Why Cross-Border Open Banking Needs Embedded Compliance 

Open banking began as a connectivity story. APIs can unlock financial data, third-party providers can build on top of it, and competition can drive better products for consumers and businesses alike.

But as financial institutions expand open banking connections across borders, the complexity they encounter is often not technical, but regulatory. 

The organisations best positioned to scale are those treating their cross-border compliance needs not as an afterthought, but as a foundational layer in their payment stack: built in by design, not retrofitted after the fact.

What the next chapter of open banking demands, then, is something different: not more APIs, but more robust infrastructure underneath them.

• Open banking models evolve
• Compliance fragmentation disrupts global open banking expansion
• Compliance is becoming an embedded infrastructure layer
• Enabling scalable ecosystems

Open banking models evolve

The first generation of open banking was shaped by regulatory mandates and technological ambition in equal measure. 

Frameworks, like the revised European Union legal framework on payment services (PSD2), enabled third-party providers to access bank interfaces through secure APIs, opening the door to a wave of innovation across fintech, embedded finance and digital payments.

Today, financial institutions are connecting with large and evolving networks of fintech providers, payment platforms and data aggregators across multiple jurisdictions. 

A Cambridge Centre for Alternative Finance study found that open banking frameworks differ significantly across markets, and many in Southeast Asia and Africa have no formal framework at all.

The result is that open banking is evolving from a methodology or pursuit centred on API connectivity into a mature ecosystem that has at its heart consistent, flexible approaches to security, risk and regulatory compliance.

And within that infrastructure, compliance has emerged as the layer that determines whether global expansion is operationally viable.

Compliance fragmentation disrupts global open banking expansion

For financial institutions expanding across borders, the regulatory environment is not a single set of rules applied consistently.

It is a patchwork of overlapping, sometimes conflicting obligations that must be managed simultaneously, each with its own regulations that can change rapidly.

These include:

• Sanctions screening standards set at national and supranational levels that do not always align
• Anti-money laundering (AML) monitoring and reporting obligations that vary in scope and frequency
• Data-sharing and privacy laws that constrain how financial data can be accessed, stored and transferred across borders
• Regulatory frameworks that are themselves moving targets, requiring institutions to adapt processes continuously

The Financial Stability Board’s 2025 report to the G20 identified regulatory misalignment as one of the persistent challenges impacting cross-border payments, noting that prior to 2024 there were no comprehensive recommendations on the regulation of non-bank payment service providers engaged in cross-border activity. 

That gap left institutions navigating a fragmented landscape largely on their own.

The near real-time transaction volumes that open banking enables add further pressure. Traditional compliance stacks, often siloed and batch-oriented, were not built to assess and mitigate risk at the speed these systems require. 

For institutions operating at scale, that mismatch translates directly into higher costs, slower market entry and greater exposure to compliance failures.

Compliance is becoming an embedded infrastructure layer

The industry response to this complexity is already taking shape. With open banking transactions surpassing 120 billion annually in 2025, financial institutions are increasingly adopting technology as a solution to growing compliance needs.

One example is the adoption of RegTech platforms and compliance automation tools that combine identity verification, sanctions screening, transaction monitoring and risk scoring into integrated workflows, replacing fragmented, manually intensive processes with systems that operate continuously and at scale.

The shift toward continuous customer due diligence reflects this evolution. Rather than reviewing customer data at fixed intervals, compliance processes are updated as new information becomes available. 

AI-powered analytics are improving the speed and accuracy of fraud detection and financial crime monitoring, allowing institutions to respond to emerging risks in near real time.

What is most significant is where these tools are being deployed. 

Compliance capabilities are increasingly being embedded within payment networks and connectivity platforms themselves, rather than operating as standalone systems. 

This transforms compliance from a fragmented operational function into shared infrastructure that supports entire financial ecosystems, absorbed at the network level rather than duplicated by each institution in each market.

Enabling scalable ecosystems

Open banking bridges connect fintech platforms, banks and payment providers across domestic and international systems. 

When those bridges incorporate compliance-as-a-service capabilities, they do more than enable connectivity: they provide the governance frameworks that make that connectivity sustainable.

This means institutions can access, through a single integration, capabilities including:

• Integrated onboarding and identity verification
• Transaction monitoring and fraud detection
• Sanctions screening and risk assessment
• Regulatory reporting and audit trails

Thunes’ Fortress Compliance Platform reflects this in practice. By embedding real-time sanctions screening, transaction monitoring and dynamic risk scoring into global payment flows, backed by more than 50 regulatory licences worldwide, it removes the need for institutions to build and maintain compliance infrastructure independently in each market. Through one integration point, it provides a compliance layer throughout the Thunes Direct Global Network.

This model allows financial institutions to access multiple markets without duplicating compliance operations across jurisdictions. 

Compliance becomes ‘platformed’, as a shared resource that scales with the network, rather than a cost that scales with market entry.

The commercial consequences are meaningful: faster market entry; lower compliance costs; stronger regulatory resilience. 

Crucially, building an automated, scalable compliance engine grants the business the ability to focus internal resources on the services and experiences that drive growth, rather than on the infrastructure required to operate safely in each new market.

Connectivity cannot sustain global financial ecosystems without the regulatory foundations to support them. Compliance is that infrastructure, and the institutions that treat it that way will be best positioned to scale.

Ready to expand your open banking services with compliance built in? Contact Thunes to learn how the Fortress Compliance Platform can support your cross-border growth.