Effective governance of regional financial compliance risk is essential to safeguarding financial security and advancing the strategy of building a strong financial system. Fintech regulation provides new opportunities for preventing compliance risk. This paper treats China’s regulatory sandbox pilot as an institutional experiment implementing the principle of prudent and inclusive regulation. Based on incomplete contract theory， we use prefecture-level city panel data from 2014 to 2023 and a multi-period difference-in-differences model to examine the impact and mechanism of fintech regulatory pilots on regional financial compliance risk. The results show that the pilot policy significantly reduces regional financial compliance risk， especially in credit and data security fields. The policy generates a disciplinary effect on violations by improving regulatory alignment and government-bank coordination， and creates an enabling effect on compliance management by improving the local information environment and easing bank agency conflicts. Heterogeneity analysis shows that the policy works better in regions with insufficient human capital， weak technological foundations， low marketization， or weaker legal systems， serving as an institutional compensator. Further analysis finds that local fiscal support for technology and digital government development strengthen the effectiveness of the regulatory sandbox， which also drive compliance risk governance in neighboring cities. This study provides theoretical support and policy implications for fintech regulation， regional financial compliance risk control， and national financial security.