EU AI Act: Innovation Meets Regulation – What’s Next for Fintechs?

This is the final part of our EU AI Act series. If you missed the first two videos, we covered the fundamentals of the AI Act and its enforcement timeline.

Now, Louie Vargas, founder of the Network for Financial Crime Prevention (NFCP), shares his take on how innovation and regulation intersect, what fintechs should expect, and why the EU AI Act is changing the game. Check out the main takeaways below, or download our full report for all the essentials.

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The Challenge: Balancing Innovation with Regulation

Fintechs are in a unique position. Unlike traditional financial institutions, which tend to move cautiously when adopting new technologies, fintechs thrive on agility. They’re often the first to push boundaries, create new frameworks, and challenge legacy systems.

But as regulations like the AI Act take shape, fintechs must balance this innovation with compliance. The big question is: how do you stay ahead while ensuring your AI-driven solutions align with regulatory expectations?

Shifting the Mindset: Regulation as a Starting Point

One of the biggest misconceptions about regulation is seeing it as a final set of rules to follow. But as Louie Vargas, founder of NFCP, points out, it’s actually the starting point.

Regulations like the AI Act provide a foundation—but companies that truly succeed won’t just meet the minimum requirements. They’ll go beyond, integrating compliance into their innovation strategies rather than treating it as a last-minute hurdle.

The Evolution of AI Regulation: A More Level Playing Field

One of the most significant aspects of the AI Act is how it creates common definitions for AI-related risks and practices. Until now, there’s been a lot of ambiguity in discussions around AI in compliance—what qualifies as high-risk? How should AI be evaluated? The AI Act establishes clear terminology, helping businesses and regulators speak the same language.

This means fintechs now have a clearer framework for building AI solutions that align with regulatory expectations from the outset, reducing uncertainty and misinterpretation.

The Reality of Adoption: A Slow but Steady Shift

While AI-driven compliance tools are evolving rapidly in markets like the US and UK, adoption in regions like the Nordics has been slower. Traditional financial institutions, in particular, tend to take a cautious approach, waiting to see what works before fully committing to new technologies.

However, this mindset is gradually shifting. As Louie highlights, financial institutions are recognizing that scaling compliance efforts manually isn’t sustainable. Technology is no longer optional—it’s essential. Fintechs, regtechs, and legacy players are beginning to collaborate rather than compete, finding ways to integrate innovative solutions within regulatory frameworks.

What’s Next for Fintechs?

With the AI Act rolling out over the next few years, fintechs that get ahead of compliance requirements will have a competitive advantage. Instead of seeing regulation as a blocker, the smartest players will use it as a blueprint for responsible AI adoption.

As we close this series, we’ll leave you with one final thought: be brave. Whether you’re building AI-driven compliance tools or managing risk within a financial institution, staying ahead requires both innovation and responsibility.

If you’re unsure about how the EU AI Act fits into your processes, we’d love to talk and help guide you through it. And if you want to dive deeper on your own, don’t forget to download our full report for all the details.