Fintechs in Latin America are facing new regulatory and geopolitical challenges that demand advanced technology and more dynamic processes to comply with international sanctions, according to a report by Lynx Tech and FINTRAIL.
International sanctions have evolved from being secondary diplomatic tools to becoming key instruments of foreign policy. This shift compels the financial sector—and fintechs in particular—to adopt a more agile, preventative, and technologically advanced stance toward regulatory compliance and geopolitics.
Lynx Tech explains why fintechs in the region must be prepared and equipped with smart technology to face emerging compliance risks.
The rapid growth of fintechs in Latin America has improved access to financial services, especially among excluded populations. However, this expansion requires more robust compliance systems. According to the report “Keeping pace with geopolitics and sanctions” by Lynx and FINTRAIL, traditional monitoring methods are no longer sufficient to manage risks associated with geopolitical shifts or sanctioned jurisdictions. The report proposes replacing reactive oversight with a proactive approach that incorporates intelligence, dynamic risk analysis, and real-time monitoring.
According to Alyssa Iyer, Product Director for Anti-Money Laundering (AML) at Lynx Tech, “Today, it is not enough to perform a sanctions check at the beginning of the customer relationship. Fintechs must maintain dynamic, efficient, and scalable controls—regardless of how many new designations are added or modified each week. This capability is what enables them to build trust with banking partners, protect operations, and, most importantly, continue to grow in an increasingly uncertain global environment.”
Venezuela’s case illustrates how geopolitical changes directly impact regulatory compliance. Between 2023 and 2024, the relationship between the United States and Venezuela fluctuated between temporary relief measures and renewed sanctions, depending on the regime’s behavior. This volatile environment has forced financial institutions to adapt quickly. In 2025, coordinated sanctions by the U.S., European Union, Canada, and the United Kingdom against high-ranking Venezuelan officials marked a turning point for companies with operational or commercial ties to the country.
In this context, Latin American fintechs can strengthen their responsiveness without sacrificing agility by adopting best practices such as:
- Investing in scalable technology solutions capable of managing constantly evolving multi-jurisdictional sanctions lists.
● Integrating automated, real-time monitoring systems to detect exposures early.
● Applying a risk-based approach that considers business relationships, jurisdictions, and the nature of services offered.
● Educating internal teams on new regulations and potential geopolitical implications.
● Ensuring traceability and auditability of compliance decisions, especially in sensitive or complex cases.
● Continuously evaluating technology vendors and their capacity to adapt to changing conditions.
Today, compliance is no longer a mere operational burden—it is a competitive advantage. In a scenario where sanctions shift unpredictably, the fintechs that can anticipate, adapt, and respond precisely will define the path of financial growth in Latin America.
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Source: Forbes Central America
