Friday, October 4

The Evolution of Compliance in Banking and Fintech: A Reflection, 2024

In the dynamic landscape of financial services, compliance has emerged as a cornerstone, ensuring the integrity and stability of banking and fintech operations. The journey, however, has been fraught with lessons, some learned at a high cost. A striking example from 2006 highlights the gravity of compliance: a bank dismissed its entire current account team for opening over 700 accounts using the same template—a practice that was replicated across various banks over the years.

As banks embarked on partnerships with fintech companies, the focus on regulatory compliance seemed to wane, overshadowed by business interests. The fintech sector’s vibrancy and innovation made traditional banking institutions appear outdated in comparison.

From Template Troubles to Tech Triumphs: The Banking Compliance Journey

A recent breakfast roundtable with over 20 senior bankers shed light on several insights:

  1. Innovation at a Crossroads: Traditional capital providers are often hesitant to back the young and restless innovators. This cautious approach has led to a decline in support for new working methods and products, with many young founders facing rejection.
  2. The Quest for Real Innovation: The industry needs to address more challenging issues, such as transforming insurance into a sought-after product and extending digital payment systems beyond the smartphone-savvy population.
  3. The Phoenix Moment: Financial services are at a juncture where the only way forward is up. Despite this optimism, the sector may continue to face challenges in the near term, with potential relief during the election period from April to June.
  4. Embracing Tech-Fin and DSA: Banks and financial institutions have found value in tech partnerships that enhance customer service, engagement, and technological advancement, all while reducing costs.
  5. The Competitive Edge: From 2019 to 2023, there was intense competition among banks to partner with fintech companies. Compliance departments that rejected certain startups only to see them succeed with competitors led to aggressive partnership strategies, sometimes at the expense of compliance and risk management.
  6. Capital Saturation: The period from late 2019 to early 2022 saw an excessive flow of capital chasing limited opportunities, highlighting the need for a more balanced approach to investment.

The dialogue concluded on a positive note, emphasizing that those who start their ventures now will have a clearer understanding of the market. This sentiment echoes Jensen Huang’s perspective that true greatness stems from character, which is forged through adversity and suffering.

For fintech startups looking to raise capital, the Mumbai Startup dialogue offers a platform for engagement and networking. It’s an opportunity to connect with like-minded individuals and potential investors, paving the way for innovation and growth in the fintech ecosystem.


This article reflects on the importance of compliance in the banking and fintech sectors, drawing on historical lessons and recent discussions among industry leaders. It underscores the need for a balanced approach to innovation, investment, and regulatory adherence to foster a resilient and forward-looking financial landscape.

This article is based on insights shared by Abhishant Pant in a LinkedIn post. For the full context and detailed discussion, please refer to his original post

Also Read:RBI Organizes Annual Conference of the RBI Ombudsmen


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