Fintech Meetup 2026: Navigating the Compliance Frameworks of High-Risk Banking

By John San Filippo

At Fintech Meetup in March, Finopotamus met with industry experts working in regulatory compliance and risk management to discuss the evolving landscape of high-risk industry banking and the growing role of fractional support in financial technology. Interviewees included Cristina Hall, Regulatory Compliance Manager at Boston, Mass.-based Wolf & Company, and Kevin Hart, founder and CEO of Bonita Springs, Fla.-based Green Check Verified. Presented herein are expert insights from these sessions.

The Strategic Value of Fractional Compliance

As financial institutions (FIs) explore new product offerings like stablecoins and lending-as-a-service, the need for specialized subject matter expertise has become more acute, said Hall. She explained that fractional compliance support allows institutions to access this expertise without the significant overhead costs of a full-time hire.

Cristina Hall

“Sometimes what makes more sense for fractional compliance is that we come in in the very, very early days and we help build the framework,” Hall said. She noted that her firm provides strategic consulting on different areas of compliance that need to be implemented for new service offerings. This approach, she noted, is particularly helpful for banks and credit unions that may not have internal staff with the background to establish checks and balances for emerging technologies.

Hall also emphasized the critical importance of maintaining thorough records. “Documentation is really big in compliance in the FI space,” she stated. She warned that failing to document software changes or decision-making processes can become a consultant’s nightmare when examiners arrive and staff cannot recall why specific changes were made months earlier.

Efficiency Through Artificial Intelligence

The conversation also touched on how artificial intelligence (AI) is being integrated into the compliance workflow. Hall observed that AI is currently being used both internally at her firm to streamline workflows and externally through various banking systems. In the realm of the Bank Secrecy Act (BSA), she noted that some systems are significantly reducing the time required for investigations.

“There’s some systems that are able to cut a BSA officer’s job, the time they would spend on an investigation or preparing a SAR (suspicious activity report), almost in half,” Hall said. She explained that these tools can summarize investigations and make recommendations for SARs. However, she cautioned that institutions must understand how these systems work, including whether they utilize open or closed AI and what data is being shared.

The Myth of Cannabis Banking Legality

Hart addressed the long-standing confusion regarding the legality of banking the cannabis industry. He argued that the biggest picture for financial institutions is finding a complete, sustainable solution rather than focusing narrowly on payments. Hart also addressed the common perception that federal law prohibits these relationships entirely.

Kevin Hart

“While cannabis is federally illegal, banking cannabis is not federally illegal,” Hart said. He clarified that it is not codified anywhere that a financial institution cannot bank the industry. Instead, he explained that the 10th Amendment allows states to set their own guidelines for these businesses. For a credit union, Hart said the challenge lies in ensuring that policies and procedures match the specific requirements of the state, license type, and program type in which they operate.

Managing the Complex Supply Chain

According to Hart, successful cannabis banking requires looking beyond the dispensary to the entire supply chain. He explained that there are six or seven other licensed links in the supply chain  behind a dispensary, including cultivators, testers, and manufacturers. By using a specialized platform, a credit union can bank the same dollar multiple times as it moves through these licensed operators.

“You have to be able to show through transaction monitoring that you’re verifying every operational activity around the plant,” Hart stated. This includes verifying that a dispensary’s sales align with their inventory and purchases from licensed suppliers. Hart noted that while early days saw more “black market” product entering dispensaries, the high cost and difficulty of obtaining a license has made most operators very protective of their compliance status.

Depository and Lending Opportunities

The financial incentives for serving high-risk industries, like cannabis, are significant. Hart pointed out that credit unions are often better positioned than large banks to serve these community-based businesses. He noted that Green Check Verified, a provider of cannabis banking solutions and advisory services, currently supports nearly 200 financial institutions that process over $1.7 billion a month in sales deposit volume.

“The credit unions now are also doing loans because you have more visibility to the health, well-being, and financial trajectory of a cannabis business than any other commercial account that you have,” Hart explained. Because the compliance requirements provide a granular view of every dollar, credit unions can more safely offer loans for expansion, equipment, and payroll services, he said. This relationship-first approach, he continued, also serves as a gateway to attracting Gen Z employees of the cannabis industry, who may not otherwise be familiar with the benefits of credit union membership.