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In 2022, the Financial Stability Board (FSB) published observations addressing the supervisory challenges posed by third-party fintech services integrated with traditional banks. The FSB noted that outsourcing arrangements involving Big Tech and fintech firms create complex structures that complicate regulatory oversight. These observations are relevant to the BaaS industry as they highlight systemic risks inherent in bank-fintech partnership models where regulatory responsibility can become unclear. While not an enforcement action, the FSB's commentary signals growing international regulatory consensus on the need for enhanced third-party risk management frameworks for banks engaging in BaaS and embedded finance partnerships.

Verified from source: The FSB released a report in March 2022 discussing changes in financial market structures during COVID-19, highlighting how Big Tech and Fintech companies strengthened their positions, with implications for financial stability including complex outsourcing and collaboration arrangements with traditional financial institutions.