Blog•9 min read•FinTech
FinTech Regulatory Compliance: A Startup Guide
Navigate the complex world of financial regulations without breaking the bank
Compliance is Non-Negotiable
Financial regulations carry severe penalties. This guide covers the essentials, but always consult legal counsel.
Key Regulations by Region
United States
- MSB Registration: Money Service Business license for payments
- State Licenses: Money transmitter licenses in each state
- Bank Secrecy Act: AML/KYC requirements
- PCI DSS: Payment card data security
- SOC 2: Security and availability controls
European Union
- PSD2: Payment Services Directive requirements
- GDPR: Data protection and privacy
- EMD: E-money Directive for digital wallets
- MiFID II: Investment services regulations
- AMLD: Anti-Money Laundering Directive
Compliance Roadmap for FinTech Startups
Phase 1: Foundation (Months 1-3)
- Consult with FinTech lawyers
- Choose your regulatory strategy
- Partner with a compliant bank/processor
- Implement basic KYC/AML
Phase 2: Implementation (Months 4-6)
- Build compliance infrastructure
- Apply for necessary licenses
- Develop policies and procedures
- Train your team
Phase 3: Operations (Ongoing)
- Regular compliance audits
- Transaction monitoring
- Regulatory reporting
- Update policies as regulations change
Cost-Effective Compliance Strategies
Partner Don't Build
Use Banking-as-a-Service providers to inherit compliance infrastructure.
Start Small
Launch in one state/country first, then expand gradually.
Use Templates
Leverage existing compliance frameworks and adapt them.
Automate Early
Invest in compliance automation tools from day one.
Red Flags to Avoid
- Operating without proper licenses "temporarily"
- Ignoring state-level requirements
- Inadequate KYC/AML procedures
- Poor record keeping
- Delayed suspicious activity reporting
Need Compliance Help?
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