Compliance Consulting: An Attorney's Guide

How Legal and Compliance Advice Work Together

At InnReg, we work closely and collaboratively with our clients’ legal teams (internal and external) to plan, build, and run compliance programs that meet regulatory requirements seamlessly and effectively. 

In fact, attorneys often refer us because they want to help clients operate in conformance to the way they have interpreted regulations on their behalf. We work with some of the most reputable regulatory legal firms in the world.

For attorneys advising financial innovators on next steps when it comes to the practical requirements of implementing compliance programs, here are five considerations to keep in mind:

Market Offerings

The field of compliance consulting covers a wide and varied range of services. It includes subject-matter experts who can respond to a very specific need (such as GDPR or other personal data and privacy rules).

The market also includes what InnReg calls “full-stack” service providers (which describes our own model). The full-stack consulting approach guides your clients through the details of strategic and technical partnerships, integrating technologies and setting up workflows, building a compliance function, and embedding compliance staff into their operations.

A full-stack provider can even provide executive-level professionals to serve as your client’s Chief Compliance Officer. 

Motivation, Focus, and Core Competency

Your clients may not have an inherent passion for regulation and compliance. They understand their importance, but what motivates them is launching, growing, and improving profitability for their business. They would rather focus on what is core to their business. In other words, they are eagerly looking for this support. In fact, they could even be personally liable for compliance violations. 

Fintechs and Fintech Partners

Your clients typically will not build all of the capabilities needed to run their business from a blank slate. In today’s world, they establish strategic fintech partnerships with one or more banks, clearing firms, providers of transactional infrastructure, etc. This entails tight integration of technologies between partners through transfers of data and APIs.

There is a strong regulatory and compliance component to selecting, negotiating, and finally implementing these partnerships. Your clients can avoid many pitfalls by working with an advisor with extensive experience selecting and integrating partners.

Designing and Building Compliant Products

There needs to be a virtuous cycle between fintech product definition and compliance needs. Once your client has a baseline interpretation of regulations for its business concept, that concept must be translated into specific features and functionality.

User onboarding, transaction processing, transfer of funds, reporting, and many other activities will ultimately be subject to regulation. Decisions made at the level of features and their regulatory implications are made iteratively in conjunction with product design. Insights from a full-stack compliance provider make a huge difference in a given product’s exposure to regulatory risk. 

Workflow and Operations

Effective compliance starts with optimized workflows before program implementation. Your clients need to establish detailed workflows for account opening, back-office operations, suspicious activity monitoring, and sales and marketing. A full-stack provider can help your clients design compliance into every step of their workflows with the experience to know what works well and what does not. This approach helps close the gap between what, who, and how.