The Dirty Laundry Comes Clean: How Not to F#ck Up Compliance

Compliance IS sexy when it's done right! Erik Howell of Flagship Advisory Partners and Donald Riddick of Featurespace discuss rebuilding trust after fintech f#ck ups, what the foundation of compliance done right looks like, how your KYC/KYB can make or break you, and the best way to treat a compliance department to stay lean and nimble.   Key Takeaways. [0:00] Denise Johansson puts Donald Riddick, Company Secretary and Chief Legal Officer for Featurespace, and Erik Howell, Partner at Flagship Advisory Partners in the hot seat. [2:17] New standards and new tech are often the start of compliance. PCI DSS anyone? [4:55] Erik offers banks reassurance amidst compliance fuckups with methodical transparency. [6:17] Independent third-party assessments are Donald's fundamental health check to save banks the headache of uncertainty. He also offers that giving everyone time is key. [8:17] OK, compliance IS sexy, Donald. [9:05] Erik offers examples of transparency, and those more at risk of more opaque practices. [9:54] Self-certifiers are more prone to disaster, Donald offers a prime U.S. example. [12:26] With great liability for money laundering comes great KYC/KYB responsibility. [14:18] Erik shares his thoughts on picking your style of vendor. [15:10] Donald talks about dropped deals on the grounds of insufficient KYC/KYB. It is HUGELY important. [17:18] Factors of trust involve your choice of tools. [18:09] Evolving threat vectors mean adaptive processes. Donald talks about how to use machines to complement human weaknesses and vice versa. [19:33] What's your risk tolerance? Realistically, is it bank-level or gaming-level? [22:59] You can do high risk, but do it right. [23:51] Integrating compliance as a partner prevents it from slowing you down. [26:42] Ignoring dirty laundry will only make it worse, the same goes for compliance! Do it now and do it right. [29:00] Denise signs out until the next time she puts an industry leader in the hot seat.   People. Guest Erik Howell, Partner at Flagship Advisory Partners, a payments & fintech advisory boutique. Guest Donald Riddick, Company Secretary and Chief Legal Officer at Featurespace, a world leader in Enterprise Financial Crime prevention for fraud and Anti-Money Laundering. Host Denise Johansson, co-CEO and co-Founder of Enfuce, a female-founded fintech helping drive business growth, solve customer challenges, and extend financial inclusion.   Links. Flagship Advisory Partners Featurespace Enfuce   Guest Quotes. For a bank, enterprise, or strategic buyer, the tolerance for compliance screw-ups is zero/nil because it's such a latent risk. — Erik Howell, Flagship Advisory Partners, InTheHotSeat Because it links to the money, KYC is hugely critical. That's one of the first things I look at, and there's just no tolerance there if you're looking to buy the company. — Erik Howell, Flagship Advisory Partners, InTheHotSeat If 1% of your portfolio is high-risk gaming pay-in and pay-out, and it's NOT driving value creation, don't do it. — Erik Howell, Flagship Advisory Partners, InTheHotSeat So many suppliers believe they're doing things right and they've certified their own controls but they only exist on paper. — Donald Riddick, Featurespace, InTheHotSeat Some organisations aren't willing to slow down. There's a real danger in looking at acceleration without simultaneously looking at the dirty laundry. — Donald Riddick, Featurespace, InTheHotSeat On the vendor side, the core is that you can have these massive governmental penalties if you get it even a little bit wrong, or even if there's the appearance of getting wrong. — Donald Riddick, Featurespace, InTheHotSeat The value of your company decreases if you don't have sufficient KYC and KYB. — Donald Riddick, Featurespace, InTheHotSeat Whenever humans are involved in processes – we are wonderful as a species but sometimes we get things wrong: you have to reduce that. — Donald Riddick, Featurespace, InTheHotSeat   Denise Quotes. There is no room for error when it comes to compliance because you are not only losing trust with that specific customer or vendor but trust for the whole fintech industry. — Denise Johansson, InTheHotSeat It's one thing to have the right tooling and have the capabilities to do things right. But it's never only about tech. — Denise Johansson, InTheHotSeat @Enfuce and @Featurespace recently won the Celent Model Risk Manager Award. We combined our compliance people together with tech to provide a service. — Denise Johansson, InTheHotSeat Partner up with your compliance team, and make them a real part of the business because they are business enablers within your company. — Denise Johansson, InTheHotSeat