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Fintechs Struggle with Compliance: How Banking-as-a-Service (BaaS) Providers Can Help
Compliance is a critical aspect of the fintech industry, but many companies lack the resources and expertise to manage it effectively. Implementing and operating a resource-intensive set of program components can be overwhelming for even the most experienced teams. This includes:
- Foundational compliance policies
- Risk assessment methodologies and matrices
- Independent testing plans and workflows
- Compliance training content and assessments
- Various compliance procedures and controls
- Ongoing “state of compliance” reporting
- Compliance issue program management
To evaluate subject matter expertise, reporting capabilities, program policies, issues and risk management, internal training curriculum, and more, fintechs often turn to external compliance consultants. However, these experts may not have the product expertise necessary to effectively marry regulatory knowledge with your specific product.
The Benefits of Banking-as-a-Service (BaaS) Providers
A BaaS solution can offer both product excellence and compliance expertise, making it an attractive option for fintechs. These providers oversee and manage various elements, including:
- Embedded finance needs
- Financial partnerships
- Compliance infrastructure
This allows fintechs to use a single system for building their offering, growing their feature set, and managing compliance requirements.
Evaluating BaaS Providers for Compliance
When evaluating a BaaS provider for compliance, fintechs should consider the following criteria:
- Relationships with multiple banking partners to ensure reliable solutions with redundancy measures
- Demonstrated ability to enforce compliance requirements
- Level of detail needed in use case supportability and onboarding
- Number of full-time employees working on compliance and years of experience
- Ability to support multiple types of companies across industries and business models
- Ability to support businesses in getting started and operating at scale
How Stripe Can Help
Stripe is a leading BaaS provider that offers a suite of financial features, including:
- Payments
- Lending
- Cards
- Bank account replacements
With over 11 years of experience working with banks, Stripe has developed a durable structure for financial partnerships and compliance. Their in-house compliance program is refined by team members who regularly meet with banks to ensure that all necessary processes, disclosures, reporting, and controls are in place.
By leveraging Stripe’s expertise and technology, fintechs can quickly and safely onboard users, create a compliance-focused card program, offer bank account replacements, and more. Get in touch with their team to learn more about how you can use Stripe to quickly, easily, and compliantly offer your own financial services.