I was recently asked by a FinTech founder to help streamline, discipline, and re-motivate his compliance team. In his own words: “They complain a lot but I am not sure, how reasonable their expectations are.“

I found out that indeed, there was a lot of complaining going on: “We can do our compliance job just fine as soon as our customers magically get disciplined and learn how to produce better documentation, our auditors will ask fewer questions and give us more time to respond, our management will provide us with more resources, and if this is not too much to ask, we could do a really great job when the laws stop changing at least for a couple of years.“

Like, seriously? 🤦🏼‍♀️

It is quite common for CEOs and founders to hesitate before they push back against compliance, but in this case, it was exactly what’s needed. 

The tone at the top (which some people interpret as respect for compliance culture) does not matter. What matters is common sense at the top. In that specific case, there was no real problem with resources or extreme overload. It was purely a leadership problem: setting expectations, determining what is possible to accomplish with existing resources, and keeping people accountable.

Just one example: some compliance processes were not automated and required Google sheet files manipulation. The compliance team was complaining that this was a big issue because auditors might come and see how inefficient the processes are and would identify it as a deficiency. That’s not really true.

If you yourself declare to your auditors that your processes are inefficient or unreliable, they will gladly document your statements, but AML auditors or regulatory inspectors are not required or even trained to assess your operational efficiency and there is no regulation that prohibits the use of manual files. Don’t get me wrong – I am 100% for automation and elimination of the manual decision-making in compliance, but it is hypothetically possible to be reasonably compliant just using the typewriter and writing post-it notes.

What are your thoughts on this? 💭