I’ve been coming across a lot of articles on cross border compliance and how it is supposed to reduce friction, so I thought I would share a personal example.

I lived in the US in 2022. On my way back to Brazil, I made a mistake I still think about: I chose a “modern” remittance fintech over my legacy bank.

My money got stuck when it reached Brazil.

They were routing through Banco Rendimento back then. Something got flagged on their end, and suddenly I was on the phone trying to explain myself just to move money that, through Itaú, would have been instant. It would have been more expensive, but T+0.

To release the money, I had to fill out a form with a significant amount of sensitive information about me and my wife, along with my income statements from the past three years, proof of address, and bank statements from both my Brazilian and US accounts to prove the money was mine.

I had a working visa, an employment contract, and I was sending money from my Chase account in the US to my Itaú account in Brazil, same person on both sides of the transaction.

But it didn’t matter.

I think about that every time someone tells me compliance is getting better in cross border.

Here’s the thing. PIX works. It’s fast, it’s cheap, and Brazilians trust it. But PIX is domestic.

The moment you go cross border, you are still dealing with the same problems that existed ten years ago.

KYC that doesn’t talk between institutions, sanctions lists that flag anything slightly unfamiliar, and fintechs that built a great front end and then handed the compliance piece to someone who didn’t really care.

Open Banking is supposed to fix part of this.

In Brazil and Mexico, it is already giving lenders data on people who never had a credit score, which is a big deal because 70% of LATAM adults are underserved by traditional credit.

BNPL players are starting to build on that.

But underwriting models are only as good as the compliance layer underneath, and most of them have not been stress tested yet.

Crypto was also supposed to solve cross border friction here.

But right now, PayPal, Gemini, and Paysafe are all dealing with lawsuits tied to disclosure and compliance. That is what happens when you grow faster than your risk framework.

The ones who figure out compliance as a product, not an afterthought, are the ones who actually win.

Compliance is not improving cross border, it is just shifting where friction shows up. Sure, Itaú is legacy, but when I used it before it worked exactly as expected, fast.

I may be wrong, but at least in Brazil, with the backdrop of corruption scandals and increasing Central Bank mandates, compliance is only getting tighter, and fintechs will have to adapt or absorb that friction themselves.