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FinCEN Invites FinTech and RegTech Firms to Present Innovations

Christian.Larson@cwt.com's picture
Commentary by Christian Larson

The Financial Crimes Enforcement Network ("FinCEN") encouraged FinTech and RegTech companies and financial institutions to present their innovative products and services. FinCEN's new Innovation Hours program is intended to "better shape and inform [the agency's] ongoing engagement with Anti-Money Laundering (AML)/Countering the Financing of Terrorism (CFT) innovators." FinCEN said it will accept meetings once per month, and that primary consideration will be given to entities that are operational.

Commentary

The focus on entities that are operational suggests that FinCEN is interested not in concepts, but in tools that actually improve outcomes in anti-money laundering compliance. FinCEN currently takes the position that it will not penalize a bank that does not pursue innovative approaches, so long as the bank maintains an effective anti-money laundering program. But if a FinTech vendor were to convince FinCEN that a particular technology is both less expensive and more effective than any other available process, FinCEN could come under pressure to change its position.

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