NEW YORK—An economic downturn is expected to drive a rise in financial crime, according to a new survey of fintechs that finds the tech upstarts are staffing up their financial crime prevention teams.
The study also predicts fintechs, know for their quick and easy funding programs, may make it harder for consumers to get loans, Crowdfund Insider reported.
A new survey by ComplyAdvantage, a financial crime and fraud risk detection firm, shows 100% of fintechs are “re-evaluating their approach to risk.”
This will likely lead to “de-risking” or restricting client and business relationships “to minimize the likelihood of onboarding criminals.” While the approach appears effective, “it may also make it harder for legitimate consumers and businesses to access financial products like loans,” the report states.
Actions Being Taken
In addition to the near-universal plans among fintech compliance professionals to re-evaluate their approach to financial risk, the survey shows that:
- Nearly two thirds (65%) expect a rise in financial crime, and 56% are hiring more compliance staff
- The war in Ukraine has transformed the compliance universe, with 59% of fintechs changing their business model
- 90% of fintechs and digital banks said they’d seen an increase in the use of decentralized finance platforms – such as crowdfunding – to fund extremist political groups
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