The fintech market has been booming lately, with more tech companies clambering to bring the financial sector into 2022. This is an exciting time not only for finance but for fintech companies, developers, and investors that are driving the sector forward.
Working in fintech has never been more dynamic and exciting, but it does come with a significant barrier. Namely, the financial regulations and the associated financial and legal issues that come with the territory.
As it turns out, people take money seriously!
Of course, working within finance comes with regulatory standards. For the tech community, staying compliant with these regulations is a tight-rope act. That's what our CTO Nazariy Hazdun reflects on in his new article on Forbes.
As an aspiring fintech company, investor, or developer, fintech regulations are not exactly the most exciting challenge you’ll face. Fintech is a rapidly developing space, with plenty of excitement to go around. It’s essential to understand the core fintech legal issues to reap the rewards fintech offers. The three key areas are:
You may have already picked up on one of the complexities around fintech laws and regulations. Namely, there is not strictly a single overriding body of laws and regulations. Each major territory has laws specific to it that make the standard that needs to be met different, depending on where the parties are located. There is a lot of crossover in the different agencies and regulations, but at first glance, it might feel like a tangled web of bureaucracy!
To help you get a grip on the landscape, we have given a run down of the major regulatory bodies in the key territories.
The Conference of State Bank Supervisors (CSBS). The CSBS has been around since 1902. However, it is only in recent years that it has become involved in an attempt to standardize some of the licensing for fintech. This is a problem unique to the US, where different regulatory compliance standards exist in different states.
The CSBS started the Vision 2020 initiative to bring some unity to licensing and has had major success, lowering the barrier for entry for financial companies offering new technologies in the US.
In the US, there are also specific laws that control financial areas:
Do you know?
All the difference in one article, simply take it. Proven information by our CTO
Okay, that’s a lot to take in already. Luckily, in most cases, you will only need an awareness of these different governing bodies, laws, and standards. It is unusual for a fintech startup to operate in all these territories and come up against all regulations.
Before we look at some specific licensing examples, let’s take a moment to delineate some of the core areas of fintech.
We are going to run into the same problem here that fintech companies have in general when it comes to regulations. Namely, the rules change from place to place!
For example, in the US, state bank supervisors are a factor. However, there are some universally applicable truths.
Even conservative banks are undergoing digital transformations, but smaller, newer banks are being developed or already in operation that are luring customers away due to the benefits that come from their digital nativeness.
As we have seen, there is a lot of movement in the available tech-based payment systems. In the UK and Europe, there are dedicated organizations that can guide you around payment system licensing. In the US, this is covered, ultimately, by the CSBS.
So you will need to jump through some licensing hoops if you want to expand consumers’ ability to shop from the comfort of their homes, pay their bills on smartphones, and the like. But the rewards can be substantial, as this is a popular area of development; you just need to follow consumer protection laws.
A few tips
Choose the best payment system once and forever. Here are a piece of advice from leading FinTech software developer in Eastern Europe
As stablecoin is often pegged to a commodity or currency, it is more likely to require some regulatory compliance for new fintech. Blockchain, in general, continues to be a rich ground for development. The Stablecoin Trust Act was created by the government to regulate what commodities can be tied to crypto.
Geniusee Financial Software Development Services are designed to give any prospective fintech company the technical capabilities to realize its potential. This isn’t just about code; this is about bringing together a diverse yet highly connected set of skills and experiences to deliver a peerless and compliant end result. These services include:
With Geniusee at your back, you’ll have the technical clout to deliver your vision with confidence.
More organizations are looking to fintech as a fertile ground for technical development. This is totally appropriate, as consumer expectation, blockchain technology, and globalization create a need for the digital transformation of legacy institutes and for new, agile fintech companies to change the landscape.
However, for startups or companies that have had success in application development in the past, fintech offers a unique challenge. The regulations are complex, and the bodies that enforce them are far from toothless. These aren’t guidelines; they’re laws!
We have seen how fintech laws and regulations change depending on the country and the nature of the operation. In practice, most fintech companies will need to become experts in the specific regulatory practices of their chosen area—or else risk failure.
It is easy to get carried away with the big idea and overlook the (admittedly) tedious minutiae of financial regulatory compliance. However, apart from the mere need for compliance, these laws and regulations are ultimately a force for good, allowing companies to compete fairly, facilitating tax compliance, and mitigating the risk of money laundering. All help ensure financial stability, which is essential for the success of fintech.
If you need help or would like to learn more about building a neobank or implementing a payment system, contact Geniusee today.
Previous Next Having strong online payment systems in place is helpful not only to you but also to your clients.
Enjoy this blog?
Please, spread the word :)
Education Technology: A Complete Guide to EdTech
Best Automatic Machine Learning (AutoML) Frameworks in 2022
10 Retail trends 2022-2023 that will be relevant in the coming years
Development of high-load fintech applications
Have you used Automatic Machine Learning technology in your business yet? Read what are the best AutoML frameworks and write to us if you have any questions.
Written by Nazariy H.
What new trends will determine the future of Retail? We have selected the ten most notable trends that will affect business this year.
Written by Oksana T.
Do your system still work on heavy load? Find out all pros and cons of high-load applications and order one now to outstand your competitors with Geniusee.
Written by Taras T.
Get the right technical partner in Poland. Geniusee offers best custom fintech and edtech software development services across Eastern Europe
Written by Yaryna Y.
In this article, we share our knowledge and experience in developing cryptocurrency trading applications.
Written by Pavlo K.
Find out what technological solutions are in greatest demand in retail. Geniusee will help you develop the best go-to-market retail software based on trends.
In this article we will share information about git branching model. The git flow model was released by Vincent Driessen and helps to hotfix problems quickly.
Written by Ihor D.
Buy Now Pay Later (BNPL) solutions are popular alternatives to credit cards. With proper assistance, companies can develop their own BNPL apps.
Have you ever wondered how to keep a user on your website for ages and prevent exit for as long as possible? Here are some tips based on the Geniusee marketing team experience
Written by Sofiia K.
Find out what are the features of finance application development to ensure that your product will hit the market and bring your business to the top
After identifying business needs and problems, don’t wait to figure out which artifacts best suit your developer's requirements.
Written by Yevhen K.
Did you know Airflow can help you automate tasks in your IT workflow and boost your productivity? Here’s a detailed Apache Airflow overview to help you.
Written by Oleg S.
Check out how to provide an efficient incident response to possible cyber threats and malicious activities.
In this article, review ✔MLOps best practices, ✔ Risks & Challenges, ✔Benefits of MLOps solutions that automate and shorten the machine learning cycle.
Written by Sofiia V.
Are FinTech and RegTech the same? Find out the key definitions and technologies involved to understand the difference.
We can either change an existing retail software
solution or develop retail software from scratch that meets your requirements. Let's discover our
successfully implemented projects in the field of e-commerce.
An on-demand video learning platform that has reshaped the learning and development landscape in the global financial services industry. Designed to empower professionals with...
A sports marketing platfrom for athletes and companies that empowers marketing campaigns and brings brands and ambassadors to the next level of cooperation
A digital platform built to merge traditional banking systems with new-age digital assets such as cryptocurrencies and NFTs. The platform allows tracking and managing of children’s...
Android and iOS mobile app with automated payments, add geolocation services, integrate local market stakeholders, and as a result - the product for rapid grocery delivery in...
Meet one of our clients – Drum! This 5-star application is a platform designed for creators. That’s a great tool for people who care about their personal brands to engage with...
Our client, a technology solutions company in MedTech, aims to make the latest technological advances available to millions by providing high-caliber, more affordable solutions...
Our main goal was to develop a digital platform for healthy habits called EinkaufsCHECK. We aimed to create a hybrid app for iOS and Android for the easiest and most accurate...
Our client is a secure, automated platform that streamlines the merchant cash advance process and enables ISOs and lenders to manage their businesses from one centralized, convenient...
For Crave retail Geniusee has developed 2 enterprise mobile applications that solve the double-sided problem for every shopper visiting the fitting room. The Fitting Room application...
Outstanding case in Geniusee portfolio, Pause – mobile app for meditation. iOS application was downloaded 1000+ times on the launch day.
The Ajuma company was founded by a couple after the birth of their child. They wanted to protect their baby from the harmful effects of ultraviolet radiation sunburn and from...
Zedosh is a new digital advertising platform that financially empowers Gen Z. Using Open Banking, we provide insights into their spending behaviour, tips on how to master money...
Revenu is an All in one POS (Point of sale) management system . It uses the latest trends of technology to manage different types of Food & Beverage from scratch up to reaching...
Realm Five develops devices that collect various data, such as soil moisture, rainfall, amount of water in tanks, condition of tractors and their location, etc. from different...
FactMata is an AI-based platform that identifies and classifies content. Advanced natural language processing learns what different types of deceptive content look...
Tradesmarter is leading in providing white label trading solutions offering a web responsive trading platform that enables top financial companies to unleash a new...
Swoon is an online furniture brand with a difference. Their main idea is that everyone should be able to buy beautifully designed and crafted furniture at reasonable...
Frenotec LLC is a motorcycle distribution company eventually grew into the nation’s largest distributor of Brembo motorcycle brake components as well as became the...
Validify Access is a new innovation discovery platform that showcases only best-in-class and pre-vetted emerging retail technology solutions. Validify helps leading...
NCourage was created to understand the nature of anxiety & stress, the cause of problems with falling asleep, which promotes personal growth, success work and...
Wyzoo App is built on artificial intelligence and learning techniques to identify patterns in your customer data.
Tamam on-demand mobile application connects customers with independent local couriers, who acquire goods from any restaurant or shop in a city and also deliver urgent...
DigitalBits™ is an open-source project supporting the adoption of blockchain technology by enterprises. The technology enables enterprises to tokenize assets on the decentralized...
The blockchain based platform - Totalizator. The goal of this R&D project was to validate the possibility of using blockchain technology in order to create an objective...
The Virtual Console is the graphics space that actually allows you to control your light shows during live events. It visually displays a number of so called widgets and...
PoolParty app allows increasing your popularity on Instagram by sharing links to the community of users, that will like, share and follow such links.
My Uber app allows everyone with a car to join the community of uber drivers within a couple of clicks - the company will take care of everything else. My Uber provides support...
This system empowers traders with the possibility to quickly analyze cryptocurrency market information.
This system provides a complete omnidirectional view for armored vehicles crew (transparent walls effect) and the possibility to receive necessary data and interactive tips...
BuzzShow is a video social media network which incorporates the blockchain technology in a reward-based ecosystem. The platform offers full decentralization and a unique social...
ZaZa is an expert in online learning and education abroad that helps its clients to get the highest quality services for quite affordable prices. They bring together native-speakers...
PrintBI has the largest and most detailed database of printing companies worldwide, powered by advanced technologies and...
Tell us how we can help you.