What’s next for youth-focused financial regulations?

Youth-focused fintechs already encounter a comprehensive regulatory framework that dictates how they design, market, and sustain their products. But financial and technological landscapes are notably dynamic—with new forms of money and movement forcing regulators to catch up with the times.

In the coming years, we should expect regulators to pay especial attention to the following areas, and continue building out guardrails for young people in particular.

Privacy

The proliferation of social media platforms as well as AI has created more targeted and efficient sales pipelines than its predecessors. Blanket regulations—that is, those that affect all ages and demographics—are already in the works at federal and state levels, including bans on TikTok as well as GDPR-esque frameworks governing data collection and storage, AI/ML use, and anti-bias measures.

These new regulations will have to account for existing protective measures, such as those outlined in the Children's Online Privacy Protection Act of 1998. We should expect youth-focused fintechs to have to continue explicitly seeking parental consent for and control over sensitive data, and potentially have to expand the language and degrees of transparency they deploy in these efforts.

New forms of money

While cryptocurrency’s future hangs in the balance, the blockchain-based financial product still has the potential to skirt around existing youth-focused protection mechanisms, including parental consent flows and KYC/AML measures.

Regulators have to determine how cryptocurrencies are categorized—whether they’re a security or some other financial instrument—and also explicitly outline how cryptocurrencies cohere with the rules governing other parts of finance. This may also open the door for cryptocurrency’s more regulated, diversified, and responsible use as a form of wealth building for younger generations.

A globalized world

As payments become increasingly borderless and instantaneous—with rails like The Clearing House’s Real-Time Payments network linking up with corresponding infrastructure abroad—lawmakers and other government officials have to contend to a greater extent with how international payments affect young people. How might regulators protect young bank-account holders from fraud efforts that lack the protection of slow international payments? How might companies hiring young influencers abroad be shaped by new rules?

Across the board, these developments will require the input of a range of stakeholders—from parents, to educators, to young people themselves.