Podcast June 22, 2021

Compliance: Behind every great Fintech is risk management

powered by Sounder

Compliance often used to be seen as something you reluctantly dedicated resources to in order to please the lawyers. But that’s changing… Because behind every great Fintech is the ability to manage risk.

Who said compliance can’t be sexy?

Certainly not today’s guest, Charlie Delingpole, Founder and CEO at ComplyAdvantage, where his work helping companies leverage compliance as a strategic business asset is finally making compliance sexy.

In this episode, we discuss:

  • The kinds of risks compliance addresses
  • Why compliance is a competitive advantage for Fintech
  • How ComplyAdvantage is making compliance intelligent

Managing risk

If you’ve started a Fintech company, you may initially think that the biggest challenges are getting your product into the right hands, or maybe that your app is a seamless experience, but you’ll quickly learn that one of the biggest threats to your business are outside risks — especially when it comes to financial crime.

Namely, money laundering, and terrorist financing.

Now, no startup likes to think they may possibly contribute to such terrible crimes, but you soon realize that you need to designate a money-laundering reporting officer to ensure these sorts of things do not happen in your organization.

“In every industry, in every geography and every sub-sector, there are major forms of risk. ” — Charlie Delingpole

For Charlie, seeing these risks be seen as somehow secondary to other business concerns like growing revenue didn’t sit right. He wanted to make it easier for financial organizations to do things the right way.

So, he started ComplyAdvantage to help companies manage their compliance in a simple, yet effective way.

The competitive advantage

If you think compliance is merely a box you need to check so your lawyers won’t be upset, then you are missing out on the real purpose of maintaining compliance: the strategic advantage it gives your organization.

“Compliance is a competitive advantage — both due to what happens if you get it wrong and faster onboarding and lower costs. ” — Charlie Delingpole

There are two primary reasons why compliance gives you an edge:

1.The massive costs associated with failing to comply and having something go wrong.

This is an exponential problem, too. One mistake here can lead to a cascade of — potentially very costly — issues for your organization. Even worse, you may be shut down entirely.

The costs of maintaining compliance are often minis use when compared to the costs of failing to properly mitigate risk

2. The lower prices associated with a compliant organization.

Compliance lowers costs across the board and even makes onboarding easier. It’s not just avoiding negative outcomes, it is also ensuring you reap the benefits of positive ones.

The future of compliance

As more and more Fintechs proliferate internationally, compliance becomes even more important to manage.

Yet, the global scope can make it exponentially more complex as every geography may have its own rules and regulations.

Ideally, you want compliance and risk management to scale whereby managing risk becomes easier as you grow, not more challenging.

“We’re trying to make the system so intelligent and advanced — and seamless and costless — that the regulatory threshold shifts and you can go far toward eliminating financial crime. ” — Charlie Delingpole

Aas more companies realize how important compliance is, it becomes apparent that leveraging the newest and best technology will help organizations achieve this.

That’s where companies like ComplyAdvantage come in.

They hope to continue to advance their platform to the point where compliance is something no one has to worry about because the service is high-tech, intelligent and, perhaps most importantly, something that works without too much thought needing to go into it.

And considering the huge benefits they already provide in the compliance world, this laudable goal will be welcomed across the financial industry.

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Until next time!

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