Looking at the year’s top trends in embedded finance risk management and compliance
Alloy surveyed more than 50 professionals at financial institutions operating bank sponsorship programs in the United States to learn how their businesses are responding to compliance challenges in embedded finance.
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We’ve highlighted five key insights from the report below.
Partnerships between banks and fintechs are a cost-efficient approach to catalyze growth through increased deposits, seamless UI, and accelerated innovation.
The embedded finance boom resulted in many banks testing the waters of bank sponsorship programs. As the complexity of managing these programs grows, we may see sponsor banks with less sophisticated embedded finance programs and tech stacks leave the space entirely.
Reputational damage often results in increased regulatory scrutiny, including more frequent examinations and document requests. This heightened oversight can strain resources and pose ongoing operational challenges.
Lack of control and audibility over fintech partners’ policy controls were cited as top challenges to meeting compliance requirements. Managing compliance across multiple jurisdictions and adapting to evolving regulatory changes were also top concerns.
As attention surrounding compliance missteps has grown over the past few years, there are new tech solutions available to help bridge the gap between sponsor banks and fintechs.
Respondents included 51 decision-makers from financial institutions operating bank sponsorship programs in the United States.
Surveys were conducted by The Harris Poll, a leading survey platform for over 60 years.