Today, I wanted to talk with you about how much time I feel you need or don’t need to spend studying your competitors.

It’s just so happened that in the last few days, quite a few FinTech founders asked me questions such as “how is it possible that our competitor can do XXX in this country when they don’t have a license there?” or “why is my competitor not asking for this information or has this section in their terms and conditions“?

Obviously, the REAL question behind the question is “what does it mean for my startup, are we missing something, should we do the same or not?“.

To be honest, I hate such questions because most of the time they don’t lead anywhere and don’t reveal anything. 

Just think about it… Maybe your competitor decided to do or not do something simply because they are testing the market or even just by accident. Or maybe they decided to take certain risks, which you may want or not want to embrace. Maybe their advisors overlooked something. Maybe someone made a mistake. Maybe you think that this is your competitor doing this service, but in reality, there is a white-label partner acting behind the scenes. 

Indeed, there is a product or service parity, meaning that customers may expect certain features or elements included, certain free benefits, or a certain level of protection and assurances.

However, there is no such thing as “compliance parity”. In other words, you cannot just copy the terms and conditions of your competitors or some of their disclaimers and assume it is going to work for you or somehow protects you without understanding what is the regulatory role and implications of this phrase, this provision, this transactional limit or this KYC question. Compliance works as a puzzle, where various elements complete the picture and work together. This is why mindless copying has zero benefits.

✅ Much better questions to ask would be:

• I want to offer this service in this country – how do I do it?
• My KYC process loses a lot of customers, can we simplify or optimize it?
• We have a lot of questions and complaints about this KYC step, how can we make our FAQ sections and visuals clearer?
• My card processor, bank, and payments partner refuse to process transactions from that country, how can I find a different solution for this segment?

I suppose, my main point is that – studying your competitors’ compliance practices and processes and contractual arrangements is very often unproductive and do not lead you to the results that you want because it’s not replicable.

What are your thoughts on this? I’m curious to know! 💭

If you prefer to listen to this information instead of reading, you can do it by tuning into this podcast episode of Compliance That Makes Sense. 🎙️