As technology continues to dominate, it’s inevitably taking over in more industries; the payments industry is no exception. With customers becoming accustomed to having things done at lightning speed, they’re also expecting the ability to open accounts and begin using them at the same rate of speed. Regulatory demands are also increasing at an exponential rate as the fight against identity theft, money laundering, and terrorist funding intensifies. If the payments industry plans to keep up with regulatory demands and customer expectations, it needs to stay on top of trends and technologies which will satisfy the needs of both customers and regulators alike. Insert RegTech software: the digital identity verification solution which helps you to stay compliant with regulatory legislation, as well as reduce customer friction and wait times. Once you’ve decided to enlist the help of a RegTech company, how do you know which one to choose? The list below can help to provide some clarity and direction in choosing the right company for your business:
Vendor vs partner
As regulatory obligations become more stringent, RegTech companies are popping up like wildfire all over the globe. The term partner can be overused to describe traditional vendor/client relationships; however, it’s very applicable in the compliance arena due to the variance in companies’ risk profiles, and the options available. A RegTech partner is one who provides information on common approaches to compliance programs based on best practices amongst similar entity types. They will make every effort to understand your compliance requirements, providing tools and workflow suggestions which manage risk, and maintain your customers’ experience.
Regulatory legislation is a complex subject with many grey areas. You’re right to expect that your RegTech partner is creating a solution that meets and fits well with your regulatory compliance regime. It is, of course, your responsibility to verify that the tools you’re using will meet your compliance policies, but it certainly helps to know your partner won’t inadvertently cause audit issues in the future. You should also consider the breadth of customers that the RegTech works with, understand the certifications and experience of its product team, and also the firm’s relationship with regulators and legal advisors.
Network connections are extremely important in just about every aspect of our lives. You may find that networking on your own brings some success, but ultimately, it’s faster and easier if you have someone to facilitate that connection; the same rings true for vendor partners. Some questions to ask yourself are: how much of your compliance-related business will the vendor be able to assist with? Do their tools allow you to amplify customer acquisition by providing the maximum success rates in KYC? Do they assist with onboarding, monitoring and auditing? Or at least have the technological integration with other vendors and registries to assist with administration?
Most businesses, even though they can be very similar to others, are unique in their processes and procedures which is why the best partnerships are flexible. The ability to use a product or service on your own terms in a way that works best for your business is of paramount importance. When scoping out vendors, the best option is usually the one that’s flexible enough to adapt their product or service to your needs.
While most people are aware of the importance of security, do you know specifically what you’re looking for to ensure yours and your customers’ information is protected? Things like SOC2 compliance, vulnerability scans, external penetration testing, business continuity plans, and disaster recovery are just a few of the things you should be asking your prospective RegTech partner to detail for you. You may be surprised by how much (or how little) the company is doing to protect your data.
Although cost is the most important aspect for most people when choosing a vendor, it shouldn’t be the only deciding factor when looking for a RegTech company to work with. Ultimately if the numbers don’t fit your budget, then it’s all been for naught; however, the other points in this list should be top of mind. You may find a vendor that’s very low-cost, but if they’re difficult to work with, are lacking the necessary connections, or don’t have the appropriate security policies and procedures in place then there’s little to no value in contracting their services. That being said, an ideal vendor-partner is able to work with you to find a solution that is mutually beneficial.
While it may seem like a daunting task, choosing the right RegTech company to assist your business with KYC obligations will save you time and effort, and help to reduce customer drop-off due to a frictionless and fast experience. For more information on the benefits of working with a RegTech company, visit www.securefact.com or call 1(800)396-8241 to speak with someone about how we can help you.