What is Fintech Compliance and Regulation? From A Builder's Perspective

As someone who has spent over 25 years in financial markets and 20 years in financial services, working everywhere from JP Morgan and Barclays to Deutsche Bank and Standard Chartered, I can tell you that fintech compliance and regulation has evolved far beyond textbook definitions. After founding multiple fintech companies and spending three years building compliant generative AI from the ground up, I’ve learned that compliance isn’t just about following rules—it’s about earning trust from the biggest banks in the world.

My First Thought: Data Governance Above All

When I first started building generative AI for financial institutions, the first thing I thought of was data governance. This wasn’t theoretical—it was practical survival. No bank will use AI technology unless they control it completely.

This realization shaped everything we built at Scalata.ai over the past three years.

Data governance became our north star because it addresses the fundamental concerns that keep financial institutions awake at night.

Banks need to know:

• exactly where their data lives,

• how it flows through AI systems,

• who has access to it, and

• how it’s being used to generate insights or decisions.

During the pandemic, when I made the bold decision to move to New York with just $50k and zero connections, I knew I needed to build something different, something that would address the fundamental trust gap between innovative AI technology and conservative financial institutions.

The data governance architecture we developed ensures complete data sovereignty for our banking clients

This means institutions:

• maintain full control over data access permissions,

• can audit every interaction with their data, and

• have transparent visibility into how AI models process their information.

The Reality Check: Beyond Simple Rule-Following

If you search for compliance definitions, you’ll find answers like “when dealing with Generative AI Fintech compliance and regulation means having more stringent controls and following rules that help fintech companies work safely and legally”. But after my experience building TaXchange (now Italy’s highest revenue-performing fintech) and then Scalata.ai, I can tell you that building compliance is about earning trust.

This is precisely why winning the Digital Banker Award for ‘Best Gen-AI Financial Markets Solution by a Vendor’ at The Global BankTech Awards 2025 was so valuable.

It wasn’t just recognition—it was validation that our razor-sharp focus on compliance and trust-building was strategically sound. Banks needed to see that our product should be trusted, and this award provided that external verification.

The SOC 2 Type II Milestone: Security as a Core Value

Achieving SOC 2 Type II Compliance in 2024 represents more than checking a regulatory box. Security has always been a fundamental value at Scalata.ai, and this certification demonstrates that:

• Our infrastructure meets the highest standards for security, availability, and confidentiality

• We maintain independently verified controls, ensuring sustained trust and reliability in data-sensitive environments

Having worked at institutions like JP Morgan, Barclays, and Deutsche Bank, I knew that compliance certifications are table stakes for enterprise adoption.

When I was developing our platform, I insisted we build this from the ground up with compliance at the core, not as an afterthought.

The Builder’s Reality: Compliance That Banks Actually Trust

What I learned from them is that banks don’t want generic solutions. They want compliance frameworks they can verify and trust. This means:

Complete Data Control:

Banks need ironclad assurance that their data remains under their control at all times. Our architecture ensures institutions maintain full sovereignty over data access, usage, and storage.

Transparent AI Operations:

Financial institutions require visibility into how AI models process their data and make decisions. Without this transparency, even the most powerful AI becomes a regulatory liability.

Independently Verified Security:

Certifications like SOC 2 Type II provide the third-party validation that banks require before trusting new technology with their most sensitive information.

The Trust Architecture That Enables Innovation

Robust compliance doesn’t constrain innovation—it enables it. We set out to create generative AI where institutions can feel safe, which is why security, regulations, and compliance are at our core.

When you build with compliance as the foundation, you create trust architecture that allows banks to confidently adopt transformative technology.

The true test of AI for finance is that it can be global, capable of meeting regulatory standards in New York, London, Frankfurt, Tokyo, and beyond simultaneously.

As someone who has navigated earning trust from the world’s largest financial institutions, I believe fintech compliance is ultimately about building infrastructure that bridges the gap between innovative technology and institutional requirements.

It’s about creating the trust framework that enables the future of financial technology across every major financial center.