Facilitated by Carrie Connell and Matthew Hovis, Wipfli
As competition for customers increases and interest rate margins shrink in a rising rate environment, financial institutions may seek to expand beyond their traditional branch network and reach customers online by partnering with fintechs or other third parties that offer a variety of services. Regulators have issued guidance on managing third party risk when products and services are offered through outside businesses; however, more and more financial institutions are facing enforcement actions for not considering the risk in managing these relationships. In addition to consumer compliance risks, these partnerships can present BSA and OFAC risks. We will discuss the various risks that fintech partnerships pose and compliance considerations for managing the relationships.