Fintech: Internet Banking Across State Borders Triggers Compliance Challenges For State Banks

Banks of all sizes have been using Internet delivery systems since the 1990s to interact with customers in the marketing and delivery of banking products and services.

However, with the current explosion in financial technology – or "fintech" – regional and community banks are now often presented with opportunities to use fintech online delivery systems to market their banking products and services to customers outside the banks' geographic branch footprints.

For example, a community bank may use such Internet systems to target employees or patrons of an organization based in the bank's home area, even though those employees or patrons may reside in other states. 

This ability to reach customers outside a bank's physical branch network area raises the question: What compliance hurdles does a bank face when it markets products and services to customers in states in which the bank has no branches?