Research Outline

FinTech in the Banking Industry


Provide an overview of the FinTech in the banking industry. Include details specifically on Know Your Customer (KYC) technology, anti-money laundering systems, market value, technology/system trends, future insights, etc. This information will be used to produce data points for a grant application.

Early Findings

Know Your Customer (KYC) Technology

  • FinTech companies with more than 50 employees have KYC teams made up of 7-10 employees. For those with less than 50 companies, KYC teams are typically made up of either 1-3 or 4-6 employees.
  • Approximately 30% of FinTech companies have KYC teams made up of 1-3 employees, 30% have KYC teams with 4-6 employees, and 40% have between 7-10 employees on their KYC operations teams.
  • Growth in the KYC team division for FinTech companies is largely driven by:
    • Number of existing customers: 60%
    • Number of new customers: 80%
    • Percentage of customers that have to be manually reviewed: 50%
    • Number of geographies that the company operates within: 10%
    • Number of regulatory jurisdictions the company operates within: 10%
    • Company direction/products offered: 10%
  • The most commonly sought after features for KYC technology in the FinTech industry include:
    • Integrated third party vendor solutions: 90%
    • Integrated sanctions/PEP screening: 80%
    • Reports for auditors: 80%
    • Open API for workflow management: 70%
    • Integrated risk and fraud: 70%

Anti-Money Laundering (AML) FinTech Software in Banking

  • One of the major issues with AML technology in banking is the reporting threshold of $10,000. This value makes it difficult to identify illegal profits, sometimes resulting in false alerts.
  • Blockchain technology is suspected to be a possible solution to confirming, tracing, and verifying payments in the banking industry. This goes hand-in-hand with machine learning FinTech, which would help AML software to learn and predict possible instances of fraud.
  • AML and KYC technology are expected to grow together to ensure that banks are not accepting customers that would be more likely to commit money-laundering or fraudulent bank activities.

FinTech in the Banking Industry

  • Banks report that some of the largest threats from FinTech include but are not limited to:
    • Loss of market share: ~68%
    • Pressure on margins: ~67%
    • Information security/privacy threat: ~57%
    • Increase of customer churn: ~50%
    • Other: ~4%
  • FinTech is largely expected by experts to improve the "back-end of financial services" in the banking industry, specifically by validating customers, products, and feedback.