For decades, compliance has been viewed as a necessary but costly burden — a box to check to avoid penalties, maintain licenses and keep regulators at bay.But 2024 marked a turning point for compliance in the payments and financial services sectors, in part marked by FinTech collapses and tightening oversight. Still, the flip side of the coin was that, by turning regulatory challenges into opportunities, firms can not only strengthen their market positions but also set new standards for innovation and trust.The payments and financial services industry operates under a patchwork of global regulations that grow more intricate each year. In 2024, key drivers include heightened scrutiny from regulators, the rapid expansion of cross-border payments and the proliferation of new technologies such as artificial intelligence (AI) and even blockchain, as well as a backdrop of financial institution and FinTech partnerships and a sprawling third-party landscape. These developments have forced companies to rethink their approach to compliance, moving beyond reactive measures to proactive strategies.By focusing resources on the areas that pose the biggest threats, payments and financial services firms are working to turn compliance into a competitive advantage in 2025.This year showed that compliance has shifted from being a defensive shield to a strategic asset. By embedding compliance into the core of their operations, firms are not just avoiding penalties but helping to build trust, improve efficiency and enhance customer experiences.Read more: Financial Landscape Unprepared for Increasing FinTech Influence, Oversight Group SaysRisk-Based Compliance: Prioritizing What Matters MostAt the heart of the ongoing compliance transformation is the shift to risk-based compliance frameworks. Rather than spreading resources thinly across all areas, firms are now increasingly turning to advanced analytics and data-driven insights to focus on the highest-risk activities and relationships.Real-time data analysis helps pinpoint areas that pose the greatest regulatory and reputational risks, while automating low-risk compliance tasks frees up teams to concentrate on strategic initiatives. By prioritizing high-risk areas, firms can optimize their compliance budgets and personnel.Another key factor driving compliance as a growth engine is the integration of compliance processes across the organization. In the past, compliance functions often operated in silos, disconnected from other departments such as finance, operations and IT. This fragmented approach led to inefficiencies, duplication of effort and missed opportunities.Throughout 2024, firms worked to break down these silos by integrating compliance into their enterprise-wide strategies. This holistic approach helped ensure that compliance considerations were embedded into every decision, from product development to market expansion.As PYMNTS has reported, regulators are increasingly turning their attention to the do
Dom. Dic 29th, 2024
