The Coalition for Financial Ecosystem Standards (CFES) has unveiled the STARC framework, a set of 54 standards aimed at enhancing risk management and compliance in bank-fintech partnerships. This initiative marks a significant step towards establishing industry benchmarks that address key areas such as BSA/AML, compliance management systems, third-party risk management, operational risk, complaint handling, and marketing and product compliance.
Sima Gandhi, Co-Founder of CFES, stated that the comprehensive standards are designed to "facilitate innovation within an approach that respects safety, soundness, and consumer protections." The framework translates existing regulatory guidance into clear criteria for organizations to benchmark their practices.
The formation of an Advisory Board accompanies the launch. It includes members from the Independent Community Bankers of America (ICBA), American Fintech Council (AFC), and SaverLife. The board will guide the development and implementation of these standards while ensuring they reflect consumer protections and banking perspectives.
Rebeca Romero Rainey from ICBA emphasized the need for clear standards to support community banks in their partnerships with fintechs. She noted that joining CFES's Advisory Board allows them to ensure these standards meet practical needs while maintaining robust risk management.
Phil Goldfeder, CEO at AFC, highlighted the importance of regulatory clarity for fintech companies and innovative banks. He expressed excitement about partnering with CFES on STARC's development to provide a reliable framework for responsible innovation.
Leigh Phillips from SaverLife pointed out that strong consumer protections must be foundational as financial services evolve through bank-fintech partnerships. She noted that STARC's requirements create a framework beneficial for both consumers and providers.
Bryan Mulcahey, co-founder of CFES, mentioned that the standards were developed through consultations with various stakeholders including banks, fintechs, regulators, and consumer advocates. He described this initial set as just the beginning of CFES’s mission to enhance collaboration across the financial services community.
For further details on the certification process or to view the standards, interested parties can visit CFES's website.