FBO Accounts: Maximizing Benefits While Minimizing Risks in Fintech Partnerships (Volume 40, Number 10–October 2024)
Author: Andrew E. Bigart.; Max Bonici.
Source: Volume 40, Number 10, October 2024 , pp.97-105(9)
Abstract:
Innovation in the banking and fintech industry has been supported in many cases through “FBO” or “for the benefit of” accounts that are set up by banks and their fintech partners to move funds for customers. These accounts are popular with fintechs because of the potential to help them minimize money transmission licensing risk. Despite the popularity of the FBO account model, there are numerous legal and regulatory risks that banks and their fintech partners need to take into consideration. These risks and their management are discussed in this article.Keywords: : Bank–Fintech Partnerships; Payments-Related Services; AML and Counterrorist Financing; Third-Party Risk Management; Safety and Soundness; Account Ledgering, FDIC Deposit Insurance; Consumer Financial Protection
Affiliations:
1: Venable LLP; 2: Venable LLP.