Compliance used to be something thrown into the background, often confined to legal departments. However, it’s now stepping into the spotlight and becoming a crucial factor for growth in both traditional financial institutions and fintech companies.
This shift means compliance isn’t just something to think about after launching a product. No, it needs to be woven into the fabric of product development right from the outset, as Raul Leiba, Vice President of Publishing at Visa DPS, emphasized in a recent interview.
Leiba noted that compliance and regulations were initially focused on legal requirements. Nowadays, regulators utilize laws, formal regulations, as well as consent orders and examiner guides, which make it tough for companies to stay updated on the latest changes.
Falling behind on these adjustments can lead to significant fines—sometimes reaching millions. Moreover, non-compliance can damage a company’s reputation, hinder partnerships, and stifle future innovations. Issues like consent orders and the secondary effects of audits can also delay product launches, which impacts expected revenue.
Challenges Faced
While larger financial institutions might have ample resources, smaller banks, credit unions, and community banks face the same scrutiny but often lack the means to build a solid compliance team. In addition, third-party responding agencies confront additional intense scrutiny, complicating their compliance obligations.
A Proactive Strategy
Leiba pointed out that taking a proactive approach can pay off by ensuring all stakeholders are on the same page. This alignment minimizes risks.
A recent PYMNTS Intelligence Report on modern card issuers—produced in collaboration with Visa DPS—revealed that a well-integrated strategy sets top-tier publishers apart, especially when it comes to maximizing customer lifetime value (CLTV). This agility helps associations adapt quickly while recognizing competitive constraints.
However, around 42% of publishers surveyed shared their struggles with compliance despite having invested in these efforts. Leiba mentioned these challenges were affecting, at the very least, several areas involving regulatory compliance.
For publishers, it’s important to “build compliance into your culture from day one.” This means leveraging AI and automated monitoring tools with partners who understand regulatory hurdles and fostering meaningful relationships.
Interestingly, the study found that both high CLTV publishers and regional publishers emphasize compliance features when selecting processing partners, demonstrating the significance of these collaborations. Additionally, issuers experiencing compliance difficulties are 38% more likely to benefit from processors focused on compliance.
Visa DPS has been actively assisting its publisher clients to navigate these challenges.
Leiba explained that Visa DPS is staying ahead of evolving regulations by investing in AI-driven tools that monitor regulatory changes in real-time across over 200 countries. These technologies provide concise summaries of updates to keep compliance teams informed.
Beyond tech, Visa DPS has assembled a dedicated team of compliance experts who collaborate closely with product and legal teams to align regulatory guidelines with product development.
Incorporating Compliance
According to Leiba, regulatory monitoring tools and compliance experts can nurture an integrated compliance culture that starts right at the development stage.
He emphasized that as publishers and fintechs launch new products and services, compliance should be part of the early design process, not just an afterthought.
Organizations that view compliance as an integral aspect of product development often avoid operational bottlenecks and minimize internal inconsistencies that delay their reaction to regulatory shifts.
Ultimately, compliance is no longer just about avoiding fines; it’s becoming a core driver of trust and customer loyalty.
