What is an example of a high-risk customer in FinTech?

Choosing clients with complex ownership structures as an example of a high-risk customer in FinTech is based on the increased challenges associated with transparency and accountability. Complex ownership structures often involve layers of entities, which can obscure the identity of the beneficial owners. This lack of clarity makes it difficult for financial institutions to perform adequate due diligence and assess the true risk level associated with these clients.

Additionally, such complexities can be associated with various regulatory concerns, including money laundering, tax evasion, and other types of financial crime. Regulatory agencies often flag intricate ownership as a factor for heightened scrutiny, as these structures can be utilized to hide illicit activities. Therefore, understanding the ownership and organizational structure of a client is crucial to ensure compliance with Anti-Money Laundering (AML) laws and to mitigate potential risks effectively.

Other options describe scenarios where the risk level is generally perceived to be lower, such as individuals with transparent backgrounds, businesses with clear records, or customers from stable jurisdictions. These characteristics typically signify lower risk because they facilitate easier identification and verification processes, critical for maintaining compliance in the FinTech space.