In October 2024, Andrew Bigart published an article in The Review of Banking & Financial Services, “FBO Accounts: Maximizing Benefits While Minimizing Risks in Fintech Partnerships.” Below is an excerpt:
Innovation in the banking and fintech industry has been supported in many cases through “FBO” or “for the benefit of” accounts that are set up by banks and their fintech partners to move funds for customers. These accounts are popular with fintechs because of the potential to help them minimize money transmission licensing risk. Despite the popularity of the FBO account model, there are numerous legal and regulatory risks that banks and their fintech partners need to take into consideration. These risks and their management are discussed in this article.