The Bancorp’s Director of AML Santions Risk Management Pawneet Abramowski, sits with PaymentEye’s Senior Fintech Reporter, Sarah Gill, to reflect on the current regulatory environment and offers advice for payments entrepreneurs.
Sarah Gill, Reporter: So, I am joined this morning by Pawneet Abramowski, Director of AML and Sanctions Risk Management. Welcome.
And I guess, you know, the nature of what you're dealing with is fraud is becoming more sophisticated all the time. How do you make sure that Bancorp always stays one step ahead?
Pawneet Abramowski: I-- well, I read a lot. I have to keep up with a lot of different news, and a lot of information, and it's really time to think out of the box.
Bancorp is not the typical type of company. It's definitely a bank, but it's also forward looking. It's looking at innovative different types of products and services. So, I have to be able to think about how I fit the risk management framework into that forward-looking vision that we have.
Sarah Gill, Reporter: Absolutely. And I guess a lot of the, you know, startup people exhibiting here on the floor over the next few days are trying to do just that, balance innovation with compliance and regulation.
I mean, is there any advice you have for entrepreneurs just sort of starting out on that journey?
Pawneet Abramowski: Well, the advice that I would have is make sure you do your research. Like, I had a panel yesterday, and I said the same thing, that you have to really think about your research and development. You have to pay attention to that, and you have to pay attention to your legal counsel, giving you advice on how your products and services will be able to fit into the existing structure, because the existing regulatory structure is not changing any time soon.
So, you have to pace your product development, and your innovative thoughts into that, and certainly, I think, the consumer is looking for new and improved ways to use payments and financial services. So, I think it will be a balancing act for any new entrepreneur that's coming out that, you know, you want to be forward thinking, but at the same time, make sure you think about risk management.
Sarah Gill, Reporter: And, you know, obviously regulation is a necessary evil, maybe, in Fintech. But, I mean, do you feel like it's kind of holding back innovation in emerging technologies like maybe (inaudible) or mobile?
Pawneet Abramowski: I think-- well, it is cautious. The regulatory framework is cautious, and I think the regulators have to be cautious from that standpoint.
If they start regulating too soon, that's a problem, right? You're stifling innovation. They have to watch how it evolves and changes and what are some of the risks. So, as the young, you know, innovators are coming out with new ideas, the bad guys are standing behind and trying to figure out how we can-- how they can exploit it.
So, the regulators are watching kind of the dynamics of how that plays out, and really, where is the vulnerability in that particular new product, and how is it that they need to have more over sight and more control over what needs to happen in that product.
Blockchain, I think, is-- it's an interesting phenomena. I think it's really bringing to light, you know, something from over a decade that people have been trying to work in it, in that thought process, and really bring to, I think, revolutionize where payments have been, you know, from the last decade.
So, I think it will be a wait and see, and the regulators are really trying to be very controlled in how much they regulate, for example, blockchain.
Sarah Gill, Reporter: Right, sure. And then, obviously, you need to kind of protect your end customers, but do you think there should be more kind of collaboration across industry? But, you know, do you need to put aside some rivalries to an extent to (inaudible)?
Pawneet Abramowski: I will definitely say that I'm a big supporter of cross-- you know, cross-conversation across the industry.
Look, I understand that we-- we're in a competitive market, capitalistic society warrants that.
But at the same time, if there was more dialogue and more kind of collaboration, it would help. And from the risk management standpoint, I don't think there is any harm in talking to your peers, even your competitors, because you are benchmarking against. That's how I look at it, but you need to benchmark your thoughts, your framework, and how you present to the regulators.
Sarah Gill, Reporter: I mean, is it kind of-- can it be a bit frustrating, sort of trying to (inaudible) you want to innovate with kind of the necessary kind of keeping up with regulation?
Pawneet Abramowski: Yeah, it definitely is. You know, you have to-- you have to really be up on what's going in the marketplace, and what the demand is, and, also, what you need to balance your regulatory-- prudential regulators, you know, thoughts about your institution.
So, I think that-- that is the challenging part, to balance the regulatory expectation and the business growth, and you have to really-- I really have to have a good conversation with the business, and sometimes it is, you know, a definite no when I'm trying to give them guidance, and sometimes it's a maybe, and we meet halfway and come up with a good solution, and it's all about being transparent about how much the business is willing to share with you, and how much you're willing to go the way of further business.
Sarah Gill, Reporter: And is there kind of one thing that you feel would move the industry forward king of significantly in terms of regulation that you'd like to see, maybe from your peers across the space?
Pawneet Abramowski: I think more dialogue with the regulators, keeping them informed bout what's going on., and making sure that they're aware of the different types of products and services. I think when they have a lack of understanding, so, what you don't know, you're scared of. So, of course, you-- you know, you treat it in a manner that would be, you know, kind of a step away.
So, I think that has to increase, and I think the industry is doing a really good job of trying to talk to the different regulatory bodies, and really educate them, and that's a good sign.
The opinions, findings, or perspectives expressed in this content are those of the participants and do not reflect the official policy or position of The Bancorp, Inc., its affiliates, or its or their employees.