Ep. 20 Delivering Good Outcomes: how regulatory compliance promotes trust and growth

(upbeat music) - Hello and welcome to the Revolut Insider Podcast where we explore Revolut's rocket ship from the inside out one episode at a time. I'm your host, Alex Carill. And joining us today, we have Daniel Watkins, head of regulatory compliance here at Revolut. Hi Dan. - Hi Alex, thanks for having me. - Thanks for being here, can I call you Dan? - Kushkan. - Fantastic. Head of regulatory compliance. Can you explain what that is and what you do exactly? - Yeah, of course I can, no problem at all. So my role in effect is to oversee how we perform what we call regulatory and conduct management within Revolut. Primarily that means that we want to make sure that we're designing products and services for our customers that deliver them with good outcomes. And also we want to make sure that we're avoiding any potential customer risks where we can. So I oversee our various teams and our different territories that help us achieve those objectives. - Seems like a lot. - Yeah, it is. And it's an interesting challenge. So I think about this in different ways really. We have our differing regulatory compliance teams in different territories. And so we're overseeing how they perform, supporting them, understanding their unique challenges for their local markets. Within the UK we want to make sure that specifically of course as Revolut limited our electronic money institution that we're providing end-to-end good products and services for our UK customers. So it's the role of regulatory compliance to make sure that our customers can have all the information they need to make informed choices. But because Revolut limited is also providing those products and services to other markets, we want to make sure that we're building the right products and services with compliance in mind. Then we have conduct risk management, which effectively means that across the life cycle a customer may have with us, that we are managing and mitigating any risks that they may face. - Seems like you have a lot to do, Dan. So I really appreciate you taking the time to talk to me today. And about Revolut's efforts when it comes to regulatory compliance and how that plays into productive customers. And how we build products and services to meet their needs. So thank you. - Honestly, no problem at all. I genuinely thank you for having me. And I think it's really important that we discuss regulatory compliance because I think from a customer's perspective perhaps it's not really clear what that means. No, thank you for having me. - Of course, yeah. Well, we know that as a financial services company or a Fintech company who deals with money, we obviously have controls in place to ensure our customers can make informed decisions to what role does regulatory compliance play in this? - I think there's a number really. So some of the regulations that we help provide our opinions on and support our customers on as a result speak to a number of different facets. So it might be that we're making sure that in the background we're protecting our customers' funds through a process called safeguarding. The process of safeguarding is an equivalent measure whereby an electronic money institution is to protect customers' funds by ring fencing it off from their own funds. So that might be one aspect of regulations that we need to consider. But another is around how we ensure that certain informational requirements across a customer's journey are known and understood for a customer so that they can go through sort of the beginning life, so I can love, well, I've seen a product that I quite like where I might need. And so I want to click on that and go through the customer journey of having that for myself. What information do I need to understand to make sure that I understand the parameters of that product or service properly? And another part is we do quite a lot of work in the background about regulatory compliance for processes that perhaps even sometimes our customers don't see. So that's around our processes like whistle blowing which enables employees of revenue to raise concerns in a confidential manner if they need to. In addition, we look after processes such as conflicts of interest or gifts and entertainment and anti-proibing corruption. And so really what we're looking to do is protect the firm, protect our customers and protect our shareholders overall. - Makes sense, yes. And how do you manage it in your position as head of regulatory compliance at Revolut? - So I think really for us, it's just understanding the different risks across the different entities to which we operate and really just getting an understanding of how are we performing? We've all of the different products and services that we offer in all of the different markets that we offer those products and services in. So I think the key to that success really is the great collaboration of our regulatory compliance teams. - Speaking of teams, I've worked with other revoluters who are part of RNC but it stands for risk and compliance. So what's the difference between risk and compliance and regulatory compliance? - Generally speaking at the highest level, if you look at any kind of risk, documentation or books or methodologies, there's a principle that's described as an enterprise risk management framework. And that really says, let's think about all the different types of risks you can come across. So there might be operational risk for all risk, financial crime risk, there could be regulatory compliance risk, conduct risk and so on. And so within the second line of defense, which is the line I operate within, we look after a number of different risks and disciplines as a team. So when we say risk and compliance or regulatory compliance or financial crime compliance, what we're talking about is a different taxonomy of risk that we're thinking about. So just think of it as a different type of risk and we have different subject matter experts leading those functions across revenue. - We want to make sure that we are building a company on safe footing. - That's absolutely right, Alex. Effectively, any risk that revenue might face that may impact our customers or us as a firm, we want to make sure that we've got the right experts looking at those risks and thinking about how we can mitigate them. - And beyond the fintech sector, what can other professionals learn from your role in regulatory compliance to ensure that their operations align with that customer trust that they're trying to build? - If I think specifically about revenue, we have varying values and those are about dream team, think deeper and never settle. And for us, I think it's important that regulatory compliance operates as a supporting service to the business, responding to challenges, and working effectively to almost problem solve the different issues that we may encounter. So I would say for anybody who's looking at regulatory compliance from the outside or anybody in another firm or another industry, it's really how you ensure that you're supporting the business to meet your subjectives. And then really being honest about the occasions where things cannot be done because of the risks that we pose to the firm or customers. - And what happens in those situations where sometimes we have these great ideas that we want to roll out, but they're limited because of potential risks, what can you say to that? - I think that really comes down to what we're trying to do and why we're trying to do it. So if we're trying to create a product and we think that actually it's going to provide our customers with a great outcome and maybe just the regulation hasn't caught up with what we're trying to do, we need to figure out then how do we ensure that we're still delivering a good outcome to our customers whilst meeting the intent or the spirit of any regulation that may sit across the top of that. When it comes to then any potential risks, it's really just documenting and understanding the trade off for those risks. So in reality, what that might mean is that we want to make sure we're not going to impact any of our regulatory relationships, our customer relationships or any considerations we may have with any third parties that provide us any sort of services to provide the great products that we have with in revenue. So it's really just understanding that trade off and making a balanced approach as a result. - Yeah, that makes sense, of course. And we have over 45 million customers around the world. So how do you protect so many people? - Great question Alex. And the reality is we have a suite of controls, measures, and in-house developed technologies that help us safeguard customer accounts no matter where they are in the world. - As someone who travels, I want to be able to use my account and know that my account is safe. - Yeah, absolutely Alex. And I think that's exactly why it's important that we have these measures and controls in place to ensure that the products and services our customers use, help provide them with best in-class service and that they've got a great product that really operates as they hope it will do, aware of their traveling or their home paying their bills or whether or not they're setting money aside for a rainy day. So yeah, incredibly important. - And what could customers do or anyone really to make sure that they're informed and that their security is being looked after? - I think there's a number of different educational tips and tools available through revenue and they can help a customer do just that. So whether that's FAQs, if we can ask questions or blog posts and we have a lot of information available within the app itself, it's really just brushing up and educating on what other products and services the revenue offers. How can that help meet my needs? It's also been taking an opportunity to look in the market and seeing how revenue may compare to competitors. So say, for example, you're a customer who likes to do a lot of foreign exchange or traveling and spending money abroad, you can use comparison sites and cost tools to see the difference of the products that we offer and how often actually we can be our competitors as it comes to rate availability. And as a result, not only be cheaper and more affordable and offer good price and fair value, but also provide a really great seamless product that sort of blends customer experience and risk mitigation all at the same time. So it really important, I would say, for customers to just take a moment to research, look at all of the available information and pick products and services that really do meet their needs and just read all of the information available to them to help them do that. And we can apply that principle to anything, right? Be informed, read the reviews, shop around, and find the best thing that works for you and for your needs. When it comes to financial services, it's really important that customers take the opportunity to read through and understand that those products and services available to them. So it's a revolutionary product and services differ across the varying markets to which we operate. I'd really encourage customers to have a look at those different products and services, really understand them, understand the benefits they can provide, how they can meet a customer's needs. But then understand if there's any risks attached to those particular products and just make sure that customers are informed and have an understanding of what those risks might be and then make an informed decision about whether or not to use it. Stay informed. Exactly that spot on. Well, we're going to take a quick break and we'll be right back with more insider views. This podcast is brought to you by Revolut Ultra. Enter a world of exclusivity with the ultra plan from Revolut, from world-class travel to supercharged savings. Ultra is your ultimate Revolut experience. Ultra is only available in the UK in the European Economic Area, terms and subscription piece applied. And we're back on the Revolut Insider Podcast with Dan Watkins, head of Railitering Compliance. How are you having a good time so far? It's great, thank you so much for having me here. You know, I didn't ask you how you got your start and how you found yourself at Revolut. Can you share a little bit about yourself? Yeah, of course. So I've been at Revolut now for three and a half years and I used to work for a larger firm in the UK and other financial services provider. And it was just at the height of COVID where Revolut had approached me and was looking for somebody to help build out compliance services, specifically as it related to payments and payment-related regulation. And I was really looking for that kind of disruptor spirit, that challenger mindset that comes with a FinTech and Revolut being as big as it is and as having such a great name as it has, was a fantastic opportunity that couldn't be missed. And so I've really enjoyed working here in the sense of our people are fantastic. That's why we have that dream team value really important that we have sort of a collaborative network of people all across the globe working together to deliver great products and services but also really thinking about our customers as well and our firm as a result. And so working for Revolut for me has been that perfect blend of problem solving and working with great individuals to really provide great products and services for our customers. I think that's really interesting that you mentioned problem solving. And I think for me, I look for that need to be creative and problem solving is a great way to express that. And I feel like finding solutions makes you feel excited to come into work and figure out these problems. I find that because Revolut's looking to always be bold, never set to when it's really trying to push and make sure that it's delivering really good best in class service and features to our customers, there's always a new opportunity for us to think about new market and new product and new territory or a new offering that really pushes you as an individual and as an employee to think about the different ways we can think of regulations or customers or the problems we're trying to solve because ultimately we just want to provide the best product we possibly can to our customers. And outside of work, can you tell me something interesting about yourself, a fun fact? Yeah, of course, from a tool. When I was younger, I was in a fitness motivation video in the early '90s for a well-known UK fitness motivator video. I'm picturing neon and spandex. It's not too far from that, it has been pretty close. And I actually used to own a business before I got into financial services. So I used to own a motor repair car vehicle firm and I used to run that company with my father, really enjoyed running my own business, but actually what I really wanted to get into is understanding a little bit more of the financial services landscape. And I think that's just because I do banking like anybody does, I'm sure. So I really wanted to understand that world in a little bit more detail. How did you make that jump? When I left the company that I owned, I really just worked my way up. So my first job was actually like an entry-level job within financial services. I was opening savings products for customers. And then after that, I moved into selling mortgages, which was completely different changing from then on after the rest is history. Was it hard to leave the business that you started? Yeah, it was. I must admit, it's quite interesting being your own boss and running a firm and having all of the responsibility that comes with that. And I really did miss passing up on that opportunity, but actually in hindsight, to get to where I am today, I really enjoyed the learning experience that that provided me with. And there's experiences I've subsequently had going through the financial services as a result. I think that Entrepreneurial Spirit is not something that we easily let go of. So I think maybe finding yourself at Revolut and having this ownership of helping to build things from the ground up might speak to that Entrepreneurial Spirit. Yeah, no, I agree with you. I think that's one thing that I've really loved about working at Revolut and what's kept me wanting to stay here for as long as I have is just that you get the opportunity to really take and own work and really deliver on that and shape it as you see fit. So you're not constrained to standard ways of working or this is how we've done things. So this is how we must always do things. There's always opportunity to really shape and mold what you can design and create. And I think exactly to your point, Alex, that helps speak to that part of people that may want to say, well, I think I've got a really good idea and I want to deliver on that idea and I want to have people listen to what I think is a good idea, hopefully. And sometimes they work and sometimes they don't, but yeah, you're absolutely right. That's what's really sort of spoken to me here as a result. And what's a typical day look like for the head of regulatory compliance? So it might be around an engagement with having the regulator, so we might want to talk them through a product or a service that we're currently offering or intending to offer. We might be responding to an incident that we've had so something may have happened, something may have gone wrong and intentionally with one of our products or services or something else that's meant that we need to look into understanding all the facts of what's happened and how we can put any concerns to rest. It may also then be looking at upcoming regulatory change and understanding what we might need to change internally as a result, so understanding and processing that change. We also need to make sure that we're spending time informing our board and all of our senior leaders on various developments, as it relates to regulatory compliance and how we're providing good outcomes for customers. So it's really multifaceted. I spend a lot of time obviously speaking to individuals that are in the regulatory compliance function, making sure they're supported, nurtured and then we're growing the great talent that we do have here in Revelation. So that's another part of my role that I really do enjoy. It's just so multifaceted and no one week is the same as the next. It's really diverse. - That's great. And as a global company, you know, we're in Brazil, New Zealand, Japan, how do you coordinate regulatory controls across different markets like that? - That's a great question. We essentially set our minimum standards here within our headquarters, and that might be the framework of how we ensure we're mitigating risk and any concerns in a standardized way, but we need to appreciate and understand that no one country is the same as another and so we always look to then tailor those controls or those standards within each entity. So what that really means is a collaborative spirit and engagement between ourselves here in the headquarters versus our local experts and our great interested teams to make sure that we're considering that kind of gold plated dynamic that we describe, which is really here's our minimum operating standard. But then also how do we just sort of bout embrace that in the local territories to make sure we're covering for any local nuances? - When it comes to the FinTech industry, what are some challenges you've encountered or lessons you might have learned along the way? - Considering that we try to think deeper and we try to problem solve as a firm, I think it's often important that we take certain considerations really as far as we possibly can. So without sort of saying no straight away, how can we really explore is this a good idea? Does it provide a really good outcome for our customers? Does it make sense for us as a firm? Is it part of our strategy? Could people really buy into that idea? And if the answer to all of those things is yes, then it's really important that we get to the bottom of understanding can we actually do those things? And if we can, I think then at least we know we've exhausted all routes possible to us. And so I think the biggest lesson to learn for me really is always being don't say no just from the start just because it might be a little bit strange or a bit uncomfortable at least take the courage to explore it to kind of the furthest degree you possibly can. And then when you realize perhaps actually no, we've really exhausted that avenue and it can't be done, you're satisfied there's no stone left unturned. - A lesson applicable for many situations actually. - Yeah, exactly that, exactly that. - Any moments of achievements you've had during your time at Revoluta, you're proud of? - Yeah, definitely so. I would say some of the great milestones or some of the great achievements from my perspective have been expanding into some of the new territories. So if I even think back to when I joined three and a half years ago some of the branches that we know offer in the European economic area weren't there and we've expanded a lot into Latin America as of late which you can see in the news, which is superb. Personally for me, I've really enjoyed working with a diverse team and I find it really, really engaging to understand the new people who've been able to join Revoluta and how they've really quickly adapted to us and our culture and our firm and really felt like they've been part of our people for the longest time. Sometimes I look back and think we've had people here for one or two years and think that's not really a long time but that is a long time. - It is. - People really quickly get used to joining the firm and really add value sort of very, very quickly as a result. For me, it's really great when we're able to bring in fantastic new diverse people into our regulatory compliance function. - And you mentioned our culture, I think speaking to that and to new Revolutaers who are joining, I think the fact that we have our core values outlined and they're so defined really helps incorporate people into the environment. It helps us take part into what we're trying to build and take ownership. I think that just solidifies your presence here. - No, you're absolutely right Alex. I found that just speaking to people through our interview process, gauging their questions as they understand kind of how does Revolut work? What are we about? What's our process? And when they join, they're really happy to understand that the interview process was really honest with them and they were really honest with us. And that when they have joined, they've only gone on to thrive and have a really successful time here. So to me, our people are really, really important, Alex. And it's been great to have so many great people join us. - Do you have the go-to Revolut value that represents you and the work you do? - The one that speaks to me the most is dream team. I think we wouldn't be able to do what we do here without our fantastic team. And so as a result, being radically honest with one another, pushing one another, thinking about the strengths and how we can support one another has been really, really vital for me. - Do you have any advice for individuals who might be looking to explore a career in regulatory compliance? I think while certain things can be sort of basic principles, Alex, like having an understanding of regulations or how they might apply to a firm, like Revolut, my best advice really is, don't be afraid to take the spirit of those requirements or just take that kind of problem-solving spirit that you might have. And really thinking about how you can apply that within this field, if you like. I think it's really important that candidates don't be afraid or scared just because, maybe they think they're not kind of the best expert or they've not got the right technical skill set. Technical skill sets are important, but I think what's more important is demonstrating a willingness to learn and really wanting to understand ways in which we can provide good products and services to customers and really sort of digging deep into the different things that may apply to that as a result. - Definitely, yeah, any advice for those who already are in regulatory compliance? - Yeah, I would say if somebody's working within regulatory compliance perhaps for another firm, and they're really looking for a step up in the challenge from the industry or the way in which they operate in terms of their working sort of day to day lives. If they're finding that perhaps the work is a little less exciting or perhaps a little bit boring, I mean, let's be honest, compliance isn't the most exciting subject in the world, but I think coming to Revolute it gives you an opportunity to really apply and test your skills in a completely different environment than anywhere else. And I mean that in a really positive way, because Revolute's really pushing boundaries in different directions, you really get to flex your kind of interpretive and creative muscles if you like. So I'd really encourage anybody who has kind of an understanding of risk or compliance or international services or understands another bench street, but perhaps but knows risk and compliance to have an explorer of our careers page. We're always looking for great people and transferable skills are definitely there. So anybody who's interested and take a look at our web pages to see if anything's of interest in it, they want to reach out and have conversations where really encourage them to do so. - Great, and I think you can find information on a careers page at www.revolute.com/careers. - Start on Alex. - And as we conclude today, then reflecting on our conversation, what advice would you give to yourself when you were just starting out in your career? - Yeah, advice I'd give myself, Alex, is that problem solving spirit? Don't forget it. It's really important to sort of dig down and drill deep into different problems that you may face, 'cause that applies not only personally, but professionally to. - This is it. In the past, I've sometimes felt a little bit shy or a little bit nervous or worried to really explore the possibilities or default setting of playing it safe and saying, no, that just can't be done. Whereas instead, I think I'd really encourage myself now to think outside the box and think about different solutions and think about the different options available to us as a result. - I love that. Thank you so much for being here. It's been really insightful and I really appreciate you taking the time to come and share your knowledge about regulatory compliance with us. - I know you're more than welcome. Thank you so much for having me. Alex, it's been a pleasure. - Thanks again. This has been the Revolut Insider Podcast. Feel free to subscribe and you can follow us on LinkedIn and on Instagram at Revolut Insider. Thanks for tuning in to the Revolut Insider Podcast where we explore Revolut's rocket ship from the inside out. Until next time, remember, this guy's not the limit. It's just the beginning. Revolut, change the way you money.