You're a banking entrepreneur who wants to succeed. What's the one mistake you can't afford to make?

1 Know your compliance requirements

The first step to compliance is to understand what laws and regulations apply to your banking business. Depending on your location, target market, and product offering, you may have to comply with different authorities and standards, such as the Financial Conduct Authority (FCA) in the UK, the Consumer Financial Protection Bureau (CFPB) in the US, or the General Data Protection Regulation (GDPR) in the EU. You also need to be aware of the specific rules for your type of banking service, such as lending, payments, or deposits. You can research these requirements online, consult with experts, or join industry associations to stay updated.

2 Build compliance into your business model

Once you know your compliance requirements, you need to design your business model accordingly. This means integrating compliance into your value proposition, customer segments, channels, revenue streams, and cost structure. For example, if you offer lending services, you need to consider how you will assess creditworthiness, set interest rates, collect repayments, and handle defaults. If you operate in multiple markets, you need to adjust your pricing, marketing, and customer service to different regulations and expectations. And if you use third-party providers, such as cloud platforms or payment processors, you need to ensure they are compliant as well.

3 Invest in compliance technology and talent

Compliance is not a one-time project, but an ongoing process that requires constant monitoring and improvement. To manage compliance effectively, you need to invest in technology and talent that can help you automate, streamline, and optimize your compliance tasks. For example, you can use software tools to perform KYC (know your customer) checks, generate reports, detect fraud, and encrypt data. You can also hire or outsource compliance professionals who can advise you on best practices, conduct audits, and liaise with regulators.

4 Embrace compliance as a competitive advantage

Finally, you need to adopt a positive mindset towards compliance. Instead of seeing it as a burden or a barrier, see it as an opportunity and a differentiator. Compliance can help you build trust and loyalty with your customers, who value security and transparency. Compliance can also help you gain an edge over your competitors, who may be less compliant or more exposed to risks. Compliance can even help you innovate and create new value propositions, by leveraging data, analytics, and insights from your compliance activities.

5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?