Every business involved in the money transfer ecosystem has an ethical responsibility to ensure that money moves safely, securely, and ends up in the right hands. ‘Compliance’ is the official set of rules to ensure that this happens but it’s really a question of culture that must run throughout the business.
The key question at stake is how you can create a compliance culture inside a technology company. Let’s look at what drives a tech company: agile responses, the ability to think on your feet, creative team work, and relentless focus on the customer. Compare that with what typically drives a regulated financial company: a requirement to play by the rules, the need to judge every creative technical solution not just on the basis of whether it’s the minimal viable product, but also on whether it meets compliance standards. This is the challenge we face when we sit down to plan our future.
The culture associated with driving agility and creativity seems to be at odds with the culture of driving compliance and regulation. One of the challenges that FinTech faces is how to bridge that gap. It isn’t easy, but it can be done and we’re doing it.
The banks have always scolded FinTechs like we were 4 years old, ‘Just wait ‘til you grow up and live in our regulated compliant world, then you’ll learn about agility and creativity, and why we move slowly.’ ‘OK, yes Dad!’
So why should we even care? Put simply, we have a duty of care to ensure that we have no part to play in funding or sanctioning illegal activities. The purpose goes way beyond the idea of regulation and compliance. This is just the mechanism – the set of documentation, rules, processes and procedures that enforces the right thing to do. It’s not just making sure we’re not sending money to people on the terrorist watch list. In fact, that may be the easiest part as those lists are now well circulated and regularly updated by government. It’s also the Ponzi schemes (so beautifully titled in the bureaucracy as MLM—multi-level marketing,”) tax avoidance, VAT carousels etc.
Every time I hear a FinTech start-up CEO say “we have this great business model, if only we didn’t have this whole regulatory regime to get through we’d be off and running”, I know I’m listening to somebody who doesn’t have a clue about a) what’s important in the world, and b) how the world really works. Any CEO of a business involved in money transfer who says that this isn’t a key part of his job doesn’t get it. It’s not ‘compliance’ (which sounds like something you request from bad children), it’s the job. It’s what we do.
Compliance does not just belong with the compliance team. It’s a responsibility that must be understood by customer service people when they’re talking to customers, business development people when they’re talking to prospective customers, and developers when planning and prioritising their tech designs. We don’t do this because it’s the rules, we do this because we’re a business that touches the world – moving money internationally is a sensitive thing, and we take that responsibility seriously.