Fenergo, a leading provider of digital solutions for Know Your Customer (KYC), Transaction Monitoring, and Client Lifecycle Management (CLM), has conducted a comprehensive study on the emerging risks in the FinTech payments sector since the introduction of FedNow.
The study involved high-level risk and compliance officers across various payment companies, including P2P payments platforms, mobile payment apps, and digital/virtual asset service providers. Fenergo’s analysis sheds light on the challenges brought about by the rapid pace of real-time payments, particularly in the areas of fraud prevention, security protocols, and regulatory compliance.
The study’s findings indicate that 42% of risk and compliance officers at FinTech payments companies face challenges in ensuring a smooth user experience during compliance operations as they adopt FedNow. At the same time, 69% expressed concerns that neglecting the adoption of FedNow could have a negative impact on their business operations, ultimately leading to an unsatisfactory customer experience.
Fenergo’s analysis also uncovered several concerns among risk and compliance officers in FinTech payment companies. A significant 78% highlighted inadequate staff training as a top concern, emphasising the need for proper training in the face of evolving compliance requirements.
Furthermore, 34% of respondents reported a lack of anti-financial crime talent, underscoring the importance of talent acquisition in this field. Cumbersome manual KYC procedures (67%) and limited collaboration with regulatory authorities (65%) were other notable challenges identified.
Despite the numerous challenges faced by risk and compliance officers in the FinTech payment sector, all respondents acknowledged difficulties in securing sufficient funding to invest in new technology and enhance compliance efforts. For 43% of those surveyed, the struggle lies in predicting future compliance needs amid regulatory shifts, while 30% cited a prioritisation of sales-driven projects over compliance, potentially risking regulatory fines and long-term reputation damage. The remaining 27% grapple with limited stakeholder awareness or uncertainties regarding return on investment (ROI) and long-term benefits.
Fenergo conducted this survey involving 100 high-level risk and compliance officers from FinTech payment enterprises across the United States, representing diverse sectors within the industry.
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