The sheer diversity in the functions performed by fintech firms, necessitates a widening of the regulatory perimeter. The approach to regulation also needs to adapt to the type of entity being regulated. While similar activities should attract uniform regulation in most cases, such activity based regulation might be less effective than entity-based regulation when one is dealing with financial activities by bigtech firms.
Indeed, the Financial Action Task Force (FATF) has laid a lot of emphasis on the implementation of a risk-based approach (RBA) to AML/CFT by all countries and jurisdictions in its International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation issued in February 2012. The foundation stone to an effective risk-based approach to AML/CFT is an enabling legal framework.