves on being outside the traditional banking system, unencumbered by regulatory requirements. However, recent developments suggest that this may be changing. Some fintechs are now considering or pursuing bank charters, allowing them to compete more broadly and avoid disparate regulatory requirements across individual states.
Fintech Risk: So Many Ways to Err
Recent regulatory actions targeting fintech companies share several common traits. They involve fintech companies, often household names or upstarts, and highlight regulatory, operational, and reputational risks that threaten the safety and soundness of a bank or financial institution.
Rising Regulatory Voices
Regulatory bodies are taking notice of fintech’s growing influence in the financial industry. The Office of the Comptroller of the Currency (OCC) has published a paper on responsible innovation in the federal banking system, opening the door for fintechs to collaborate with regulators and develop solutions specific to their product offerings.
The Future of Fintech
To succeed in a more regulated environment, fintech companies must prioritize solid risk management controls. Having effective compliance measures in place can increase a company’s potential for success, attract market share and revenue growth, and provide comfort to stakeholders.
- Effective compliance measures include:
- Implementing robust risk management processes
- Ensuring compliance with regulatory requirements
- Conducting regular audits and assessments
- Maintaining open communication with regulators
Deloitte’s Regulatory and Operational Risk Practice
As businesses face complex regulations and volatile operating environments, Deloitte’s Regulatory and Operational Risk practice helps companies protect and create value by effectively managing regulatory and operational risks. Learn more about our services [here](insert link).
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Author: Gina Primeaux, Principal, Deloitte Risk & Financial Advisory