While political priorities come and go, strong compliance practices should remain constant. Done properly, Marqeta’s chief compliance officer Alan Carlisle said they are a competitive advantage. Carlisle offers more than 25 years of compliance experience with Marqeta (NASDAQ:MQ), SoFi, banks, broker-dealers, crypto firms, and venture capital firms.
Carlisle relishes the challenge of addressing the unique compliance needs of hundreds of fintech brands on one side and many banks on the other. He seeks uniformity through data normalization; that gives him an informed view of program performance and risk acceptance and manifestation.
Key qualities of successful compliance teams
A level head and active listening skills are two important qualities for compliance officials. Understand that issues arise. Deal with them as they happen, correct them, and move on stronger than you were before.
Listen more than you talk, especially at the beginning. Establish trust and maintain regular communication.
That forms a foundation that allows an effective compliance team to be proactive. Carlisle said those open lines of trusted communication allow teams to look for potential issues before they happen. Otherwise, the reactive stance risks becoming self-perpetuating, taking the firm’s eyes off the future.
“Any compliance officer’s role is to be a storyteller and manage their project portfolio and move it forward,” Carlisle explained. “But if your project portfolio is always backward-looking, it will remain backward-looking until you get your things fixed and can hopefully be more proactive and look to the future.”
Carlisle said compliance is a unique area because success is when nothing happens. Proving negatives can be hard to quantify. That’s why data-driven compliance systems are so important. Artificial intelligence is beginning to be applied to compliance. It has the potential to help officials be even more proactive.
Political priorities change, strong compliance shouldn’t
There is much talk of pressures subsiding under the Trump Administration. Carlisle said regardless of which party is in power, priorities often change every four years. Smart compliance teams recognize this, and the further role of macroeconomic events. Deal with what is known, and that is the importance of developing a stable, long-term strategy, regardless of the buzz coming from D.C.
Companies must still protect consumers at all times. If they have an international presence, strong compliance strategies from a firm foundation for proceeding.
The sooner the better when it comes to instituting proper measures. Carlisle likes being a constant in the product development process. With that established foundation of communication, officers can freely ask the builders what can go wrong while respecting the creative process.
“Let’s think of that 2X standard deviation event of this product that we’re building or this service that we want to launch,” Carlisle said. “What do they think as the person building the product? What do they think as the person marketing the product?
“Ask what could go wrong, and do that in an intellectually honest way. You’d be surprised how often that brings you to the right solution that is compliant with existing regulations and probably sustainably compliant, because it is keeping the consumer at the center of your thought and how you build your products and how you market your products.”
AI and compliance
Fintech watchers are talking about the possibilities for AI. Carlisle sees many, beginning with anti-money laundering. AI can help filter through the noise generated by traditional systems to more quickly address key threats. Previously unidentified correlations can deliver value. Train machines to complete the entry-level compliance work and it delivers quicker results while freeing humans for higher-value and more meaningful work.
“Making some sort of linear connection financially to an outcome is difficult, and so that’s what generates the conversation of how to get more efficient in proposed rulemaking and existing technologies, or new technologies,” Carlisle said. “That’s where we’re having conversations around where to leverage new technology. And it’s not just to save money; that is obviously a benefit that we’re looking to derive from it, but it’s also to get better at finding signals of issues faster.”