The Value of Financial Compliance

Business Development and Compliance teams have competing goals, resulting in a natural friction. Knowing how to extract value from this friction can provide a competitive edge.

BizDev & Compliance: A Love Story ❤️

Two teams with seemingly competing interests exist internally at each and every FinTech and traditional financial institution in the US — Business Development (“BizDev”) and Compliance teams, specifically.

Knowing Your Customer 🧑

“Know Your Customer” (“KYC”) is often a four-letter word at many FinTech startups. Simply put, KYC is a Federal requirement for financial institutions to collect and verify certain identity information from their customers. This is to ensure that businesses do not provide services to individuals and entities specifically sanctioned by the US Treasury Dept. This information includes:

  1. Date of Birth
  2. Address
  3. Social Security #
  4. Government-issued Photo ID
  5. Selfie

Compliance Builds Trust 🏦

FinTech startups require banking partners to operate, and banking partners require FinTechs to have adequate compliance programs. If a FinTech neglects its compliance obligations, their banking partner may break up with them, instantly killing the business if there is no backup bank.

Compliance By Design 🎨

Early-stage FinTech startups are not expected to have a robust compliance program from Day 1 — again, you need a product and customers before a compliance team is necessary. But it makes sense to consider compliance early in the product design phase to ensure, for example, that the business will be able to collect and verify very sensitive KYC data in a safe, scalable manner.

Bitcoin Compliance Professional