Background: In the burgeoning crypto finance sector, our US-based B2B crypto bank client embarked on a journey towards obtaining the OCC (Office of the Comptroller of the Currency) charter. To align with the stringent requirements, a comprehensive policy framework encompassing multiple domains—from board management to records management—needed to be conceived and implemented, fostering a secure, compliant, and efficient operational backdrop.
Challenge: The central challenge lay in developing and integrating policies across many sectors that not only met regulatory requirements but also paved the way for innovative and secure banking services. The multifaceted endeavour required a deep dive into each policy category, understanding unique requirements, and configuring policies synergistically.
Approach: The strategy encompassed thorough policy development in the following categories:
- Board: Streamlined guidelines for board members focusing on corporate governance, ethical conduct, and strategic oversight.
- Business and Product: Policies fostering innovation while adhering to regulatory compliance, incorporating risk assessment in product development, and ensuring sustainable business growth.
- Client/Fiduciary: Established protocols safeguarding client assets, ensuring transparency, and fostering trust through diligent fiduciary services.
- Compliance and BSA (Bank Secrecy Act): Developed stringent compliance mechanisms, emphasizing anti-money laundering (AML), and combating the financing of terrorism (CFT) strategies.
- Finance: Implemented financial frameworks focusing on transparency, fiscal responsibility, and sound investment strategies aligned with regulatory mandates.
- Information Security: Policies established to safeguard sensitive information through state-of-the-art security infrastructure.
- Information Technology: Structured to ensure seamless technology integration, emphasizing secure and efficient systems.
- Legal: Formulating policies for legal compliance, focusing on adherence to existing laws and preparedness for emerging regulatory landscapes.
- Human Resources: Instituted policies ensuring a diverse, inclusive, collaborative work environment emphasizing continual learning and development.
- Risk: Comprehensive risk management policies focusing on identifying, assessing, and mitigating risks across all operational spheres.
- Strategy: Policies crafted to guide the strategic roadmap, focusing on agility and adaptability to the evolving market dynamics.
- Records Management: Policies delineated to manage organizational records with utmost confidentiality, integrity, and availability, complying with legal and business requirements.
A phased implementation approach was planned, encouraging feedback from various stakeholders, and incorporating valuable insights to fine-tune the policies.
Results:
- Compliance: Fulfilling the complex regulatory requisites for OCC chartering successfully.
- Business Growth: Positioned the business for growth through innovative and compliant business and product policies.
Conclusion: Undertaking a comprehensive approach to policy development, the US-based B2B crypto bank instituted a policy framework across multiple facets of its operation. The case illustrates the power of a holistic policy development strategy in navigating complex regulatory landscapes while supporting a culture of compliance, innovation, and security. This propelled the organization closer to securing the OCC charter. However, the conditional OCC approval was allowed to expire, and the bank’s conversion to a federally chartered bank has not yet occurred.
