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The Future of Fintechs
Risk and Regulatory Compliance
Historically, the mantra of the fintech industry has been: “We are not financial institutions.” Unconstrained by many regulatory requirements that are applicable to banks and other financial institutions, fintechs pride themselves on creating deep customer connections, navigating market trends agilely, and creating disruption for traditional competitors.
But recent regulatory and industry developments suggest the future of fintech will see a potential blurring of the lines: Some fintechs are considering or pursuing bank charters, enabling them to compete more broadly and to avoid having to address disparate regulatory requirements across individual states where they conduct business. Banks are courting—and, in some cases, are already working with—fintechs to leverage their disruptive capabilities and meet the demands of tech-savvy consumers.