Supplier and customer compliance for fintech: what to check and what a mistake costs

Fintech companies are built to remove friction. Accounts open in minutes, payments cross borders in seconds, and growth is often measured in customers per day. That same speed is exactly what regulators examine when something goes wrong. In recent years, several of the best known fintechs and digital banks have been fined because their controls did not keep up with their growth.

Why fintech is exposed

Onboarding at scale. Automated onboarding can accept thousands of new users a day. If screening rules are weak, problems multiply just as fast as customers.

Cross-border by design. Payment apps, wallets and marketplaces serve users in many countries, including high-risk ones, and move money between them.

Partners and suppliers. Fintechs depend on banking partners, card issuers, payment processors, KYC vendors and resellers. A partner with sanctions or insolvency problems becomes your problem.

Regulatory status. Payment institutions, e-money institutions and banks are directly supervised for financial crime controls. Regulators expect screening to match the size and risk of the business, not the size of the original startup.

What to check

Sanctions lists (EU, US, UK, UN)

Screen customers, merchants, business partners and suppliers against the OFAC SDN and other OFAC lists, the EU consolidated list, the UK OFSI consolidated list and the UN list. Screen at onboarding and again every time a list changes. Include IP and address data to detect users in comprehensively sanctioned territories, and apply ownership rules to business customers.

Politically exposed persons (PEPs)

Anti-money laundering rules require enhanced due diligence for PEPs, their family members and close associates. A fintech must be able to identify them reliably and apply the right level of review.

Insolvency

Banking partners, processors and corporate customers can fail. Insolvency of a partner can freeze customer funds, and insolvency of a business customer raises credit and fraud risk.

Adverse media and legal proceedings

News about fraud, money laundering or regulatory action against a merchant or partner is often the first sign of trouble. Litigation and enforcement records add context that sanctions lists do not provide.

Beneficial owners

For business accounts and merchants, identify the individuals who own or control the company. Shell companies with opaque ownership are a common route for laundering and sanctions evasion.

Real cases: what a mistake cost

Payoneer: USD 1,400,301.40 (OFAC, 2021)

In July 2021 OFAC announced a settlement with Payoneer Inc., a New York based online money transmitter, for 2,260 apparent violations of multiple sanctions programs. OFAC later amended the notice to correct the figures to USD 1,400,301.40. Payments were processed for parties in Crimea, Iran, Sudan and Syria and for persons on the SDN list. OFAC pointed to weak algorithms that allowed close name matches to pass and to gaps in screening for sanctioned locations.

Source: OFAC recent actions, 23 July 2021

Monzo Bank: GBP 21,091,300 (FCA, 2025)

In July 2025 the UK Financial Conduct Authority fined Monzo Bank Ltd GBP 21,091,300 for failings in its financial crime controls between 2018 and 2020. The FCA found that Monzo onboarded customers on limited and sometimes obviously implausible information, and that it repeatedly breached a requirement not to open accounts for high-risk customers between 2020 and 2022, signing up more than 34,000 of them.

Source: FCA press release, July 2025

Starling Bank: GBP 28,959,426 (FCA, 2024)

In October 2024 the FCA fined Starling Bank Limited GBP 28,959,426 for failings in its financial sanctions screening and financial crime controls. The FCA said Starling's growth outpaced its controls and that its automated sanctions screening had been screening customers against only a fraction of the full consolidated list for years.

Source: FCA press release, 2 October 2024

All three cases share one pattern: the technology was fast, but the compliance checks behind it were incomplete.

Practical checklist

• Screen every customer, merchant, partner and supplier at onboarding.
• Re-screen the full base daily against the latest EU, US, UK and UN lists.
• Confirm that your screening tool uses the complete lists, not a subset.
• Tune fuzzy matching so that close variants of listed names are caught.
• Use address, IP and device data to detect sanctioned locations.
• Identify PEPs, family members and close associates and apply enhanced due diligence.
• Record beneficial owners of every business customer and merchant.
• Monitor insolvency of banking partners, processors and key suppliers.
• Track adverse media and proceedings for merchants and partners.
• Make sure controls scale with growth and are reviewed when volumes jump.

How to automate it

Manual reviews cannot keep pace with a growing customer base. Unicorn Intelligence runs automatic, daily compliance checks on all your customers and suppliers: sanctions, PEPs, insolvency, adverse media and proceedings, and beneficial owners, with alerts delivered straight into your CRM.

The test is free, and new accounts also get 50 $ of credit.

Informative content: decisions and legal obligations remain yours.