Regulation capture is a serious problem. Second-order effects can destroy competition and stifle innovation. It's estimated that 80% of legacy bank's annual budget is spent on compliance and mandatory change, leaving 20% for innovation. If regulation is this resource-intensive how can new entrants compete?
The good news for FinTech product people is that UK and European regulators are attempting to encourage innovation and customer-centricity. Rules might not be perfect but the overarching objectives are sound.
For example, a key objective of the FCA is Consumer Protection, the majority of tenants associated with this objective can be covered in a well-run Product Discovery process. Having clarity on the customer problem, solving it with a great user experience and understanding your constraints gets you a long way towards compliance.
I believe approaching compliance with a robust product-led approach will ensure that the majority of resources are allocated to growth and innovation.
Even if you just follow general product development best practices you'll be in a good space.
However, there's an opportunity to enhance your approach to get to great:
1. Take teams on the journey
Engage Risk and Compliance teams early, better understand their area and share how product discovery and development is conducted...context is everything.
2. Get geeky
Go deep into understanding regulation (Obvious I know, but this isn't common) - the product is governed by these rules, understanding constraints at product discovery will help when developing the solution.
3. Integrate compliance in the process
Building a Product Discovery process that incorporates regulatory requirements. Helping to build a product where regulatory requirements invisibly enhance the user experience.
4. Product led Policies
Governance policies are signed off at the highest level so difficult to change or influence, however, if you have the opportunity, collaborate with 2LoD teams on shaping the product policies that dictate working practices.
Getting this right can have a profound impact on how the whole business views product development.
Integrating regulatory and mandatory change into your product development process will clarify constraints, allowing the team to focus on innovation.
After all being a product-led organisation means you’re focused on ensuring you’re meeting your customer's needs through innovation, pretty much what regulators are trying to encourage.
The good news for FinTech product people is that UK and European regulators are attempting to encourage innovation and customer-centricity. Rules might not be perfect but the overarching objectives are sound.
For example, a key objective of the FCA is Consumer Protection, the majority of tenants associated with this objective can be covered in a well-run Product Discovery process. Having clarity on the customer problem, solving it with a great user experience and understanding your constraints gets you a long way towards compliance.
I believe approaching compliance with a robust product-led approach will ensure that the majority of resources are allocated to growth and innovation.
Even if you just follow general product development best practices you'll be in a good space.
However, there's an opportunity to enhance your approach to get to great:
1. Take teams on the journey
Engage Risk and Compliance teams early, better understand their area and share how product discovery and development is conducted...context is everything.
2. Get geeky
Go deep into understanding regulation (Obvious I know, but this isn't common) - the product is governed by these rules, understanding constraints at product discovery will help when developing the solution.
3. Integrate compliance in the process
Building a Product Discovery process that incorporates regulatory requirements. Helping to build a product where regulatory requirements invisibly enhance the user experience.
4. Product led Policies
Governance policies are signed off at the highest level so difficult to change or influence, however, if you have the opportunity, collaborate with 2LoD teams on shaping the product policies that dictate working practices.
Getting this right can have a profound impact on how the whole business views product development.
Integrating regulatory and mandatory change into your product development process will clarify constraints, allowing the team to focus on innovation.
After all being a product-led organisation means you’re focused on ensuring you’re meeting your customer's needs through innovation, pretty much what regulators are trying to encourage.