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Key to a Successful Travel Rule Program: A Gradual Rollout

Abi Bryant Spolar
Abi Bryant Spolar
August 21, 2023
Expert Customer Success leader, skilled in building customer relationships, developing success strategies, and guiding growth in innovative industries.

SAFE Implementation: The Importance of a Phased Implementation when Rolling out a Travel Rule Program

As the Global Head of Customer Success at Notabene, I regularly consult with Compliance leaders at the start of their Travel Rule implementation journey. 

While many understand the importance of complying with the Travel Rule, they often feel overwhelmed regarding how to get started, especially during the sunrise period and when dealing with multiple jurisdictions or areas needing more regulatory clarity. The technical work for a successful integration only compounds these concerns.

In this article, I'll explore the top Travel Rule compliance challenges experienced by the Compliance Officers I have worked with, explain why Notabene devised the SAFE Implementation phases, and present the advantages of the adoption program based on commentary directly from VASPs. 

Understanding the Technical Challenges of Travel Rule Implementation

Many VASPs find it challenging to comprehend the extent of technical work required for integration. They also struggle to figure out how they can effectively collaborate with stakeholders from various departments in their business to ensure that the Travel Rule solution is implemented successfully.

As VASPs progress through the implementation, they often find it beneficial to opt for API integration to automate their Travel Rule processes instead of hiring additional teammates to manually carry out Travel Rule compliance checks. However, Without having insight into the specific actions the technical team needs to complete or alignment between how the implementation might look based on a VASPs risk appetite,  Compliance leaders are often at a loss for where to begin to ensure they are meeting regulatory deadlines. 

Figure 1: Key finding #4 from Notabene’s 2023 State of Crypto Travel Rule Compliance Report.  

Notabene's 2023 State of Crypto Travel Rule Compliance Report affirms this, with 27% of VASPs and 45% of Financial institutions citing 'a lack of technical resources’ as their main obstacle to adoption.

SAFE Implementation: A Guided Approach to Travel Rule Compliance

"The secret of getting ahead is getting started. The secret of getting started is breaking your complex overwhelming tasks into small manageable tasks and then starting on the first one." - Mark Twain

With these challenges in mind, we recently launched the SAFE Implementation phases. This step-by-step onboarding program is designed to help our clients navigate the intricacies of Travel Rule compliance efficiently while ensuring seamless collaboration between compliance and technical teams.

SAFE Implementation delivers a well-structured, step-by-step approach to achieving compliance, streamlining operational risk management, and providing valuable analytics to steer our customers through their Travel Rule implementation. By making subtle technical modifications, VASPs can effortlessly link their internal systems to Notabene, enabling the generation of proprietary data.

This rich data resource furnishes invaluable insights into the potential impact of compliance on existing transaction flows, equipping VASPs with the foresight to plan the initiation and response to transactions strategically. Additionally, this information empowers them with a clear roadmap for their journey toward achieving full compliance.

How does SAFE Implementation support VASPs?

  1. Step-by-Step Implementation and Testing: SAFE Implementation enables customers to gradually integrate the necessary technical infrastructure, validate data accuracy, and test functionality, all before they impact their end users. By breaking down the implementation process into manageable stages, customers can identify and address issues early, ensuring a smoother transition and reducing non-compliance risk.
  1. Navigate Complex Regulatory Requirements: Compliance with the Travel Rule requires significant technical, operational, and procedural adjustments. By adopting a phased implementation approach, we ensure that our customers have adequate time and support to comprehend the requirements and implications of the Travel Rule fully. Notabene’s SafeTransact product manages each Jurisdictional data requirement, supporting VASPs in understanding what data they must provide to comply in their region. It also ensures that VASPs can handle the requirements of their counterparty's jurisdictions. 
  1. Tailored Solutions for Diverse Customer Needs: Every business has unique operational models, technical capabilities, and customer bases. By utilizing our SAFE Implementation process, VASPs can design and implement tailored solutions based on their specific requirements. This ensures a more seamless integration of Travel Rule compliance processes into VASPs' existing systems, minimizing disruptions to their day-to-day operations.

  2. Guidance and Training from the Customer Success team:  Successfully implementing the Travel Rule requires technical integration, adequate coaching, and ongoing support. VASPs can also choose to add a Customer Success Package, ensuring that they get custom training and white glove support from our team of subject matter experts. The Notabene Customer Success team is on hand through each milestone to provide comprehensive training sessions, resources, and dedicated customer support throughout the implementation journey. This empowers our customers to develop an in-depth understanding of the Travel Rule requirements and equips them with the necessary knowledge and skills to maintain compliance in the long term.

  3. Compliance Readiness and Regulatory Confidence: By adopting a phased onboarding approach, our customers can demonstrate their commitment to regulatory compliance with relevant authorities. This proactive approach ensures adherence to the Travel Rule, helps build trust with regulators, and enhances the reputation of the crypto business. Furthermore, early compliance readiness positions our customers favorably in the rapidly evolving regulatory landscape, reducing the risk of potential penalties or disruptions to their operations.

Far from being a mere regulatory checklist, achieving Travel Rule compliance involves understanding the regulatory landscape, strategic planning, and data-informed pre-transaction decision-making, all facilitated through our SAFE Implementation approach.

Notabene's SAFE Implementation program is not just a tool—it's a strategic ally that guides VASPs through the intricate terrain of crypto regulation. With the aid of crucial data and a tailored approach, VASPs can execute their compliance plans with heightened precision and assurance. This seamless and effective integration results in regulatory adherence and fosters trust with regulators, strengthening the business's reputation. 

The rest of Notabene’s Customer Success team and I are dedicated to helping our customers turn regulatory compliance from a daunting challenge into a competitive advantage, effectively driving the future of the crypto industry.

This setup provides a systematic, step-by-step roadmap to ensure synchrony between technical and compliance teams, transforming an overwhelming task into achievable milestones.