Fintech Compliance Engineering Checklist for Product Teams

Financial software needs controls in its data model, access permissions, audit logs, and incident response process. Use this checklist to review those controls with the people responsible for your product’s legal and compliance requirements.

Identity and KYC

• Users who can hold balances or initiate transfers are verified before those capabilities are enabled. Verification state is stored as a structured record, not a boolean flag.
• KYC verification records are immutable. Corrections are stored as new records with explicit references to the original.
• Risk tiers are defined and documented. Higher-risk users trigger enhanced due diligence at the application level.
• Re-verification triggers are implemented: expired documents, change of address, elevated transaction volume, or specific product tier changes prompt reverification.
• Sanctions screening runs on every new user and on a periodic schedule against existing users. The screening provider and the list version used are logged with each check.
• Document uploads are stored in access-controlled storage. No direct public URL exists for identity documents.

Transaction Monitoring and AML

• Transaction monitoring rules are documented and versioned. Changes to rules are tracked with an effective date.
• Suspicious activity alerts are logged with the rule that triggered them, the transaction data at the time of evaluation, and the disposition of the alert.
• Transaction velocity limits are enforced at the application layer and cannot be bypassed by retrying with a new session or account.
• Structuring detection (multiple transactions just below reporting thresholds) is included in the documented monitoring rules.

Data and Audit Records

• All financial events are recorded in an append-only audit log. No application role has UPDATE or DELETE access to audit tables.
• Every audit record includes: event type, actor identity, timestamps for occurrence and recording, before/after state, and a reference to the source event.
• Audit logs are retained for the duration required by applicable regulations in each jurisdiction your product operates in. The retention period is written down and enforced in your storage policy.
• A periodic integrity check runs against your audit log to detect gaps, deletions, or alterations.
• Your audit log is stored separately from your operational database. Operational database failures do not destroy the audit record.

Access Control and Internal Controls

• Principle of least privilege is applied to database roles. The application role cannot read columns it does not need and cannot modify records it should not touch.
• Admin access to financial records is logged. Every admin action that touches a user account, a transaction, or a balance produces an audit entry.
• Separation of duties is enforced for high-risk actions. A single engineer or support agent cannot initiate and approve a large manual adjustment.
• Privileged access (production database access, admin tooling) requires a second factor and is reviewed on a defined schedule.
• Offboarding removes access to financial systems within a defined SLA. This is automated, not manual.

Money Movement and Ledger Integrity

• Every financial transaction is recorded in a double-entry ledger. The sum-to-zero invariant is enforced at the database level.
• Idempotency keys are required on every transaction creation request. Duplicate submissions produce the same result, not duplicate records.
• Balances are computed from ledger entries, not stored as mutable fields. Or, if snapshots are used, they are computed from entries and verified on a schedule.
• Refunds and reversals are recorded as new transactions that reference the original. Original transactions are never modified.
• A reconciliation job runs on a defined schedule and compares your ledger state to payment processor records. Discrepancies produce alerts with sufficient context to investigate.

Infrastructure and Data Protection

• Financial data is encrypted at rest and in transit. The encryption key management process is documented.
• PII (names, addresses, document numbers) is stored separately from transaction records where possible, linked by a non-PII identifier.
• Your data retention and deletion policy covers what happens to financial records when a user closes their account. Regulatory retention requirements override user deletion requests for the required period.
• You have a documented incident response process that covers a data breach affecting financial records.

Regulatory Reporting

• You have a list of the reports you are required to file, the frequency, and the data sources they draw from.
• Report generation is automated and tested. Manual report generation is a last resort, not the default.
• Report submissions are logged with a timestamp, the data included, and the confirmation from the receiving regulator or system.

Record each gap, the applicable requirement, and the person responsible for resolving it.

Discuss a fintech engineering review with LinkIT.