Compliance and Innovation to Support Growth

Online Lender Exchange

Objective: Update operational systems to ensure compliance with the requirements of a regulated partner.

Background/Opportunity

  • A market-leading online lender exchange in the U.S. was entering into a new partnership with one of the largest banks. The client is highly visible, making them vulnerable to competitive pressure as well as regulatory scrutiny. Their lender network includes hundreds of members, including large lending institutions, regional lenders, and an increasing number of emerging alternative players. Their new bank partnership was expected to increase prospect referrals and earned income substantially, but also required the client to undergo an especially rigorous and comprehensive vendor due diligence process.

Challenge/s

  • The client was expected to upgrade certain aspects of their compliance program to fulfill the stringent requirements of their prospective bank partner.

InnReg's Solution

  • Conducted compliance assessment.
  • Reviewed and rewrote client’s information security policies and procedures to identify and address any gaps.  
  • Updated processes to close all procedural gaps and codified the new system.

Client Results

  • Successfully completed vendor due diligence and contract negotiations with the new partner.
  • Established an enhanced compliance and operations foundation that supports ongoing growth. As a result, the client was able to process more customer requests, increase their network of lending partners, and expand into new lines of business such as student loans, debt consolidation, and credit counseling.

Testimonial

As we were negotiating a strategic relationship with one of the largest US financial institutions, Francesco stepped in and got us through a major hurdle in the due diligence process. We could have not done it without him.” 

-- Client CFO


InnReg helps innovators succeed in regulated markets. We do not publicly disclose client names in order to protect their confidentiality and their unique business models. We rigorously guard our clients’ intellectual property and competitive advantages. However, we can make references available to prospective clients by request.

Regional Bank

Objective: Develop the business plan for a new wealth and investment management service.

Background/Opportunity

  • The client is a strong and established regional bank in South Florida, the fifth largest financial institution in its state and one of the top 50 most profitable banks in the U.S. The client wished to serve an increasing segment of international and high net worth prospects moving to the region. To tap into this new target audience, the client planned to launch a wealth management advisory service.

Challenge

  • The client wanted help with assessing the market potential for the wealth management business and then designing the optimal operational structure to launch it.

InnReg's Solution

  • InnReg developed a launch strategy leveraging the strong foundation built on the client’s history and longevity coupled with forward-thinking innovation.

Client Results

  • The client has been acquired by a large global bank based in South America. The new management team is leveraging the InnReg business plan as a foundation for the launch strategy for its new wealth management and investment services program.

InnReg helps innovators succeed in regulated markets. We do not publicly disclose client names in order to protect their confidentiality and their unique business models. We rigorously guard our clients’ intellectual property and competitive advantages. However, we can make references available to prospective clients by request.

Trading Education Service

Objective: Help a non-regulated entity prevent inadvertent regulated activity and maintain data security.

Background/Opportunity

  • A provider of tools, education, and community features for investors sought InnReg’s help to build and operate a compliance program supporting the activities on its platforms. Although it does not act as an investment advisor or broker dealer, it needed to ensure that content on the platform did not cross the line into activities that are regulated by the SEC. In addition, it is critical to follow FTC rules and regulations around marketing content publication.

Challenge/s

  • By offering an environment where end-users contribute content and interact with each other, the firm needed to monitor compliance at scale within an active community.
  • The firm needs to tread a careful line avoiding the appearance that content directly offers investment advice or impacts equities markets.
  • The firm also must ensure the security of user data that it manages and maintains.

InnReg's Solution

  • Planned and implemented a fully-outsourced compliance program and manage it on behalf of the client.
  • Provided a one-stop-shop for 1) content and data analytics around user activity, 2) review of content, social media, and advertising in accordance with FTC rules, and 3) data protection and security.

Client Results

  • The client is one of the market-leading companies in its space with a thriving and engaged user community.
  • Risks of inadvertent regulated activity have been mitigated.
  • The client continues to remain on the right side of the line and is able to demonstrate that its activities do not require registering as a regulated entity.
  • The security of user data is managed effectively.

Testimonial

“Operating a business in a highly regulated industry carries risk. InnReg has provided us with an individualized compliance program that they manage and monitor. It's a relief to know that we have expert industry professionals taking care of both our compliance and information security programs. Their services allow us to focus on growing our business and offering a great experience to our users, knowing our compliance program is in good hands.” — Client CEO


InnReg helps innovators succeed in regulated markets. We do not publicly disclose client names in order to protect their confidentiality and their unique business models. We rigorously guard our clients’ intellectual property and competitive advantages. However, we can make references available to prospective clients by request.

ATS

Objective: Help an alternative trading system (ATS) build a technology-based compliance platform to support its unique and disruptive business model.

Background/Opportunity

  • The client came to InnReg looking to develop a sophisticated set of compliance processes and workflows to support a groundbreaking peer-to-peer ATS for retail investors.

Challenge/s

  • An ATS and its broker dealer operator are typically subject to enhanced regulatory scrutiny by their functional regulators, primarily FINRA and the SEC. The many unique components of the ATS’s business model, such as the near-total reliance on operational processes that were based on proprietary algorithms, compounded the frequency and depth of regulatory interactions.  While the broker dealer and ATS had a compliance program in place, the client wanted to upgrade its workflows and processes to optimize its compliance strategy, execute on it efficiently, and satisfy regulatory expectations.

InnReg's Solution

  • Devised and implemented a comprehensive set of compliance processes to accommodate the complexity of the ATS business model.
  • Leveraged fintech compliance expertise and experience in regulatory relations to satisfy regulators’ requirements and expectations.
  • Successfully demonstrated the efficacy of the new compliance processes to three separate regulatory agencies.
  • Advised on process design to ensure compliance with all regulatory guidelines, as well as scalability to accommodate the high volumes of users and transactions in the ATS.   
  • Ongoing delivery of a fully managed, outsourced regulatory compliance solution, including having a licensed professional serve as the Chief Compliance Officer of the broker dealer and ATS.

Client Results

  • The ATS has been able to facilitate a high-volume of retail transactions in a scalable, compliant manner.
  • The ATS has become one of the largest in the US in volume of transactions.
  • The client has begun expansion in foreign markets.

InnReg helps innovators succeed in regulated markets. We do not publicly disclose client names in order to protect their confidentiality and their unique business models. We rigorously guard our clients’ intellectual property and competitive advantages. However, we can make references available to prospective clients by request.

Digital Broker Dealer

Objective: Guide a bank through the processes of setting up and then operating a broker dealer subsidiary for international investors wishing to trade in the United States.

Background/Opportunity

  • The client came to InnReg with a strong business idea, but needed guidance for navigating relevant regulatory regimes, building out its operations, and then supporting its compliance function once it launched.

Challenge/s

  • A publicly-traded foreign bank with an established presence in the U.S. wanted to be able to target retail investors from all over the world to invest in U.S equities. The client came to InnReg to seek in-depth, detailed knowledge on how to establish a compliant brokerage operation with a global footprint.

InnReg's Solution

  • Conceptualization of the bank’s broker dealer compliance model for international investors.
  • Leveraged compliance expertise and experience in regulatory relations to manage regulatory exams and inquiries.
  • Devised and implemented a comprehensive set of compliance processes.
  • Advised on process design to ensure compliance with all regulatory requirements for international investors participating in U.S. markets.

Client Results

  • Successful launch and growth of the broker dealer’s international business.
  • Positive outcomes of regulatory exams.
  • Efficient compliance processes and workflows to maximize internal resources.

InnReg helps innovators succeed in regulated markets. We do not publicly disclose client names in order to protect their confidentiality and their unique business models. We rigorously guard our clients’ intellectual property and competitive advantages. However, we can make references available to prospective clients by request.

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