2022_Fintech M&A Insights

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25 The Changing FinTech Landscape: A Snapshot of M&A Themes and Trends In addition, federal regulation of banking activities is spread across several bank regulatory agencies whose interests in bringing certain bank-FinTech partnerships under their regulatory umbrellas may compete with those of prominent state bank regulatory agencies, such as those in California, New York, and Utah. Recent litigation between state and federal regulatory agencies, in addition to rules promulgated by federal regulatory agencies in an effort to both clarify regulatory uncertainty for the industry and prevent so-called "rent-a-charter" schemes in which FinTech companies circumvent (intentionally or not) certain state or federal licensing requirements, present an ongoing challenge to banks and FinTech companies seeking to offer innovative products and services across U.S. state borders. Banks entering into partnerships with FinTech companies must stay up to date with developments in this space and ensure that their relationships do not run afoul of both existing and still percolating regulatory requirements. Insert pull-quote With increased innovation in FinTech also comes more sophisticated bad actors who attempt to illegally access data, defraud customers and companies, and launder money.

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