Five Big Differences Between UK/EU and US Financial Regulation That Every FinTech Should Understand

How AnyAccount Helps

At AnyAccount, our US team supports FinTech founders, MSBs and scaling payment companies with:

• State and federal regulatory licensing strategy, including MSB and money-transmitter frameworks

• Bank sponsorship readiness and partner-bank compliance alignment

• Technology market launches, including payments infrastructure and AML/KYC controls

• End-to-end MSB governance frameworks with operational playbooks and audit trails

• Examination preparation across FinCEN, state regulators and sponsor-bank reviews

If you want to avoid learning about regulatory gaps during a state audit — or discovering a sponsor bank’s risk committee does not love your controls as much as you do — speak to us. We help firms build US-ready governance from day one.

The UK/EU and US say many of the same things about financial regulation: protect consumers, prevent financial crime, maintain stability, support innovation. But anyone who has operated on both sides of the Atlantic knows that the style of regulation could scarcely be more different.

For founders, compliance officers and investors considering cross-border expansion, understanding these differences is not optional. These are the foundations that determine how quickly you can launch, how much compliance will cost and what regulators expect of you.

Here are the five differences that matter most.

1. Rules-Based vs. Enforcement-Driven

The UK and EU publish detailed rulebooks. The FCA, PRA and ESMA say exactly what they expect, define terms, and provide extensive guidance. The outcome is operational certainty.

The US, by contrast, relies heavily on enforcement to set boundaries. Guidance may be high-level, ambiguous or out-of-date, but enforcement actions explain “what they meant all along”. Firms operate with more legal interpretation, more dependency on counsel and far more regulatory risk.

This makes the US dynamic, flexible and fast-moving — but also harder to navigate without seasoned on-the-ground expertise.

2. Centralised vs. Fragmented Authority

The UK and EU have consolidated regulatory frameworks. One regulator (FCA), one handbook, one authorisation process. ESMA sets the pan-EU tone. It’s not simple, but it’s unified.

The US is the opposite. Regulation exists at:

• the federal level

• the state level

• and, if you use a bank partner, the “sponsor bank compliance layer”

A money transmitter might have 53 separate licences, each with its own regulator, reporting schedule and exam cycle. Add FinCEN on top, and the US regulatory map looks more like a railway junction.

This fragmentation is a feature, not a bug — but it means expansion must be highly structured.

3. Principles-Based Oversight vs. Contract-Based Oversight

UK/EU regulators expect firms to self-govern within broad principles such as “treat customers fairly”, “act with integrity”, or “ensure operational resilience”. If a firm breaches these principles, regulators act.

In the US, supervision of FinTechs often happens through bank sponsorship agreements and contractual obligations rather than direct regulatory permissions. Sponsor banks audit the firm, impose controls, set policies and may approve every product change.

A UK firm used to FCA supervision can feel surprised when the toughest regulator in America turns out to be… its own banking partner.

4. Licensing Philosophy: Permission First vs. Permission Eventually

In the UK/EU, authorisation is a rite of passage. You secure a licence, then operate.

In the US, the pathway is more flexible. Many FinTechs launch using:

• partner-bank programmes

• sponsor-bank BINs

• agent models

• state sandboxes

• exemptions

Licensing may come later, once scale demands it. The result is a market where speed is achievable — but where weak controls often attract enforcement actions from state regulators or the CFPB.

5. AML Expectations: Systems-Heavy vs. Accountability-Heavy

The UK/EU AML frameworks lean heavily on systemised controls, auditability and documented processes. A firm must have a defined MLRO, risk assessments, documented procedures and evidence-ready governance.

The US focuses far more intensely on individual accountability. Regulators want to know who signed off on what, whether the programme is genuinely risk-based and whether staffing is proportionate. Training, escalation and person-level oversight matter as much as the technology stack.

Firms often assume sophisticated tools can solve AML issues. US regulators tend to ask whether management actually knew how the tools worked.

So Which System Is Easier?

Neither. They are simply built on different philosophies.

• The UK/EU offer clarity, predictability and structure, at the cost of slower authorisation and more procedural compliance.

• The US offers flexibility and speed, at the cost of fragmentation, higher legal exposure and heavy reliance on sponsor-bank governance.

The smartest firms tailor their operating model to the jurisdiction they are entering — not the one they came from.