At our recent event, Cable hosted a conversation with Melissa Strait, Chief Compliance Officer at Coinbase, and Brian Brooks, former Comptroller of the Currency and current Chairman and CEO of Meridian Capital Group. This insightful discussion delved into the evolving landscape of compliance, the increasing regulatory scrutiny on BaaS providers and fintechs, and the critical role of a robust compliance controls environment. Here’s a detailed recap of the event, optimized for compliance teams seeking to stay ahead of regulatory expectations.
Melissa Strait highlighted what regulators look for in compliance programs: “This is what regulators are looking for, is that you set up your compliance program, you establish your policies and procedures. And what they are looking at is not only are those policies and procedures compliant with applicable rules and regulations, but also are you following them.”
Key Takeaway: Compliance teams must ensure not only that their policies and procedures comply with regulations but also that they are consistently followed. This is where Cable’s platform excels by automating compliance and ensuring adherence to these policies.
For more insights on how to improve your compliance team's effectiveness, read our this article.
Brian Brooks highlighted the rising regulatory attention on Banking-as-a-Service (BaaS) providers and fintechs. He noted, “I do think that we are seeing increased activity among the BaaS providers. And I think for fintechs that have various state-level licenses, money transmitters, et cetera, I also think those regulators are paying more attention.”
Key Takeaway: Compliance teams across banks, fintechs, and crypto companies must all be prepared for heightened scrutiny and ensure their programs can withstand rigorous regulatory examinations.
A major point of discussion was the importance of robust compliance controls. Brooks explained, “The thing that regulators are looking at when they hold you to your policies and not just to the law is they’re looking at the adequacy of your control environment… even if your policies are way stricter than the law itself, what it tells us is when you get to the edges of the law, you’re going to break that too because you’re not capable of operating in a safe and sound control environment.”
Key Takeaway: Compliance officers must focus on developing and maintaining a strong compliance control environment that supports their policies and ensures safe operations. By automating the effectiveness testing of those controls you can ensure that there’s full compliance oversight.
For more insights on why using proven compliance effectiveness testing solutions is often better than building them in-house, read our article on automated compliance solutions.
Brian Brooks highlighted the dynamic nature of regulatory expectations: “Regulators are rethinking their stance on [fintech] companies that have been flying under the radar, taking a much closer look at the risks they may introduce.”
Key Takeaway: Fintech compliance teams must stay vigilant and adapt to evolving regulatory scrutiny. Cable’s platform helps institutions proactively identify and mitigate risks, ensuring they remain compliant for their partner bank even as regulatory landscapes change.
To learn more about how fintech companies can stay ahead of regulatory changes, check out our blog post on empowering your compliance program in light of 2024 consent orders.
Strait and Brooks both stressed the importance of proactive risk management. Strait remarked, “Regulators are trying to get in ahead of that happening and identify deficiencies within the program that would need to be remedied.”
Key Takeaway: Proactive identification and remediation of compliance deficiencies are crucial for staying ahead of regulatory expectations and avoiding potential breaches.
Our recent event with Coinbase and the former OCC provided invaluable insights into the current compliance landscape. For compliance teams, the key takeaways include the need for robust compliance programs, the importance of a strong control environment, and proactive risk management. Cable’s automated effectiveness testing platform is designed to support these goals, helping financial institutions navigate the complexities of regulatory compliance.
To see the full compliance conversation we had with Coinbase and the former OCC, check out the complete video below.
Senator Warren Calls for Strong Oversight in BaaS: A Critical Moment for Banks to Embrace Automated Compliance
Exploring AI and Automation in Financial Crime Compliance: A Conversation with Cable and Greenlite CEOs
100% Automated Compliance Testing Is the Only Way Banks and Fintechs Can Grow
