Ending the Tug of War: How Startups Can Help Banks Innovate
Startups can drive amazing innovation by rapidly iterating across ideas and testing with users
By: Matthew Goldman
Mar. 14, 2014 01:33 PM
Banks face a difficult tug-of-war every day. Consumers demand innovative new services - regulators demand security, compliance and soundness of all offerings. How can a bank resist being pulled in every direction and find a middle ground?
Startups Provide Innovation
Startups can drive amazing innovation by rapidly iterating across ideas and testing with users. Startup product and service design and usability typically eclipse the made-by-committee-and-regulators look of bank applications.
Banks attend conferences throughout the year looking for innovative new partners. The excitement of possible collaborations is often tempered when you return to the office and discuss the regulatory implications with your business development and compliance teams.
Banks need a way to find compliant startups that do a great job of customer service and satisfy regulatory rules and frameworks.
Startups that Scale for Security
Signs of a bank-ready startup:
We didn't just describe a unicorn: these startups to exist. The founders know they need a bank partner to launch their product (either as a part of the solution or as a customer). The founders understand what banks need to do from their side and they built their business from the ground up with respect for compliance.
Starting Right Leads to Efficient Compliance
The development of Wallaby's digital wallet software began less than two years ago, and included a strong focus on security from day one. Last month, we received our first Attestation of Compliance with PCI Level 1 Security Standards. It required twelve months and less than $50,000 to achieve this because it required so little rework and retraining.
Having participated in PCI compliance audits before, we were familiar with the requirements: We had all the basics like a firewall and anti-virus. We hired engineers for Wallaby with a security mindset. We took the approach that the standards are the minimum. We built our own tools instead of spending thousands on software.
This focus on compliance extends throughout our business. In our short history as a company, numerous partners have audited us. From our financial statements to our office, we keep everything in order at all times.
The Tug of War Ends Here
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