4 Tips for high growth fintechs looking to do compliance right

February 10, 2022 Entrepreneurs, Start-ups, Small Businesses, FinTech and Alternative Finance, Fintech Services, Innovation and Resources, Legal Issues, Regulation, Consultation No comments

Griffin Blog | Anna O'Shaughnessy | Feb 3, 2022

compliance for high tech startups - 4 Tips for high growth fintechs looking to do compliance right Compliance is one of the most important aspects of any regulated business. But keeping pace with an ever-increasing mountain of laws, regulations, rules, and guidance can feel like pushing a boulder up a hill—especially for early-stage companies who are new to the financial services sector.

If you’re running a lean startup, where’s the best place to put your limited resources as you build out your compliance team? And if you’re a compliance officer operating with a small team (or a team of one, which is often the case), how do you build an effective and scalable approach to compliance that’s going to protect your business and your customers, both now and as you grow?

See: Know Your Customer – and your Obligations – in the age of Real-Time Rails and Open Banking

As the Chief Compliance Officer at a startup seeking authorisation to become a UK bank, I deal with these questions every day. I know that getting it right is going to be critical for Griffin’s success, our customers’ experience, and our reputation. And while there are no hard and fast rules, the four simple tips below are worth keeping in mind if, as a compliance officer, you feel like you’re constantly playing catch-up in a fast-paced environment.

1. Focus on what matters, not what’s urgent

For me, the secret lies in having a clear understanding of the most material compliance risks in the business and the areas where there is the greatest potential to cause harm to customers. This means performing compliance risk and conduct risk assessments and keeping these up-to-date (an annual review is an absolute minimum).

2. Standardise, delegate, educate, repeat

Lay the groundwork early; start standardising and delegating decision-making within the compliance team before the company hits a high growth phase, otherwise you can inadvertently become a bottleneck.

Also: Security advice for emerging tech companies and investors

The same goes for empowering other areas of the business with the right knowledge and training to decide on the right approach to compliance for themselves.

3. Hire for broadly applicable skills over narrow expertise

Compliance teams tend to be last on the list for additional headcount and are often forced to be reactive in how they work. But firms increasingly recognise the importance of a proactive approach and we are seeing more investment in compliance across the industry. When that budget is there, compliance officers should aim to recruit new team members at least six months ahead of when they think they need to—this is the first step in switching the team’s default mode from reactive to proactive. Plus, as compliance professionals, many of us have a hero-like tendency to work long hours trying to “fix” everything - so proactive hiring is also key to making sure your team members don’t burn out.

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