5 Effective Ways of Handling Compliance for Fintech Companies in 2022

The fintech industry is evolving at an astounding rate. The need for fintech firms to adapt is drastically increasing, as are the number of complications that firms face when trying to stay compliant. A lack of proper compliance can be detrimental to the success of a fintech firm.

Just like any other industry, fintech firms have to comply with certain rules and standards that govern their behaviour. However, the fintech industry is constantly evolving and adapting, thus making compliance a daunting task.

There are, however, certain ways through which fintech firms can mitigate their compliance risk before it becomes a problem. This article will outline the five most effective ways of managing compliance for fintech companies.

Create a compliance plan

Creating a compliance plan will help a fintech firm identify and address potential problem areas. Through a compliance plan, a fintech firm will define what its compliance strategy will be and which policies and procedures need to be upheld in order to stay compliant.

The plan will also identify potential areas that could be problematic and ways through which the fintech firm can mitigate those risks.

A compliance plan should, at a minimum, include business objectives, risk tolerance, policies such as email retention policy, code of ethics, and investigatory and reporting procedures. The plan should also include an overview of regulatory requirements that might affect a fintech firm, as well as cybersecurity requirements.

Coordinate with existing regulatory bodies

Fintech firms should coordinate with other regulatory bodies. Doing so allows fintech firms a better understanding of the rules and regulations that are applicable to them and helps fintech firms anticipate any possible issues before they arise.

The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) are some of the main regulatory bodies that regulate fintech firms in the UK. Fintech firms in the US coordinate with the Financial Industry Regulatory Authority (FINRA), Consumer Financial Protection Bureau (CFPB), Securities and Exchange Commission (SEC), and others.

Coordinating with regulators allows fintech firms to:

  • Demonstrate a sense of responsibility
  • Gain a deeper understanding of the rules and regulations
  • Receive guidance on what regulators expect of them
  • Receive an update on regulatory changes
  • Allow regulators to better understand what fintech firms do
  • Ensure compliance with regulations and mitigate risks

Identify potential compliance risks

Identifying and preparing for potential regulatory risks is one of the most effective ways of managing compliance.

Risk management helps fintech firms identify and address potential risks. These risks can be related to reputation, regulations, or technology.

Reputational risks are a risk that an organisation’s reputation could be harmed by the actions of its employees, management, or third parties. Technology risks are risks that arise from the use of technology.

Risks can be also related to regulation. Regulatory risks are risks that arise from failure to comply with laws, regulations, license requirements, or codes of conduct.

Use technology to mitigate the risks

Technology has made it easier for fintech firms to stay compliant. With the help of technology, fintech firms can automate various processes, which will not only mitigate the risks of non-compliance but also help fintech firms reduce costs.

For example, automating processes such as data archiving (with the help of a third-party service provider) will free up a lot of time for the fintech firm’s employees, which would, in turn, allow them to focus on more strategic and revenue-generating activities. Not only can automation help save valuable time, but it also mitigates the risk of human errors related to data retention policies and eDiscovery requests.

Technology can also help detect errors or anomalies in the data. Fintech firms are data-driven organisations, and any discrepancies or irregularities in the data can adversely impact the business. Therefore, using data validation tools can help a fintech firm mitigate the risks.

Educate employees

Besides implementing the right technology, fintech firms should ensure that their employees have the necessary knowledge, training, and access to technology. This can be done by creating a compliance manual, which outlines the firm’s compliance policy and procedures.

A fintech firm can also train its employees on topics such as anti-money laundering (AML), anti-bribery, and fraud prevention.

Employee education is particularly important in firms operating in highly regulated markets.

Fintech firms can use technology to help employees gain the necessary knowledge. For example, they can implement a knowledge management (KM) system. This can be useful for onboarding new employees and allowing them to learn more about the company.


Compliance is an integral part of the fintech industry. Compliance issues can prove to be detrimental to a fintech firm’s success. If a firm fails to comply with regulatory requirements, it may face increased regulatory scrutiny or fines.

Regulations are constantly evolving, with new regulatory requirements coming all the time. The fintech industry is therefore facing new challenges and must adapt to these changes.

Author Alex Morgan

Author, Alex Morgan

Work Hard, Rest Fun: How to Take a Break From Work

Work breaks are important! Imagine that two employees work in an office from nine o’clock to seven o’clock in the evening. The first rests only 20 minutes during lunch. The second has lunch for 40 minutes, sleeps for 15 minutes after lunch, goes out for a short walk closer to five in the afternoon, and takes short breaks the rest of the time.

That is, he works almost two hours less. But he gets a lot more done because by four o’clock, he is already so tired that his productivity is very low, his attention is scattered, and he is easily distracted.

To keep your work from turning into visibility, to feel energetic for the rest of the day, we prepared an article on proper rest based on materials from our novelty book.

Take a Minute Break

During short work breaks, do short physical exercises whenever possible. A barbell is also good – some people have one in the office. If you work at home, it’s even easier: you can install the horizontal bar in the doorway or buy one that is not attached to the walls and is installed on the floor.

A physical minute is better than a passive break when you continue to stay at the computer but switch from work to entertainment content, for example playing games or surfing memes.

If physical activity is really not desired, the free minute can be spent on the contemplation of nature. Many studies have confirmed what is intuitively clear: staying in nature improves health, focus, and concentration. But how do you get to nature in the middle of a workday, and in the middle of a big city?

A study published in the scientific journal Environmental Psychology found that people simply looking at nature pictures for 40 seconds improved focus and reduced stress levels. They didn’t even have to go out. Of course, being in nature is better, but a good photo will do for a fish out of the water. Set yourself a favourite view as your desktop wallpaper – and set a timer for 40-60 seconds when you need to relax.

Take Short Breaks Every Hour

Pomodoro is a well-known and simple method to increase productivity. Everything is simple: you set a timer for some time, work without distraction, focusing on your task, then take a break for 5-10 minutes, then start the timer again. And after several approaches, you take a longer break or have lunch.

The most important thing in this technique is complete concentration on your work and a mandatory rest after each session, when you completely distract yourself, take a walk, breathe fresh air, drink coffee, etc.

Rest is necessary, even if you do not want to rest yet. Don’t get to the point where you have no energy left – it’s better to replenish them regularly. Technical equipment for Pomodoro is almost not required: a simple timer in your phone or watch will do.

If you really want to, you can download one of the many mobile apps that will give you more options besides the timer, like the ability to see your stats.

There are also add-ons for popular browsers, and if you tend to be distracted by social networks, they can be useful: in them, you can set up a list of banned sites, which will disabled during concentrated work. And it will be impossible to turn it off!

And during the break, you can read social networks and other sites that interfere with your work. But it’s better not to spend the entire break in the browser – take a walk, stretch out, change positions.

Big Breaks

During the workday, plan long breaks as well. At the very least, take a lunch break to talk to your colleagues about non-work topics, meet with friends, read a book, or simply be alone with your thoughts. If possible, have an afternoon nap as well. NASA research on the effects of daytime sleep on pilot performance has shown that 26 minutes of sleep increases performance by 34 percent.

The exact numbers sound convincing, but that’s not the point. It does work – and has been tested by so many people.

Even 10 to 12 minutes of sleep makes two days of work. And without them, the second half of the normal workday becomes not very productive – after lunch, around two o’clock, activity decreases, it makes you sleepy.

But after a short nap, a new workday begins.

Yes, the first fifteen minutes after awakening you will feel a little sleepy. Coffee helps will help in such cases. Some people drink coffee before a daytime nap, set the alarm for 15-20 minutes, and wake up just when the caffeine enters the bloodstream. This is aerobatics, but it’s worth a try – scientists have proven that the so-called coffee nap invigorates better than coffee or daytime sleep alone.

Combine work and rest, and may your energy never run out!