Today’s financial services landscape is littered with new technology. Financial technology (fintech) companies are offering a new range of financial and banking services to consumers, and regulatory agencies are starting to hold them to many of the same standards that apply to banks and financial institutions. As regulatory requirements for companies in the fintech space evolve and change, it’s becoming increasingly important for fintech and financial services companies to stay on top of what changes affect them and what their new regulatory responsibilities are.
After all, fintechs and other financial services companies face steep fines and harsh penalties if they fail to adhere to banking and financial services regulations. Your company needs to make regulatory change management a top priority, so that you can remain in compliance and focus on meeting your customers’ needs. Use these tips to stay on top of the regulatory changes affecting the fintech space.
Track Regulatory Changes
Today’s fintech companies have to pay attention not just to state and local regulatory developments but national and global ones, as well. For example, the Office of the Comptroller of the Currency (OCC) has decided to give fintechs the option to apply for national bank charters, so they can offer banking services to their customers. Fintechs that have already applied for the charters include Social Finance, Inc (SoFi) and Varo.
You need to follow industry association and regulatory agency blogs and newsletters, read regulatory publications, attend conferences, and consumer specialized content from such media as Thomson Reuters and LexisNexis to stay on top of upcoming and emerging regulatory changes. Cloud-based regulatory change management tools can bring together data from all these disparate sources into one dashboard. Compliance professionals can use regulatory change management tools to create email notifications or curate RSS feeds to glean relevant information from various sources.
Establish a Regulatory Taxonomy
A regulatory taxonomy is a solid foundation on which you can build the framework of your organization’s compliance program. It’s helpful because regulatory responsibilities can vary by jurisdiction as your company grows and you open new operating locations in different states and countries.
A regulatory taxonomy is an index of the different regulatory areas that affect your organization. It starts on the highest level, with the regulatory bodies that affect your organization’s operations. The next level categorizes document types, then sources for regulatory news on the next level, attributes needed for filing and classification, and finally regulatory events and regulations on the final level.
Delegate Tasks and Emphasize Accountability
A cloud-based regulatory change management tool will ensure that the right tasks reach the right people, but you have to determine who those people will be first. You have to be clear about the responsibilities of each person in order to maintain accountability. Identify the subject matter experts in your organization who have the appropriate knowledge of laws and regulations needed to understand which regulatory updates are relevant to your organization and how to implement them.
There should be someone in charge of screening potential regulatory updates for their relevance to your organization, and then that person can pass relevant changes to someone who can perform a more detailed analysis of the change’s impact on your business. Documenting clear roles and maintaining accountability can help keep new information moving through to the end of the regulatory lifecycle – implementation – with total visibility into the process for senior management. Working with external stakeholders to implement new regulatory requirements is also important, since they will need to know about changes to the way your company is doing things.
Implement the Changes
Implementing financial regulatory changes can be a time-consuming and expensive process that can take financial services organizations a year or more to perform. Action plants will need to be assembled, with tasks spelled out for each team member. Workflows and approval processes will need to be developed. Escalation procedures will need to be established for when portions of the implementation become overdue. Everyone working on the regulatory implementation team will need to have real-time visibility into what is happening with the changes taking place and how they are affecting the organization as a whole.
Staying on top of regulatory changes is more important than ever for fintech companies, as banking and financial services regulators seek to bring these companies into the regulatory fold. Make sure you’re keeping up with the latest changes in the banking regulatory sphere, so you can keep your company up to date on its responsibilities to consumers and the government.