Bank + Fintech Arrangements TechSprint

The TechSprint

The Alliance for Innovative Regulation (AIR) is hosting an in-person TechSprint February 24-27, 2025 in the Washington, D.C. area to explore regulatory issues relating to the evolving business models of community banks, with a focus on relationship models between banks and fintech firms.

The goal of the Bank + Fintech Arrangements TechSprint is to bring together regulators, banks and fintechs, and others to collaborate on technology solutions and/or innovative policy frameworks designed to foster successful third-party arrangements while mitigating consumer risk.

Apply to Participate

The Challenge

With the rapidly evolving financial technology landscape, banks and fintechs are facing many new challenges, especially when it comes to risk management and regulatory expectations. Community banks in particular face daunting headwinds driven by new technology. Challenges include aging legacy technology, intense competition from large banks and others, changing customer expectations, and limited resources, combined with shrinking opportunities and rising risks in traditional market segments. In response, many small banks are developing new business models, including partnership arrangements with fintech firms.

However, as banks’ third party relationships evolve into new territory, they increasingly generate regulatory concerns. The industry has experienced an upsurge in enforcement activity and tightening scrutiny, within an environment of regulatory uncertainty.

Problem Statements

TechSprint teams will focus on exploring and developing solutions for a defined set of problem statements. The numbering does not indicate any order of preference or priority.

1. Regulatory Data

How might we leverage technology to increase the availability of consistent data (quantitative and qualitative) about bank-fintech arrangements so that regulators can more efficiently and effectively gather information to inform their supervisory and policy-making activities?

2. Bank/Fintech Technology Integration and Data Sharing

How might technology enable banks and fintechs to better integrate their systems and share data to support operational demands and risk management objectives, such as processing high volumes of data in real-time, effectively monitoring transactions, and assisting with ledger management/reconciliation?

3. Effective Partner Selection and Due Diligence Processes

How might technology improve vendor/partner selection, due diligence, risk-monitoring, and related compliance operations for both banks (especially smaller banks) and fintechs, given the need for rigor, efficiency, and flexibility to address a diverse array of arrangement types with vendors and partners?

4. Future of Banking and Regulation

Given today’s rapidly evolving financial services landscape and the diversity of bank-fintech arrangements, products, and services, how might today’s regulatory framework be re-envisioned to address rising consumer demand for nontraditional financial services while assuring safety, soundness, consumer protection, and fair competition?

• In such a re-envisioned regulatory framework, what might be the specific roles of federal and
state-level regulation/supervision and the potential adoption of self-regulatory mechanisms?

• What roles might technology play in this re-envisioned framework?

Participants and Roles

AIR seeks applications to participate from a diverse range of stakeholders within the financial ecosystem including: community banks, partner banks, financial institutions, fintechs, middleware providers, policy makers, regulators, consumer advocates, nonprofits, academics and consultants.

TechSprint Roles

Back End Developer	You work with APIs, you know data well and are prepared to manipulate it for good. You bring stuff together to make it all work seamlessly.
Communicator	You know how to pitch anything to anyone. You spin product descriptions to be bold, captivating solutions. You may also give updates to TechSprint Observers.
Designer	You are a visionary, the big ideas person. You know the right design to make the moving parts fit together seamlessly.
Domain Expert	You have in-depth knowledge about products, services, laws, and policies related to bank and fintech arrangements.
Front End Developer	You make buttons do stuff. You make screens transition. You take the designs and make them function, making sure the user flow works effectively.
Team Leader	You will be responsible for organizing your teammates and managing the team’s timeline and deliverables, and act as the point person for TechSprint organizers.