I live in a NYC co-op, and our co-op board does business with a community bank. I’m the treasurer, so I go there a lot, and I find their lack of bells and whistles a bit refreshing when I visit in person and they remember my name and that I’m the treasurer who hates math.
But their error-prone website is no fun. And reading their bank statements on a phone is nearly impossible.
Friday morning, I was listening to NPR while trying to get moving. Someone was talking about financial technology (fintech) and regulatory technology (regtech), saying neither are going away.
But with a period of deregulation coming in the financial services segment, we should prepare ourselves for the emergence of a new focus area for these businesses. Maybe we should call it Customer Technology or CustomerTech! (My terminology.)
From what I could glean from the voice on the radio, the interviewee thought financial services firms — banks in particular — will be clamoring to deliver services faster and error-free, over multiple platforms, and that tech resources will be diverted away from buying or developing some regtech tools.
It’s just a prediction, but it could happen.
So I get it. Customers want to be able to pay four bills, open a new account and change their user preferences all in two minutes, from a phone, while they’re waiting for the train. And banks would love to remind you in those minutes of other products and services you might be interested in.
The perception that a strong regulatory compliance focus is not customer-centered is erroneous, though.
The tools that can assist compliance officers follow regulatory and legal obligations (along with their expert judgment and research, of course) are what help businesses detect the red flags of money laundering, bribery, insider trading, performance or fee misrepresentation and a host of other investor-harmful activities.
And the public is aware that regulations help them. We got this lesson by seeing Wells Fargo get a very public brow-beating for its long-running, client-harming sales practices this fall.
We know baby boomers are retiring and need to have suitable investment products recommended to them.
And everyone agrees that data security is of top concern and the mantra of “that type of breach can’t happen to us” is long over. It does not matter which party is in charge of the federal government.
Cybersecurity is something the public cares deeply about, and not one business on earth wants to look like it got caught with impotent defenses. Plain and simple, resources must be allocated.
So, the banks can build a new online app that pays all of my bills while alerting me that I have a spin class scheduled for that evening. It’s convenient.
But please don’t divert money from compliance departments to get me there.
Julie DiMauro is a contributing editor of the FCPA Blog. She works in the Regulatory Intelligence group at Thomson Reuters in New York. Follow Julie on Twitter @Julie_DiMauro and email her here. The Thomson Reuters Regulatory Intelligence team’s recent report on regulatory technology can be found here.