Don't Panic: The IPA Helps You Navigate the Complex Compliance Landscape

“Hurry up! Do something! You’re going to lose your money!” yelled the FBI agent on a panel at the IPA Compliance Boot Camp.

Not only was I surprised, but so were all attendees.

After taking a moment to reorient ourselves, the agent explained that fraudsters know that putting people under pressure makes it harder to think clearly.

But it is not just criminals who are applying pressure. The regulators seem to be working on applying pressure to the payments industry as they release a flood of new regulations to govern just about every part of the fintech universe.
The IPA’s mission is to help the industry deal with that pressure by advocating for our members in front of regulators and legislators, and by educating our members on the latest developments and best practices in compliance.

Our Compliance Boot Camp, held earlier this month in Chicago, focused on the education part of our mission. Companies need compliance programs in place long before the regulators come knocking. As the world rapidly evolves, compliance plans need to cover the rules that are in place and anticipate what might be next. Being prepared can help compliance teams avoid mistakes that come with the pressure of regulations both new and old.
The Boot Camp’s agenda provides clues for any innovator as to the areas they need to assess in their own plans.  (The IPA would like to thank Discover for hosting this year’s boot camp, and Baird Holm for helping us to secure CLE credits for attendees.)

We started with a Regulation E refresher, because that is a foundation regulation for all payments products. Companies need to have these basics covered before they start offering payments products. By the same token, we also had the FBI present on Crypto fraud. Like so many payments products, Crypto is a tool for, though not a cause of, crime. We also covered third party oversight, because innovation involves working with companies outside the bank to make interesting products available to customers.

Looking ahead we discussed the new rules for Earned Wage Access products, and the possibilities that might be on the horizon when it comes to cannabis banking. We also spent time discussing open banking, which could create threats or opportunities for financial institutions and their partners. Whether open banking is a threat, or an opportunity will come down to preparation.

Finally, we spent time on artificial intelligence. While AI is often touted as the next technological wave, the financial services industry has been using it for decades in areas such as fraud detection and credit decisioning. AI is a place where the new meets the old, because rules like those governing fair lending don’t change just because banks add new decision-making tools. Companies will need to evaluate this new technology through a traditionalist lens as well as an innovator’s lens to make sure they avoid traps.

As the regulators move ahead with their agenda, compliance teams should take some time to plan out their agenda to ensure that they are prepared both to manage current regulators, and the new challenges that technology and regulatory changes may bring.

​Ben Jackson is the Chief Operating Officer of the Innovative Payments Association, a leading trade association representing companies in payments. With over two decades of industry experience, Ben is dedicated to providing valuable information, advocacy, and support to help members improve financial outcomes for consumers, businesses, and government agencies.