July 11, 2018
FS Vector: Applying Lessons Learned to Create a New Model for Advisory Services
Nearly five years ago, I left my role with a private bank and joined a startup that was seeking to disrupt financial services and leverage blockchain technology to benefit consumers. That experience gave me a unique perspective on the challenges facing entrepreneurs who are trying to bring positive change to the marketplace.
As a new type of financial technology company, we not only had to deal with the usual tasks associated with any startup venture (governance, fundraising, etc.), but we also had the added challenge of getting a product to market despite having an uncertain regulatory framework. From a compliance perspective, there was a need to build something that could adequately deal with risks that hadn't been assessed before. By leveraging technology, and re-thinking compliance, we were able to mitigate these risks and create a more efficient program.
Generally speaking, financial services firms face a lot of scrutiny. Examiners, investors, bank partners, insurers and audit firms review the adequacy of risk management controls on an ongoing basis. It is important to have strong compliance programs and to proactively engage with regulators, law enforcement and other stakeholders to make sure they fully understand the business models and how an organization deals with the associated risks.
Over the years, I have worked with several lawyers, consultants and audit firms to address regulatory, compliance and financial risks. In many cases, it was difficult to find external resources that had the proper subject matter expertise. Consultants often provide general advice that is not tailored to the business or the task at hand. And, larger firms tend to offer services at an exorbitant cost with little flexibility on the engagement structure.
At FS Vector, we are taking lessons learned from prior experience to alter the traditional model of advisory services. FS Vector was founded to offer practical solutions to clients and allow new ideas in finance to continue to evolve and prosper.
The goals of FS Vector are simple.
First, we want to be a trusted strategic partner with innovative financial services companies of all types and sizes. In order to do so, we will develop a team of individuals with relevant experience who understand these businesses and the related challenges.
Second, we will offer a wide variety of services, which includes everything from high level strategic advice to tactical program management and operational roadmaps. If there are complimentary services we do not provide, we will find the right partner and help manage those relationships for clients as a central point of contact.
Third, we want to be more than an external expense. We will rely less on hourly fees and strive to have flexible engagements based on client's needs. Our goal is to fully integrate with the business, drive efficiencies and allow companies to reach their goals.
Fourth, we will continue the development and re-imagining of compliance through the use of regtech solutions that are suitable for cutting edge companies. This can be achieved through the use of data, machine learning and artificial intelligence tools that will make programs more effective in detecting risks and reduce costs.
Finally, we want to be at the forefront of helping shape public policy. Our goal is to create a collaborative forum that is a catalyst for financial services innovation. We intend to achieve this by organizing industry coalitions that will share information, develop best practices and communicate with key stakeholders. We will also offer training programs, conduct research and organize events to educate and develop ideas on the best path forward.
I am excited for this next chapter and the chance to work with a terrific team at FS Vector as well as entrepreneurs, compliance professionals and others who are making a positive impact on the financial services industry.
John, Co-Founder and CEO