FATF FinTech and RegTech Forum 2017

Publication details




FATF General

FATF Recommendations

Chairman's Summary of the FATF FinTech and RegTech Forum 2017 
San Jose, California, United States
25-26 May 2017

San Jose, 26 May 2017 – The Financial Action Task Force (FATF) held a FinTech and RegTech Forum on 25-26 May 2017 in San Jose, United States, chaired by the , Mr. Juan Manuel Vega-Serrano (Spain).

The meeting, hosted by PayPal at its headquarters, was attended by over 150 representatives from the FinTech and RegTech sectors, financial institutions, and FATF members and observers.


Outreach to the FinTech and RegTech community is one of the FATF’s priorities in 2016-2017, which aims to provide a platform for a constructive dialogue and support innovation in financial services while addressing the regulatory and supervisory challenges posed by emerging technologies. This is the FATF’s 3rd engagement with the private sector on FinTech and RegTech.

FinTech innovation can improve the access and delivery of financial services to customers, businesses, and communities. The financial services paradigm may be reorganised around new platforms, infrastructures, and customer-service provider relationships. The FATF’s perspective is to understand how these developments change the landscape of financial services, and how that in turn affects the vulnerabilities of and threats to the integrity of the financial system in order for those risks to be mitigated or contained.

FinTech and RegTech

The forum discussed the significant trends and developments of FinTech and RegTech, and how the financial services landscape could look like in the near future, including peer-to-peer transfers, crowdfunding, distributed ledger-technology or blockchain-based services, analytical tools, KYC utilities, and digital identity.

Several examples were shared on how countries have approached the regulation of FinTech institutions and activities, for instance through clarifying, modifying, or expanding existing regulatory regimes or by establishing new licencing frameworks. Participants also explored how FinTech and RegTech innovations could have public sector applications and enhance capabilities to monitor risks in the financial system and to investigate money laundering (ML) and terrorist financing (TF).

The meeting discussed how authorities and the private sector were navigating a world where transactions and relationships were increasingly digitised, and shared their experiences in adapting their practices to continue to identify and mitigate the different ML/TF risks brought about by these developments.

Participants explored how technology-based innovations have the potential to be utilised to better fight ML and TF. For example, big data, artificial intelligence, and machine learning could improve the detection of suspicious activities, potential illegal activity and criminal networks. The application of technology to support customer due diligence was discussed in detail, including on the various different models and what that meant for the roles and responsibilities of the user(s) and provider(s).

Guiding Principles (The San Jose Principles)

Participants discussed how the public and the private sectors could move forward to promote further constructive dialogue and engagement on these issues and help strike the right balance between supporting innovation and managing any ML/TF risks that arise in the framework of the following high level, guiding principles:

  1. Fight terrorism financing and money laundering as a common goal. Combatting ML deals a significant blow to the many profit-driven criminal activities, while countering terrorism financing limits the capabilities of terrorist groups to prepare or carry out attacks. As stakeholders, we have a shared interest to prevent the misuse of the financial system from the threats of ML and TF, thereby strengthening financial sector integrity and contributing to safety and security. Only by working together may governments and the private sector effectively achieve these goals.
  2. Encourage public and private sector engagement. Close engagement between governments, the private sector and academia on financial innovations helps to foster a shared understanding of these developments, identify pertinent issues, and facilitates collaboration to address any concerns as they arise.
  3. Pursue positive and responsible innovation. Be on the lookout for innovations that present opportunities to mitigate risks, increase the effectiveness of anti-money laundering and countering the financing of terrorism (AML/CFT) measures, and benefit society in general.
  4. Set clear regulatory expectations and smart regulation which address risks as well as allow for innovation. Better understanding of how existing AML/CFT obligations apply to new technologies, products, services, and new paradigms for the provision of financial services is best achieved by governments and the private sector working together to increase awareness and establish clear guidelines as needed.
  5. Fair and consistent regulation. Aim for a regulatory environment that is commercially neutral, respects the level playing-field and minimises regulatory inconsistency both domestically and internationally.