Banks collaborating with fintech firms must control for the risks associated with the associated new products, services, and third-party relationships.
When incorporating innovation that is consistent with a bank’s goals and risk tolerance, bankers will need to consider which model of engagement is most appropriate in light of their business model and risk-management infrastructure, manage any outsourced relationships consistent with supervisory expectations,10 ensure that regulatory compliance considerations are included in the development of new products and services, and have strong fallback plans in place to limit the risks associated with products and partners that may not survive.