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Building a Culture of Compliance with Faraz Rana · COMPLY: The Marketing Compliance Podcast

• 0:06
  Speaker 1: Hey, there. Come high podcast listeners and welcome to this week's episode. This week's podcast features a special guest for Oz Rana , founding team member and former Chief Legal Officer, br I'm current co-founder and c e o of Affinity. During today's episode, I sit down with Ross to discuss building a culture of compliance, including what the compliance team and processes looked like when he started and ended his time at Bread , how we prioritize what needed to be done to build this true culture of compliance, how technology can be an integral part of the compliance process, especially as it pertains to automating and scaling this function. And finally, some top tips for FinTech listeners as it pertains to their compliance programs and readying them for bank partnerships. Thanks for listening and enjoy . Hey, Praz , welcome to the Comply podcast. Thanks for being here.
• 1:03
  Speaker 2: Thank you for having me.
• 1:05
  Speaker 1: Yeah, we're thrilled to have you on. So why don't we just jump in and have you introduce yourself to our listeners?
• 1:11
  Speaker 2: Yeah, so , um, I'm Praz , uh, used to be a lawyer, still am a lawyer , um, but I was a corporate lawyer and , uh, decided to leave , uh, practice of law to go into startups. So , uh, in 2014, I joined a small company FinTech company called Bread Buy Now, pay Later Company. Um, and I joined them when we were four or five people , um, just a bunch of people with laptops and a dream. Uh , and we built that to a 200 person company and got acquired in 2020 by a bank. Um, so I've been on the FinTech startup journey for about a decade now.
• 1:49
  Speaker 1: Very cool. And I think Wonder Journey is, is super interesting in of itself, but I think a lot of our listeners are in that same ecosystem of fintechs trying to partner with banks. Um, so we're super excited to have you on and then hear some of your expertise of, of what you learned over the years.
• 2:05
  Speaker 2: Yeah, I'm excited to share. Awesome.
• 2:08
  Speaker 1: So let's start with your time at Broad . Uh, can you just talk a little about what the compliance team looked like and the processes that you built and, and kind of what they looked like when you first started and then kind of where they were when you left?
• 2:20
  Speaker 2: Yeah, so when I started , uh, we had nothing. Um, and you know, it was sort of , um, um, you know, again, it was like four or five people in, in a small room with laptops and , um, so there's really nothing to build from a compliance perspective back then. And so, you know, when I joined , um, part of me felt like, well, am I, am I really useful here? Like, what am I doing? Um, and you know, in hindsight, you know, I do think that there's a huge intangible benefit to having someone with a legal and compliance background be part of that initial team. Um, I think it builds , um, what , what I think of is like the core d n a of the company, the core d n A is hopefully mostly tech technology, so good engineers. But , um, if you can weave in some of the other non techno technological areas into that initial early foundation , um, I think it only grows from there. So, you know, I was sitting opposite our software engineers and they would pull me aside and ask me a question. Um, they always , uh, you know, to this day a lot of my colleagues joke, the first time I saw software code, I was blown away because , uh, you know, as a lawyer you don't really understand how technology works, and then you go look at a computer screen, you're like, oh, so this is what's powering the world. It's just lines and lines of code, right? . Um , but , uh, you know, we would pull me aside, they would ask me questions and I would ask some questions, and one of the first things I think I learned how to do was , um, learn, learn to ask the questions that'll help me understand the business. Um, I think that's where a lot of folks who work in legal compliance , um, forget the importance of really understanding the business objective , um, and the product that we're trying to build and what really the business outcome is as opposed to just mitigating risk.
• 4:04
  Speaker 1: Absolutely. Yeah. I think , uh, a couple things that you said there, like building it into the d n a of the business from the get go , how much easier that probably was in the long run than trying to come back in later. And then I think , uh, just like you said, understanding the business model , um, because if you can match the goals of the, of the other folks you're working with, then life will just be easier. So that makes a ton of sense.
• 4:25
  Speaker 2: Yeah, and it's all , I mean, you also bridge that relationship, right? You're , you're no longer the mitigant , you're the person who is working alongside them to build, you know, an alternative solution if the current solution isn't working from a legal or compliance perspective. So , um, I think that was really helpful to me for, to be part of that initial team and kind of help build the initial product , um, and kind of build it into the, to the core foundation of the company. Um, so when we were 200 people, like it was a very natural thing for us to do , uh, to kind of weave in compliance and legal as part of the company.
• 5:00
  Speaker 1: That's awesome. And to know that compliance is enabling these other departments to, to do their jobs better. That's, that's very cool.
• 5:07
  Speaker 2: Yep .
• 5:07
  Speaker 1: So how did you prioritize what needed to be done to build this kind of culture of compliance you're talking about?
• 5:15
  Speaker 2: Um, so , uh, one of the first things I would focus on is writing stuff down. Um, so even early on I did a lot of , uh, I did a lot of memos to file and I , I wrote down processes and , uh, nobody read them. Uh, so they were in my secret little file that , uh, nobody read. But you know, what that forced me to do is really refine my thinking about what I wanted to build in , in terms of a core infrastructure. Um, and, you know, there's a lot of companies who really value writing , um, as part of the culture. And I, I think , um, I think there's some merit to that. So Amazon famously is like a very big writing culture. Um, and I don't think that's for every company, but at least for me, writing stuff down , um, you know, as processes or whatever , um, uh, force me to refine herbal, how's this gonna work when we're 10, 15, 20, 30 people or 50 people, you know, we didn't think we would ever be that big, but like, you know, 200 people at one day. Um, and you know, one of the things that I think is so important when you're building a compliance , um, program is, is really understanding how you're gonna operationalize the program. So it's one thing to write stuff down, it's another thing to actually take that into a three dimensional world and begin to think about, all right , well now I know who's in engineering, I know who's in sales, how do I get the two of them to talk , um, and do a, b and C that I've written down on paper? Um, and so, you know, even thinking through those problems that are gonna arise when you actually try to operationalize it , um, is really important in the beginning. So that's what I did. I wrote a lot of stuff down. Um, and then , um, and then I got help . I hired smart people smarter than me to help , uh, to help , uh, me with my team. So we ended up, when we were done , uh, a seven p uh , person team , uh, across legal and compliance, which is small for a two , but for a 200 person company, it seemed like the right number. Yeah,
• 7:08
  Speaker 1: That's very cool to grow from the four to five people and the whole company to seven folks in compliance. That's awesome. Yeah. So this is a perfect segue of talking about scaling and growth. When you, you know, you're reaching those, those larger numbers, technology can be an integral part of that process. And sometimes when we talk to folks, it can be daunting to the teams that we, we mentioned, you know , like incorporating a a com technology piece into their compliance systems . So can you speak to the role that technology can play when it comes to automating and scaling some of these processes?
• 7:42
  Speaker 2: Yeah. Um, so I'm reading a book right now called Automate Your Busy Work , um, on Audible. Um, and I'm fascinated with this idea of, of sort of , um, uh, automating everyday tasks. And the book is just, it's a short book about four to five hours, about how there's so many tools out there today that can automate a lot of things that we used to take for granted. And we just thought, because we're built as humans to think we need to do the busy work, right? Right . And the whole premise of the book is , um, if you can sort of, you know, automate the busy work, it allows you to take a step back and really focus on the 80 20, right? What , what's the, the , the small percentage of work I'm gonna do that's gonna have the most impact on either my work or my relationships or whatever it is that you're trying to achieve. Um, and so, you know, I I think a lot about that in terms of today's technology when it comes to building , uh, fintechs, but also in legal and compliance as well. So I think there , there are two things that when it comes to technology, people wonder about, you know, first is a technology good enough, right? Is it, is it good enough to really replace a smart human? Um, and second the elephant in the room, is it gonna replace me eventually one day, , right? So the first question I think is, you know, my opinion on the first question is, we all know technology gets better over time, right? It's, it's just aligns the software code and eventually you can make it better enough so that it can, I think , uh, do as good of a job as a human can on most repetitive tasks. So like, technology will get better if it's not good today, it's gonna get better to a point where it does, it does sort of, you know , um, do the same thing that a human can do. The second question is a tough one, right? Especially in the environment that we're living in today. And, and there's this whole debate about AI and whether AI replaces especially sort of compliance and legal roles. Um, and I, I mean, I think the opinions are varied , but my view is , um, if we say that this time it's different, right? Somehow this time , uh, technology will replace humans and humans will have absolutely nothing to do. I think we're like ignoring the mountain of evidence that has existed for like hundreds of years, where like every time technology has come into an industry and a sector, people have adapted mm-hmm . . And so I think technology augments it doesn't replace the human. Um, and, you know, even, you know, thinking back to our days at Bread , um, we used to , um, one of, or so one of my compliance team would , uh, go through, so we were buy now pay later, company marketing was a big deal for us, especially with our merchants doing marketing on our behalf mm-hmm . . And we could have someone who would sit there and review 200 websites once a week , um, going through all that marketing that our merchants were producing in our product. Um, and it was a horrendous task. I mean, I, I felt so bad for my, my team member , um, and you know, like humans are fallible because I have emotions like sometimes you're bored, sometimes you're hungry, sometimes you haven't had enough coffee. Yeah . And you know, you're gonna miss something. And so eventually we automated that process with a product like Perform Line , um, which, which really comes in and, and says, all right , we can do the same thing in five minutes. Um, probably with a lot more precision because, you know , um, um, you know, the, the software code is able to pick up on details in a very , um, in a very automated way. And guess what? Now that human being can go on and focus on more creative or impact building tasks. So , um, I we're not to, not to make an advertisement about Perform Line , but I'm a huge fan of products like Perform Line that do that. And, and yeah , I've seen it happen where people are then able to really make more of an impact on tasks that are not as repetitive. So , um, to answer your question, I think technology is coming into compliance in a very big way , um, especially now. And I think it's really gonna augment how people are able to function at the workforce, not necessarily replace them . That assumes that people are willing to adapt though. Um, if you're not willing to adapt , um, you know, if you're that person who, you know, won't accept that email is somehow gonna replace how people communicate and you're like, ah , this'll go away. It's just a fad. Um , then I think you're in trouble. So I think you have to adapt and accept that it is coming.
• 12:15
  Speaker 1: Absolutely. Yeah. I mean, everything you said, I think we feel spot on and we appreciate the , um, shout out to perform line . We always say like, let technology do what technology does best so that humans can do what humans do best. It's not a replacement, it's just, you know, to go back to what you said earlier, we're enabling these teammates to do, like you said, more creative, better work. Um, and like you said, there's mountains of evidence over decades and decades now just to, to facilitate that argument. So I think that makes a ton of sense.
• 12:46
  Speaker 2: Yeah, I'm in, I'm in San Francisco right now, and I , I hear you see these self-driving cars.
• 12:51
  Speaker 1: Yeah. Uh ,
• 12:53
  Speaker 2: Uh, and I live in New York, and, and you don't see them, I don't think self-driving cars will ever work in New York, , and these are variability on the road. Uh, you know, it's like when you, when you took that driving test in, in high school, you know, where there's like things emerging from like the, you know, that old lady walking in and the bicycle and you have to like , you know , learn how to navigate. Like New York is like 10 times that , uh, I don't know if , if self-driving cars will work, but here you see them everywhere. Um, and it's kind of freaky to see a car on the road, you know, with no human being inside just driving casually along the road. And, you know, I was thinking about it , I was like, is this any different, you know, than the, the car replacing the horse in buggy a hundred years ago? Um, you know, have we, like, is this somehow different? And I think it's a very myopic view to say, well, now it's different somehow and that humans won't adapt. So , um, but yeah, it is, it is kind of weird to see those cars on the street, .
• 13:48
  Speaker 1: Yeah. Oh, I can't imagine. Absolutely. And maybe New York will be like the ultimate point of success for driving self-driving cars, . That's how they know , uh, they're here to stay ,
• 13:59
  Speaker 2: Right ? That's right . Cool . Yeah .
• 14:01
  Speaker 1: So we've a lot of listeners who obviously are on compliance teams at fintechs, and they're either partnering with the bank currently or they're hoping to partner with the bank in the future. So what are the top tips or suggestions , uh, you have for them as it pertains to their compliance programs and readying them for these bank partnerships?
• 14:21
  Speaker 2: Yeah, so the one thing I always tell people , um, who are either embarking on a bank partnership or who have just gotten into it, is , um, you will underestimate how much work it is , uh, to work with a bank partner. Um, and it's only getting more cumbersome with time because a lot of bank partners are under a lot of regulatory scrutiny , um, to have more oversight over their fintechs. So , um, and I think that's naturally how it's supposed to work. The whole idea behind this bank partnership model was, you know, regulators saying, look, banks, you're not good at technology. Um, we know that. Um, and so in order to survive in, you know, the modern environment and get new customers, we're okay with you partnering with people who are good at technology, who are creating these cool new interfaces and products, as long as you have complete oversight over their product and what they're doing, right? Don't think of them as a third party. Think of them as an extension of your bank. Mm-hmm. , um, right. That was sort of the, the condition of doing this partnership thing. And so that's evolved over time. Um, the , um, so, you know, I think thing number one, I always tell people , um, the bank is in charge, right? They're , they're, they , they call the shots, especially when it comes to compliance. Um, and if you, if you believe otherwise, you're just gonna constantly be frustrated when they veto a product idea or they ask you to send back up on something . So , so go into that relationship knowing that while I am bringing the bank new customers and I do have something of value here , um, ultimately the bank is the one calling the shop. So if you do that, you're almost accepting how this relationship is supposed to work. Um, and then the second thing is , uh, it is , uh, uh, there's just a lot of operational work that you need to do to get that relationship set up and to maintain it. And so what I recommend to companies, especially early on is , um, try to model in one f t e into your kind of business plan. Who's gonna be managing this relationship, or 80% of their job is gonna be managing that relationship , um, because it ends up being something that is significantly , um, uh, significantly a lot of work. So if you're just a founder of a company, probably it's your job to do it right now, but once you get to 10 people, I think it's not , um, I think it's a good idea to maybe think about someone, and it doesn't need to be a chief compliance officer, it could just be a junior ops person mm-hmm . . Um , but their job is to take in all that inbound and maintain that relationship. Um, so , um, yeah, the bank is in charge and it's a lot of work, so , so be prepared to maintain that critical relationship.
• 17:00
  Speaker 1: Perfect. Well, finally, obviously your background's super , uh, impressive and , and very cool the journey that you've been on, but I wanna make sure we get a chance to talk about what you're currently working on. So can you tell us a little bit about Affinity and , um, on the same note as rest for conversation? Like why is training and development so important when it comes to compliance management
• 17:23
  Speaker 2: Management ? Yeah, so we , um, we're building, so Affinity is a compliance training platform that we decided to build just for regulated industries. Um, and what does that mean? Um, we wanted to build a platform that allowed people to train their own employees , um, also train external parties. So if you've got like a bank and you want to train all your FinTech sub-portfolio organizations, you can do that through this platform. So , um, you know, it was, training was a big part of building this culture of compliance , uh, for us at Bread . And I , I saw the impact of that , uh, you know, from day one, sort of, you know, when I, when I first joined, one of the first things I did was create a training program. Um, and every new employee that would join, I would sit down with, you know, the cohort of employees who joined that quarter, sit down with 'em in a room for two hours and like go through , uh, all the trainings. And it wasn't so much training, it was, Hey, this is, you know, you may not have worked at FinTech, you may not have seen what a bank partner is, or you may not know our regulations. Like here's all that context mm-hmm. , right? It's a big part of what we're building, and here's all the information and the background information you need, so you feel like you're more part of the ecosystem. Um, and I thought it, I mean, I, I could be biased, but I did think it had an impact on how they thought about the function of compliance within the company. That it's not just something that's like a, you know, back office function. It's truly like a core part of the company. Um, and so I continued doing that, you know, until we were about 150 people. And then it eventually got too big and I had to like leverage that out to , or delegate that out to my team. But , um, we used to do a lot of functional trainings and I just found that people, you know, when it was relevant to them , um, people actually found it helpful and useful, and I think it made them better at their jobs. Um, and by relevant to them, I meant, I mean that we really took the trainings and said, all right , you're product person, you know, let's forget about the regulation, but here are all the things that are relevant to you as a product person, right? When you're building the UI of the product. Like, here are the things you need to think about and this is why. Um, so back to Affinity, you know, we, our core thesis is that , um, learning and management , uh, at regulated companies, especially FinTech companies and financial services, is a area that , um, makes companies smarter and more effective at what they do and allows for more employee engagement. Um, and then why we decided to build it, we actually looked at the tools in the market. 'cause I was doing this as a side project , um, and , uh, I had, I called one of my engineer friends, I said, can you help me build this thing? We'll just do it as a side project. We might make some money , um, but oh , fun to build this. And then when we started building, we realized that , um, wow, the tools out there are really not that good for training, and they're just, you know, they were kind of outdated technology. Um, and we thought we could do something way better , um, just by using today's technology. So , um, the , um, the kind of last thought on this , the idea of culture compliance , um, that was , uh, I used to say this a lot of bread and I still continue to believe this, you know, I think companies get in trouble. I used to say like, our, our compliance program is as good as the last person we hire, right? It's not the, it's not the, you know , core compliance team that's gonna mess up. It's not the, you know, senior leadership, it's the junior person who joins, who's employee number 147, who just doesn't know better because they haven't worked in this industry before. And so, you know, your culture of compliance has to continue every time you have a new person join and has to be an extension of what you've already built. Um, and I think training is a way to do that.
• 21:10
  Speaker 1: Very cool. I love that. As good as the last person we hired . That makes a ton of sense and, and definitely resonates , um, with what we hear from folks we talk to. So, very cool. And we always say too , training , um, like ongoing training and just learning from the team, like that's a key part of compliance. Like technology can help, but like you said, everyone has to be up to speed on what's going on. So very cool. What you're doing. Um, thank you so much for joining us in the Comply podcast. Where can folks find you and , and learn more about what you're up to ?
• 21:41
  Speaker 2: Yeah, I would do the thing of following me on Twitter, but I've got four followers on Twitter,
• 21:47
  Speaker 1: awesome.
• 21:49
  Speaker 2: And I'm pretty sure three of them are not humans. Uh, they're bots . So , uh, don't follow me on Twitter. I've got nothing interesting to say there. Um, but if you , um, if you would like to learn more about our product Affinity, please just email me for us at it's affinity.com , um, it s affinity.com, and we'd love to show you a demo of our product. Or you can just email me with any questions about FinTech or bank partnerships. I'm always happy to chat.
• 22:15
  Speaker 1: Very cool. Well, thank you so much for your time for us . This has been a blast to talk to you.
• 22:19
  Speaker 2: Awesome. Thank you. Likewise.
• 22:24
  Speaker 1: Thanks for listening to this episode of the Comply podcast. If after today's podcast you're interested in learning more about building a culture of compliance, especially at your FinTech or bank, I have a few resources for you that I will drop in today's show notes, including a piece titled FinTech Partner Bank , relationships, regulatory Roles and Responsibility, and another around marketing compliance Trends You need to know for both FinTech and partner banks. As always, the latest content on all things marketing compliance, you can head to content dot perform line.com . And for the most up-to-date pieces of industry news events and content, be sure to follow Perform Line on LinkedIn. Thanks again for listening, and we'll see you next time .