Over the last decade, the fintech industry has developed rapidly: as of July 2023, more than 20% of the unicorns are fintechs. However, the industry has added challenges in terms of the constantly evolving regulations. These strict compliance policies put a particular responsibility on businesses that fundamentally influence product development.
In my previous article, we talked about how to navigate fintech compliance in product development, from basic regulations to the compliance requirements implementation plan. In this article, we’ll focus on launching a fintech product under the compliance and regulations.
How to build a compliant fintech product
Coordinating cross-functional teams, such as engineering, UX/UI design, marketing, and sales, with compliance in mind requires extra effort from product managers.
Remember that the regulations aren’t meant to discourage you and your team from developing outstanding and unique products but rather to lead you in the right direction, mitigating risks and making the whole industry safe and reliable.
Product/feature definition: Ensure that your team has all the prioritization, sizing, and documentation required to start building a product. Our compliance requirements implementation plan may be helpful.
A short recap on the previous article: Ensure that you have developed all necessary documentation and had it approved by your legal team or compliance officer. This includes compliance policies and procedures, an information security program, user data policies, and a partner information process.
Everyone involved in the product development and launch should understand how the product will be built, interact with users, and evolve. They should respect users' vulnerable data and make sure it is properly secured, as well as have a clear vision of partner relationships and what rules they have to follow to ensure your product’s regulatory compliance.
It might sound daunting and discouraging, but it can be more like a learning exercise that you and your legal team organize for the product team.
Engineering: Build the product, ensuring the engineering team implements all compliance rules. It is essential to understand that the legal team gives recommendations while the engineers execute them.
Engineers develop software and technological systems that meet compliance requirements like transaction monitoring, implement security measures and access controls to protect customer data, build adaptable systems to follow changing requirements and work with other teams to detect and fill compliance gaps.
To make sure that your engineering team is ready to develop and maintain the systems that are aligned with compliance, communicate the following:
1. Confirm compliance needs early and outline regulatory boundaries: provide the engineers with the compliance requirements implementation plan.
2. Collaborate with the compliance team: ensure your engineering and legal teams communicate. Yet, be a mediator between them, as they might face communication issues: make sure you can translate and clarify technical and legal terminology and details.
3. Design a compliant architecture that is adaptable to new regulations: create plans to implement regulatory changes swiftly to prevent delays and failures.
4. Ensure scalability: build the architecture with growth in mind, flexible and scalable for business expansion.
UX/UI design: Provide designers with the specifications needed to start the project. The UX research and wireframes will be of help, too. The design will play a critical role: interactions with users should be as transparent and seamless as possible while remaining compliant.
For instance, users might need help understanding why they are being asked to submit personal information, and therefore the UI design features must provide an explanation for these additional requirements using consumer-friendly language. Regulators constantly monitor the websites and apps to ensure compliance, so your design team will need to pay close attention to every detail.
Marketing and sales: Give the marketing and sales teams clear guidance on the product and compliance requirements to aid in developing and executing product launch strategies. Product marketing compliance ensures that your advertising and promotional activities adhere to the applicable regulations and laws.
Since the marketing team is going to communicate the product's uniqueness to users and collect and process user data, the team should comply with the following: messaging and positioning, the marketing toolset (CRM, analytics, online advertising, email marketing, and much more), campaign channels, user data, etc.
The sales team will work directly with clients (especially in B2B), so ensure it has an accurate pitch deck — a visual statement about your product and what it's designed to do. The sales team should be ready to answer any questions regarding data safety and regulations compliance that your product is under.
Despite the fact that the fintech industry is under strict regulation, it’s growing rapidly, producing unique for-the-market products that make our financial lives simpler and more secure.
It might sound like regulatory compliance obligations fall on the shoulders of product managers completely, but this is not the case. Product management plays a crucial role in any company's development; however, the laws and regulations are the responsibility of every employee.
Being accountable for the safety and reliability of the industry should be a key message for every team member within a fintech.
Feeling overwhelmed by all the rules and regulations you need to follow? Let us help guide you.