Imagine that a modern bank is a racing car on a competitive track. This car has two critical components.
The first is its powerful engine, equipped with the latest technology. This represents the innovation, digital product, and marketing teams. Their goal is speed, acceleration, and overtaking competitors by offering new, customer-centric services.
The second is its flawless, high-tech braking system. This represents the risk, compliance, and legal departments. Their goal is safety, control, and ensuring that the car does not crash on dangerous turns and finishes the race without any losses.
The problem is that in many banks, these two systems are fighting each other instead of working in harmony. The engine tries to maximize its revs, while the brake instinctively and automatically slows it down, seeing potential danger in any acceleration.
The result? A car that either can’t move from the starting line at all or moves around the track at a turtle’s pace, while small and agile fintech go-karts are running circles around it. This is the central challenge of the modern bank: how to turn constant opposition into synchronized performance.
The Diagnosis: Why is This Conflict Inevitable in the Traditional Model?
This confrontation is not the fault of individuals. It is the result of a system design that has several fundamental causes:
- Two Different Operating Speeds: The world of digital innovation moves in weeks and months (Agile sprints). The world of banking regulation moves in years and decades (laws, directives). Attempting to force these two worlds into the same process creates immense friction.
- A “Culture of No”: Historically, the primary role of a bank’s control functions (risk, compliance, legal) was to prevent bad things from happening. Their natural response is often “no,” because saying “yes” carries personal and institutional risk. They are often referred to as “business prevention departments.”
- Regulation as an Afterthought: In the traditional model, a product is fully designed and sometimes even technically developed before it is presented to the compliance department. A fundamental flaw discovered at this late stage leads to either the project being canceled entirely or to costly rework.
- Lack of a Shared Language: Innovators speak the language of “customer experience,” “MVPs,” and “growth hacking.” Lawyers and compliance officers speak the language of “statutes,” “risk appetite,” and “mitigating controls.” They are often talking past each other.
Regulation as an Accelerator, Not a Brake: Our Model for Safe Innovation
The conflict between regulation and innovation is not a choice that needs to be made. The most successful banks are not those that ignore regulations, but those that have learned to integrate regulation into their innovation process, turning it into a competitive advantage. Our model is based on three core components:
Step 1: “Shifting-Left” on Controls – Integrating Regulatory Functions into Agile Teams
This is the main tactical change. We implement the “Shift-Left” principle, which means that compliance, risk, and security departments are involved from day one, not at the end of the process. We help banks embed representatives from these departments directly into the Agile product development teams (“squads”). This person is not an auditor; they are a full-fledged, collaborative team member. Their job is to help the team build the product correctly from the very beginning, with regulations in mind. They participate in daily meetings and sprint planning. As a result, questions that used to take weeks to resolve are answered in minutes. Risks are identified and mitigated during the design phase, not after the product has already been built.
Step 2: Building an Internal “Regulatory Sandbox” and Automated “Guardrails”
To increase speed, we need to create a safe environment for experimentation. We work with the bank to create an internal “Regulatory Sandbox.” This is a controlled environment where new products can be tested with a small group of real customers under the supervision of the compliance department. This allows the bank to gather real-world data on the product’s risks and user behavior before a full-scale launch. At the same time, we help IT and compliance teams to build automated control mechanisms directly into the development process (DevSecOps). For example, the system can automatically scan new code for known security vulnerabilities or data privacy violations. This frees up compliance officers from routine checks and allows them to focus on more complex, strategic issues.
Step 3: “Translating” Regulations and Creating a Digital Compliance Library
Often, the problem is that developers and product managers do not understand the complex legal language of regulations. We facilitate a process where the compliance department “translates” complex regulations into simple, clear, and actionable rules, or “Compliance Patterns.” For example, instead of citing a 50-page law, the pattern might be: “Personal data of Georgian citizens must be stored in Data Center X with Y-level encryption.” These patterns are collected in a centralized digital library (such as an internal Wiki), which is accessible to all product teams. It becomes a self-service resource. When a team is creating a new feature, they can easily find the “rules of the game” in this library and no longer need to schedule a meeting with the legal department for every minor question.
In Conclusion
The confrontation between compliance and innovation is a false dilemma. In the modern banking world, the winners are not those who bypass regulations, but those who manage to make regulation an organic part of the innovation process and a guarantee of trust. We don’t just give you advice on regulations.
We help you completely overhaul your innovation operating model—embedding controls into your Agile teams, creating a safe environment for experiments, and building systems that make compliance understandable, accessible, and automated. We help you turn your biggest brake into an accelerator.
