Which of the following statements is true about financial crimes in fintech?

• A. Terrorist financing, money laundering, and fraud are core concerns
• B. Only narcotics-related crimes are monitored
• C. Financial crimes are not a concern in fintech
• D. KYC and due diligence are optional in fintech

Answer: (A)

Fintech risk management focuses on multiple financial crime risks, not just one issue. Terrorist financing, money laundering, and fraud are all central concerns because digital platforms can be exploited to move illicit funds, hide their origins, or steal value through deception. To counter these threats, firms implement strong customer verification and ongoing due diligence (KYC), monitor transactions for unusual or suspicious activity, screen against sanctions lists, and file required reports. This protective framework reflects how regulators expect fintechs to operate in a risk-based way, continuously assessing and mitigating AML and fraud risks as the business and user patterns evolve.

The other statements don’t fit because restricting monitoring to narcotics-related crimes misses the broad spectrum of risks fintechs face; claiming financial crimes aren’t a concern contradicts the regulatory focus on AML/CFT and fraud prevention; and labeling KYC and due diligence as optional undermines the essential controls used to know customers and assess risk.