Scaling for Success: Why Compliance Must Grow with Your Business
Balancing Growth, Risk, and Compliance in a Scaling Payment Firm
As payment firms scale, they must ensure that their risk and compliance frameworks evolve in tandem. The challenge is not just about meeting regulatory requirements—it’s also about maintaining investor confidence and positioning the business for long-term success.
From the perspective of industry experts, including a founder, a Chief Risk & Compliance Officer, and compliance advisors, this article explores how scaling businesses can effectively manage compliance, mitigate risks, and secure investment.
The Role of an MLRO: Balancing Proportionate Growth and Risk Management
“You don’t need the full framework on day one, you need to be proportionate,” says Marta Lia Requeijo, UK Chief Risk & Compliance Officer at ClearBank. Compliance is not about building an overly complex structure too soon but about implementing the right controls at the right time.
Marta highlights the importance of a proactive approach: “Seeing FCA notices: could this happen to us? What are we doing to mitigate this?” The regulatory landscape is constantly shifting, and firms must remain agile to stay ahead.
Moreover, MLROs should adopt a forward-looking mindset: “Don’t focus on what you have done, focus on what you haven’t done prioritise and duly report it to all relevant governance fora.” This ensures that businesses address emerging risks before they become regulatory issues.
Founders and CEOs: Aligning Compliance with Business Strategy
For founders and CEOs, compliance is not just a box-ticking exercise—it’s a strategic asset. Steve Lemon, co-founder of Currencycloud and Partner at Volution, puts it simply: “Compliance isn’t just policy and process, it’s the people.” Ensuring the right expertise is in place at the right time is critical to maintaining a compliance-first culture while enabling growth.
Anthony Corner, Payment Services Senior Manager at Thistle Initiatives, notes: “What the regulator expects and what shareholders and investors expect will always be different.” While regulators demand operational resilience, investors are looking for scalability and profitability. Striking the right balance between these priorities is key.
As firms grow, compliance should not be seen as a blocker but as an enabler. Marta reinforces this point: “Compliance is a diversifier [for investment] in the market.” Investors are more likely to back firms with strong compliance frameworks, as it reduces long-term risks.
Engaging a Third Party: When and Why?
Bringing in external expertise at the right time can make the difference between smooth scaling and regulatory roadblocks. Lorraine Mouat, Payment Services Partner at Thistle Initiatives, advocates for “Just-in-time compliance.” This approach ensures that compliance frameworks scale in line with business needs without being a drain on resources.
Anthony emphasises the importance of getting the fundamentals right: “Doing the basics well and building on top of that.” Payment firms do not need to be over-engineered from day one but should focus on a solid foundation that can adapt over time.
A third-party compliance expert can help firms identify gaps in their framework and ensure alignment with business strategy. Marta notes that “compliance needs to be aligned with the business strategy,” reinforcing the idea that it should not be treated as a separate function but as a core pillar of growth.
FCA Expectations: What Payment Firms Need to Consider
Recent FCA fines highlight the risks of failing to implement robust compliance frameworks. Firms that have struggled with financial crime controls, operational resilience, and safeguarding customer funds have faced significant penalties.
Recent FCA requirements include:
- Consumer Duty: Ensuring firms act in customers’ best interests.
- Operational Resilience: Demonstrating how firms can withstand disruptions.
- Financial Crime Compliance: Strengthening anti-money laundering and fraud prevention controls.
Anthony warns that “the regulator hates the word ‘manual’.” Automated, data-driven compliance solutions are increasingly expected, and firms relying on outdated manual processes may struggle under regulatory scrutiny.
Risk and Resilience: Preparing for the Unexpected
Scaling a payment firm inherently involves risk. Steve candidly states: “If you don’t want risk, don’t set up the business.” However, it is not the presence of risk that defines success, but how firms respond to it.
Lorraine reminds firms that “business is a risk.” Rather than avoiding risk entirely, firms must have robust mechanisms in place to identify, assess, and respond to issues as they arise.
Anthony echoes this sentiment: “Assume bad things will happen and plan to react to them.” Proactive risk management ensures that firms can navigate regulatory scrutiny and operational challenges without jeopardising their growth.
The Future of Payments Compliance
The payments industry is at a turning point. Anthony notes: “We are at a tipping point of how firms will manage payment firms. How the FCA interprets the UK payments vision will be key.” With more money invested in UK fintech than in the next five countries combined, regulatory oversight will continue to evolve.
As the industry advances, successful firms will be those that embrace compliance as a strategic differentiator. “Having a line of communication ensures immediate feedback and conversation to respond to risks promptly,” Steve advises. Radical transparency with regulators, investors, and internal teams will be essential to building a sustainable, scalable business.
Conclusion
Scaling a payment firm requires a delicate balance between growth and compliance. By adopting a proportionate approach, aligning compliance with business strategy, and leveraging third-party expertise when needed, firms can ensure they are both regulatory-compliant and investor-ready.
As Marta puts it: “It’s what you do with the risk and how you react.” Those who proactively manage compliance as they scale will not only mitigate regulatory risk but also enhance their attractiveness to investors and secure their place in the future of payments.