Global FinTech Guide
Country Name
United States
FinTechs belonging to this category provide identification services, which are required for most banking services.


Attitude of the country towards identification services

While many have been working towards universal identity solutions, there is no universally accepted means of identification under United States law. Each regulated activity that requires customer identification – banking, broker-dealer services, money transmitters etc. – has its own regulations regarding means of customer identification, and each service provider has its own means of implementation. While many of these requirements arise from the same sets of underlying laws, different government agencies have implemented these mandates in different ways, and different organisations all have their own different policies and procedures regarding what is permitted to verify identification. 

Legal affairs

Obligations and requirements to provide identification services

Obligations and requirements are largely dictated by the customers of the identification services and the services that are being provided. Identification may be required for AML/KYC, especially designated national checks (e.g. anti-terrorism), child protection law compliance, accredited investor verification or other reasons. Determination of identification may be outsourced to third parties. Those who collect this information must comply with applicable privacy laws. Certain regulated industries require privacy notices and have limitations on how personally identifiable information may be utilised. Many states, most notably including California, also have their own privacy laws that limit the use and dissemination of personally identifiable information. In addition, while not a United States law requirement, many identification service providers may come into contact with personally identifiable information of individuals located in other jurisdictions, which may require them to comply with the EU or UK General Data Protection Regulation (GDPR) and other non-United States laws. 

Additional comments regarding the legal situation for identification services or what FinTech’s must be aware of in this business area

There is a trend for states to adopt or propose privacy laws that are similar to the California Consumer Privacy Act or GDPR. Even in industries where there are no legal requirements for customer identity verification, such as NFT platforms and investment advisers, service providers frequently mandate identity verification as well as anti-money laundering, anti-terrorism, sanctions, and know-your-customer compliance.

Economic conditions

Market size for identification services and biggest companies in this business area

There is no reliable market data in this area. 

Additional comments regarding the economic situation for identification services or what FinTech’s must be aware of in this business area

Due to relatively low barriers to entry and an increase in FinTechs providing retail services that require customer identification, there have been many recent new entrants in this market. 



© 2022, Polsinelli PC. All rights reserved by Polsinelli PC as author and the owner of the copyright in this chapter. Polsinelli PC has granted to Multilaw non-exclusive worldwide license to use and include this chapter in this guide and to sublicense Lexis Nexis, a division of RELX Inc. and its affiliates certain rights to use and distribute this guide.

The information in this guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.


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