Jumping through compliance hoops as a money transfer startup (Wired UK)

Wired Money 2014
Wired Money 2014Michael Newington Gray

What keeps the CEO of a global money transfer company up at
night? It isn’t a riddle, neither it is a joke — “this is the dark
side,” says Mike Laven. “It’s all about the presumption of

In the daily interactions between the Currency Cloud — the
company Laven is CEO of — and banks, the presumption in the
discussion is that they lie somewhere between being criminals and
trying to be, he explains at Wired Money. “It’s actually fairly
rational and it’s the rational part that’s the hard part right

If you look in the money transfer business, banks make nothing
— or practically nothing — but if they screw up, their penalties
and costs could be hundreds of millions of dollars. “The asymmetric
risk wont go away. Banks will continue to be under pressure from

Laven understands — he has to deal with the same issues
himself. “A thousand times a day I have to figure out who the good
guys and the bad guys are.” The tools for doing this, he adds, are
“just totally inadequate”. There are no solutions out there that
are good enough, which is why he still ends up having to ask people
to show him their utility bills.

“We have to solve the digital identity problem and we have to do
it in a way thats reputable. If you are a good guy on Tuesday, it
doesn’t mean you are a good guy on Wednesday.” There are no systems
to make that move smoothly and reflect the interconnectedness of
the world we live in, without meaning a high cost for

Regulation is something he sees as his friend. It helps create a
barrier to entry and forces innovation. This is why, Laven says “we
decided what we would have to do is comply with the most stringent
requirement of the most stringent regulator”.

There does need to be more regulation clarity, he concludes, but
there also needs to be more challenger banks, particularly in the
UK. “There’s not enough banking innovation here,” he says. “Banks
can rest on what they do because no-one is challenging them.”

He also urges others to work with him to create a more
effective, more secure solution for dealing with digital identity,
so that regulatory compliance is no longer the thing that keeps him
up at night.

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Source: wired.co.uk

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