United States' Need For a Single Fintech Regulator To Minimize Use by Criminal Enterprises While Maintaining Innovation to Assist the Unbanked

摘要

In the aftermath of the 2008 global financial crisis, a wave of new regulations was imposed on traditional financial institutions. These changes in the regulatory framework set the stage for a new era of financial technologies (fintechs) to emerge and provide services that traditional financial institutions have historically offered. The fintech evolution has allowed individuals who have had no access to financial services be included in the domestic and global economy. As with every new financial innovation, criminal enterprises have found ways to take advantage of the technology to assist in their illicit activities. Fintechs provide new ways to launder their ill-gotten gains and obfuscate their identity. Some governments have taken steps to work with fintechs to determine the appropriate application of current regulations and the governance of fintechs. The United States has made some progress with the Consumer Financial Protection Bureau's Project Catalyst program and the Office of the Comptroller of Currency's Office of Innovations. These innovation hubs were created as a way to assist fintechs with regulations while gaining information about fintechs. A central agency for fintechs may be a better solution and could be used to facilitate further research on the risk fintechs pose as a vehicle for the movement of illicit funds and/or become involved with a cross-jurisdiction assessment of fintech regulatory approaches and their effectiveness. This paper aims to gain an understanding of the benefits and risks fintechs bring to the financial sector, look at potential mitigation strategies, and determine the best approach for the United States to regulate fintechs. Keywords: Financial Crime and Compliance Management, Dr. Kyungseok Choo, underbanked, regulatory sandbox.