The UX-compliance dance: A blueprint for crypto’s success | Opinion

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As an analyst with over a decade of experience in the tech industry and a deep understanding of the crypto landscape, I wholeheartedly agree with Bam Azizi’s insights on the importance of compliance in product development. His vision for proactive compliance is particularly compelling, as it aligns with my belief that anticipating regulatory changes can lead to more efficient and user-friendly solutions.

More and more programmers and businesses are now prioritizing enhancing user interaction within cryptocurrency. This is wonderful news since it means the era of repeatedly copying lengthy number sequences, memorizing numerous seed phrases, and battling high transaction fees may soon come to an end. A smooth and user-friendly interface will attract a much broader audience, boosting engagement and ultimately promoting widespread use. However, it’s important to note that user experience (UX) is often treated as an isolated aspect, without considering other crucial elements in the product development process and potential adjustments required for future needs.

Regulatory compliance stands out as one of these key factors since it can be fairly complex to understand for UX designers, product managers, and developers. As the overall UX gets better with wallets, protocols, and platforms, one of the last big hurdles is compliance, which is still not taken into consideration enough.

Compliance is here to stay

The crypto industry is now subject to increased regulation by governments globally, aiming to combat financial crimes. As the world continues to change, businesses must adjust to these new financial regulations that demand substantial resources, similar to how the traditional finance sector had to adapt in response to the 9/11 terrorist attacks.

As an analyst, I often find myself reflecting on the cumbersome onboarding experiences that necessitate repeated ID verifications and data disclosures. Although the regulatory objectives behind these practices are clear, they undeniably pose significant challenges for the end user, affecting both usability and privacy.

Over the last ten years, a thought that has consistently crossed my mind is whether these companies intentionally make the experience so difficult for the customer. However, I’ve come to realize that this isn’t always the truth. Here’s my take on the matter.

The old and the new way of doing things

During the early phases of project development, creators often overlook regulations when designing an app or protocol. Instead, they incorporate necessary compliance measures into the process once the product is nearly complete. This approach, which may be seen as reactive, typically occurs after consulting with a specialist and necessitates frequent adjustments whenever rules are altered. While reactive compliance might not pose significant issues for large corporations like banks, it can be especially challenging for smaller initiatives such as cryptocurrency startups.

Rather than reacting to regulatory requirements after they’ve been imposed, I’ve been encouraging crypto companies to take a forward-thinking stance. This means integrating compliance aspects into the very foundation of their product development. Unlike traditional approaches that wait for regulations to be set before making changes, this strategy involves anticipating regulators’ actions and adjusting product designs accordingly, even if the specifics of future rules aren’t known in advance. In essence, it’s about being adaptable to potential regulatory shifts.

Leaving behind traditional inefficiencies

It’s essential to grasp this point regarding user experience (UX). The prolonged lack of fundamental changes in banking products is the main cause behind the current complexity and difficulty associated with compliance procedures.

The current state of disarray within the industry makes it clear that we may be stuck with a system mirroring the inefficiencies of traditional finance – but if crypto businesses could simply communicate more effectively, it would unlock numerous possibilities, not just for regulatory compliance, but also for enhancing user experience. Effective data sharing is seen as a key strategy for virtual asset service providers to adhere to Europe‘s EBA Travel Rule Guidelines, which require the transmission of specific information alongside transfers of funds or crypto assets.

Although cryptocurrencies are inherently decentralized and free from traditional permissions, businesses operating within this field may face numerous regulatory hurdles that could potentially degrade user experience over time. To prevent replicating the regulatory bottlenecks experienced by the banking sector, it’s crucial for the crypto industry to prioritize compliance and integrate it into their product development strategies. This emphasis on combining user experience (UX) with compliance is a perfect match for the crypto world.

Bam Azizi

As a pioneering researcher in the tech industry, I, Bam Azizi, am the co-founder and CEO of the innovative company, Mesh. My professional journey has been dedicated to crafting advanced technological solutions that reshape our digital experiences. Prior to this, I established NoPassword, a cybersecurity and identity firm, which was acquired by LogMeIn in 2019. Today, prominent financial institutions continue to utilize the integrations and identity services I developed during my tenure at NoPassword. In 2020, I embarked on a new venture with Mesh, aiming to construct a novel financial system that harnesses technology and digital assets to empower users with enhanced freedom and control. Under my guidance, the Mesh team is offering fintech companies a hassle-free, secure one-click system for users to effortlessly transfer their assets for deposit, payments, and payouts. Our APIs are accessible across hundreds of exchanges and platforms.

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2024-10-30 14:15