As more businesses can offer fintech solutions, there is also a driving need for compliance. Compliance is rigid in the financial world because financial institutions require sensitive banking information and send sensitive transaction info over the web. Therefore, if you operate any type of payment processing, either through a payment gateway, digital wallet, or fintech app, then you’ll need to have compliance handled.
Not only is compliance necessary for a startup, but it is also necessary to maintain throughout your business’ lifestyle. Read on to learn how something called compliance-as-a-service can change the way that your business manages its fintech solutions and compliance requirements.
What is Compliance-as-a-service?
Referred to as CaaS, compliance-as-a-service is a service framework that a business provides to facilitate the necessary compliance requirements associated with that business or industry.
In the fintech industry, Sila’s compliance-as-a-service provides the tools that a business needs to become initially compliant, especially since this startup takes longer (compared to other general startup procedures) and costs thousands of dollars. Not being compliant can cost you too, so it’s important to get this process confirmed.
What to Expect With Sila’s Compliance-as-a-service
When it comes to offering this service, there are four general categories offered: compliance during onboarding (startup compliance), compliance geared toward specific payment systems and for different apps, operational services, and educational or training services. Sila offers all four categories so that customers do not feel that they need to rely on Sila to remain compliant.
Here’s what you could expect if you were to hire Sila’s compliance-as-a-service:
Introduction and startup compliance during onboarding:
- Funds are optimized depending on the regulatory requirements of that industry and payment handling
- Procedures are reviewed so that they hit compliance obligations
- Onboarding support clarifies payment issues
- Businesses are advised on how to properly remediate payment and consulting issues
- The business’ technical security requirements are audited and met
- Business owners are introduced to high-level compliance consultants
Compliance that is built into the Sila structure:
- All stablecoins issued using Sila are done in accordance with the Office of the Comptroller & of the Currency
- Cash deposits are held accounts that are FBO and FDIC Member protected through the Bank Evolve Bank & Trust
- All Sila users remain outside of the flow of funds to limited liability
- The Sila app trusted third-party performs KYC & KYB that follows compliance requirements from all 50 states
- The app is non-custodial by default
Ongoing operational services provided through this service:
- Comprehensive fraud prevention
- Sila supports users with any required SARS filings, bank audits, and OFAC checks
- Identity verification conforms to necessary safety checks: Customer Identification Program (CIP)/Anti-Money Laundering (AML) and Bank Secrecy Act (BSA)
- Users can access templates for CIP and ACH Authorization
Customers are educated and/or trained on the following items:
- The regulations that user products are subject to
- Customers’ responsibilities that fall under the appropriate regulations
- What Sila handles for compliance (and where businesses need to fill gaps)
- Risks associated with faulty compliance
As you can see, Sila’s compliance-as-a-service offers not only the ability to get compliant but also the resources, support, and knowledge to remain compliant. Users can receive support through their startup years to become fully compliant on their own. Or they can continue to remain with Sila for compliance support, depending on how they scale.
Why You Need Compliance-as-a-service
Take Sila, for example. Compliance in terms of fintech would include complying with OFAC, SARS filings, bank audits, as well as ensuring that all identity verification checks conformed to Customer Identification Program (CIP) and Anti-Money Laundering (AML) regulations, as well as Bank Secrecy Act (BSA).
And this is just the tip of the iceberg.
When a business operates in a sensitive industry, it must first recognize that starting up and becoming initially compliant takes a long time. Compliance often takes two to three years and thousands of dollars. A fintech app might require PCI-SSD hardware if it is handling and storing sensitive data of any kind. Any third-parties that operate through the app might require certain authentication (for them to be compliant) and identity verification and non-custodial defaults.
Operating in an area that requires these checks but failing to do so could result in fines. Therefore, businesses take advantage of using a compliance-as-a-service to get compliant faster and operate with the peace of mind that their business would not be targeted if they were audited for compliance.
Scaling Your Business With Compliance-as-a-service
If you’re starting your fintech solution, then compliance is necessary. There is no way to get around compliance as it will eventually come back to haunt you (by way of fines). If you’re currently managing your business’ compliance needs, you’re likely well aware of how much time this takes up.
Therefore, outsourcing your operational compliance tasks and manual tasks can ease up time and effort on your end. It also minimizes the number of errors that you might accidentally incur just by missing compliance notifications or not having the experience and industry knowledge of a trusted partner like Sila.
Since every business is unique, the compliance-as-a-service offering can scale depending on your needs. In fact, it will need to. If you are looking for compliance outside of fintech, then you can likely find similar solutions within those industries. It’s important to find connections to those experienced in managing a similar business and remaining successfully compliant as that could make or break your business!
If you’re starting a fintech service, then you need compliance-as-a-service. This will help you start up faster, scale quickly, and save costs in both the short and long-term. See today how Sila’s compliance package can provide the ongoing support that your business needs.