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Alloy’s Report Highlights Compliance Challenges and Costs for Fintechs

FinTechAlloy's Report Highlights Compliance Challenges and Costs for Fintechs

Alloy, an identity risk management company, has unveiled a report revealing that 60% of surveyed fintechs faced compliance fines exceeding $250,000, with a third paying over $500,000. Larger fintechs reported higher fines, as 37% of those with 1,000+ employees paid over $500,000 in compliance fines last year.

The ‘State of Compliance Benchmark Report’ surveyed over 200 compliance decision-makers from U.S. financial technology firms. Results showed that 93% found bank secrecy act (BSA) compliance, including anti-money laundering (AML) and know your customer (KYC) requirements, challenging to fulfill. However, 80% of fintechs exceed the minimum risk management required for compliance, suggesting a need for comprehensive programs.

Fintechs prioritize customer confidence (34%) and reputational damage (25%) as key influencers on BSA compliance decisions, while 34% rated writing and filing suspicious activity reports (SARs) as the most time-consuming compliance task. Regardless of size, fintechs found SAR filing time-consuming, with 25% stating it takes 1-2 weeks per report.

To access more insights, refer to the complete report here.

By FCCT Editorial Team

Disclaimer: The views expressed in this article are independent views solely of the author(s) expressed in their private capacity.

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