I've worked in fintech for 30 years. I've never seen a product that was intentionally "only pretending to be compliant" with laws.

I've seen accidental non-compliance. I've seen what I would call negligent compliance, where a company attempted to be compliant but didn't meet full, correct compliance (one example I've seen is that a company assigned resources to compliance and forgot to increase resources as workload increased, causing them to be increasingly behind on compliance work), but I've never seen a company that just decided to pretend to be compliant knowing that they were not.

Never seen one or never worked at one? Because gestures broadly

In my experience this is not representative of most fintechs. Of course there are both cases of real intentional noncompliance, and accidental, but by and large it seems like everyone’s trying to innovate within the law.

This makes sense because these companies want to become large companies and contract with large companies. Large companies, by and large, try to follow the law (while trying to bend it to the limit) because they're aware they have a big target on their back and no CEO wants to be on the front page of the papers for tanking a company in such a stupid fashion.

Even if that's the case, I feel like accurately knowing which regulations you're in compliance with and not is would be kind of important from a risk management perspective. From a "maximize profits" perspective (which I'm not saying is good but what you're saying you thought they operated with), you'd want to know the potential gain from ignoring a given regulation and the likelihood of getting caught (along with the cost of the punishment if that's happens). This is the kind of math that I'd expect a finance company to be pretty familiar with, and giving that up for a fuzzy "idk if we're in compliance or not" check seems like a pretty huge liability (unless there's confidence in not being liable for blindly trusting the LLM, which I hope is not the future we're headed for but I guess I can never be totally confident in us not somehow ending up with rules that defy common sense).

Where did you get this impression from?

A worldview built on reading comments from news aggregators.

Companies that are growing tend towards faking compliance. Many financial rules like pci only kick in at certain scales. So a company growing very quickly will often be behind the curve but will do everything to seem like they are compliant. Then they would hire people like me to come in and make them actually compliant. More often than not, making an effort at improvement was enough to keep the ball rolling.

I think it's the same throughout startup software to be honest. It's just easier to point out when there's clear rules.

Security, GDPR, backups, build pipelines, disaster recovery, most of it will be faked, half-heartedly done once or ignored entirely.

Then there's the more abstract things like scalability, idempotency when integrating with external APIs, error recovery, accessibility, UX, etc.

Almost always that sort of stuff will have been entirely ignored, or there will be a fig leaf over a real mess of misunderstood standards or manual intervention steps.

Startup developers usually have to be generalists as they often wear many hats, so things that need deeper domain knowledge get done to a bare minimum.

In the same sense that selling illegal drugs is a very profitable business to be in, until it isn’t.

Nah. There are for-real consequences to that sort of thing and it's so not worth it.

Early stage startups, maybe, but most of those are three failsons in a trenchcoat. That sort generate more PR than revenue.