The May 2024 brief examines increasing U.S. regulatory scrutiny on Banking-as-a-Service providers, with 13.5% of severe enforcement actions in 2023 targeting banks offering BaaS to fintechs. Early 2024 saw consent orders for Sutton Bank and Piermont Bank over third-party risk management. These actions highlight broader concerns about rapid financial innovation, data security, and consumer protection, with potential implications for open banking. The report stresses the need for financial institutions and fintechs to partner with compliance technology providers to efficiently balance regulatory requirements with ongoing innovation.

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