In a recent interview with The Exchange Asia, Damien Gough, Head of Asia Pacific at Thredd, highlighted the challenges fintech companies face in staying compliant across APAC’s diverse regulatory landscape. The region’s financial regulations are evolving rapidly, yet unlike the European Economic Area’s (EEA) “Passporting” arrangement, APAC lacks a unified framework. This forces fintechs to adapt to varying financial laws, data privacy regulations, and Know Your Customer (KYC) requirements in each market.
One of the biggest hurdles fintech companies face is compliance with anti-money laundering (AML) and fraud prevention measures. Authorities in markets like Singapore have ramped up enforcement, issuing hefty fines for non-compliance. Cross-border payments also add complexity, as many fintechs still rely on outdated infrastructure while navigating country-specific regulations. Despite the rise of real-time payment systems, the industry continues to grapple with inefficiencies, making compliance a moving target.
“Fintechs need to adopt newer technologies and regulatory tools that ensure compliance while delivering efficient services across jurisdictions,” says Gough. Recognising these challenges, Thredd has developed a suite of compliance and risk tools designed to support fintechs in meeting regulatory requirements efficiently. The platform incorporates fraud and scam transaction monitoring powered by AI, helping businesses detect suspicious activities in real-time while minimising reputational risks. Automation tools further simplify compliance tasks, reducing the need for excessive manual oversight. Additionally, Thredd streamlines dispute and chargeback management, ensuring fintechs remain compliant while operating seamlessly across different jurisdictions.
For fintechs expanding in APAC, flexibility and adaptability are essential. “Partnering with companies like Thredd, which provide next-gen compliance tools, allows fintechs to automate compliance tasks and stay ahead of regulatory changes,” Gough explains. Establishing strong relationships with regulators and industry stakeholders is equally crucial. Thredd’s existing connections with local BIN Sponsors in key APAC markets help fintechs partner with licensed issuers, reducing market entry timelines by over a year in some cases. Cloud-based platforms and modular microservices tailored to local regulations further facilitate market integration, allowing fintechs to scale efficiently.
While regulation can be perceived as a hurdle, it also presents an opportunity. “Regulation can be both a hurdle and an opportunity,” Gough notes. “Fintechs that embrace regulation early on can avoid the pitfalls of global scandals like FTX and Wirecard, where lack of oversight led to significant losses and reputational damage. Compliance-first fintechs position themselves as trustworthy partners, enhancing customer retention and growth.” A strong compliance framework builds trust among customers, regulators, and partners, positioning fintechs for long-term success.
Regulators across APAC are increasingly embracing AI and automation as critical tools for fraud prevention and compliance. Markets like Singapore and Hong Kong recognise AI’s potential to enhance transaction monitoring, a key aspect of AML and KYC compliance. However, authorities also stress the importance of transparency in AI decision-making to prevent bias and ensure accountability. “Regulators in markets like Singapore and Hong Kong view AI as a valuable compliance tool, but they also stress the need for transparency in decision-making to mitigate bias and prevent ‘black-box’ models that are difficult to audit,” says Gough. The rise in financial fraud and scams has led to new regulatory measures, including Singapore’s Shared Responsibility Framework (SRF) and Australia’s Scams Prevention Framework Act 2025, which emphasise real-time monitoring and accountability.
The tightening of regulations in APAC has been influenced by global financial scandals, prompting authorities to strengthen oversight. In response to cases like Wirecard and FTX, regulatory bodies in Singapore and Hong Kong have ramped up AML enforcement and introduced stricter digital asset frameworks to maintain financial stability. “In Singapore, enforcement actions against AML breaches have increased, and regulators in Hong Kong and Singapore are strengthening their frameworks for digital assets to ensure financial stability,” Gough highlights.
Despite growing regulatory pressures, many fintech startups still make the mistake of neglecting compliance early on. Some underestimate the complexity of financial regulations, leading to costly penalties and operational setbacks. “Investing in robust compliance tools and legal expertise early on can help fintechs avoid these pitfalls,” Gough advises. Additionally, failing to update systems in line with evolving regulations can leave fintechs vulnerable to compliance risks. “Working with a trusted payments partner, like Thredd, ensures fintechs stay compliant with the latest standards and requirements.”
Thredd plays a vital role in helping fintechs navigate these challenges by offering fraud monitoring, scam transaction detection, and 3D Secure solutions that simplify compliance across multiple jurisdictions. “Our solutions are integrated with our platform to ensure full compliance across multiple jurisdictions. We also offer scalable, cloud-based services tailored to local regulatory requirements, allowing fintechs to expand efficiently while remaining compliant,” Gough explains.
APAC’s fintech industry has undergone a significant transformation over the past two decades, evolving from expanding banking access to driving innovation in payments, lending, insurance, and wealth management. The future of fintech in the region will revolve around digital assets, blockchain, and AI integration. “The future of fintech in APAC will revolve around digital assets, blockchain, and AI integration. These technologies will facilitate low-cost cross-border payments and real-time settlements as regulatory frameworks mature,” Gough predicts.
For fintechs looking to scale while staying compliant, the key is to integrate regulatory adherence into business operations from day one. “My advice is simple: invest in the right technology and integrate compliance into your business from day one,” Gough emphasises. “Fintechs that establish scalable, compliant systems early on are the ones that succeed. Automated fraud detection, real-time monitoring, and regulatory reporting infrastructure will make regulatory navigation much smoother.”
Embedding compliance into a company’s DNA not only ensures regulatory adherence but also strengthens its position in an increasingly competitive fintech landscape.
