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Regulatory Compliance for Fintechs in Madagascar: A Growing Concern
As fintechs continue to revolutionize the way people manage their finances, they are also increasingly exposed to regulatory requirements, sanctions, and legal actions. In this rapidly changing landscape, it is crucial for fintechs to stay ahead of the curve and ensure compliance with regulatory norms.
Fintechs and Banks: Blurring the Lines
Historically, fintechs have prided themselves on being non-financial institutions, operating outside the traditional banking framework. However, recent developments suggest that this distinction may be blurring. Some fintechs are now considering or pursuing bank charters, which would allow them to operate more broadly and avoid disparate regulatory requirements across individual states.
Fintech Risk: So Many Ways to Err
Regulatory actions against fintechs share several common traits:
- Involving well-known fintech companies as well as lesser-known startups
- Being recent and illustrative of the regulatory action being taken today
- Highlighting regulatory, operational, and reputational risks that threaten the safety and soundness of financial institutions
Rising Regulatory Voices
In 2016, the Office of the Comptroller of the Currency (OCC) published a paper on its vision for responsible innovation in the federal banking system. This initiative opened the door for fintechs to work collaboratively with regulators to develop solutions specific to their product offerings.
The Future of Fintech
Regardless of whether fintech companies choose to become chartered institutions or remain as they are, having solid risk management controls in place can increase their potential for success. A compliant company may be more attractive to the public, open doors to market share and revenue growth, and provide comfort to stakeholders.
Regulatory Compliance: The Key to Success
In a rapidly changing regulatory landscape, fintechs must prioritize compliance with regulatory norms. By understanding the regulatory requirements and implementing effective risk management controls, fintechs can position themselves for success and stay ahead of the curve.
About Deloitte’s Regulatory and Operational Risk Practice
Deloitte’s Regulatory and Operational Risk practice helps businesses navigate complex regulations and volatile operating environments. Our team of experts provides guidance on regulatory compliance, operational risk management, and financial advisory services to help clients create value and protect their interests. Learn more about our services at deloitte.com/madagascar.