Is a compliance “Siri” out there?

Strip away the alphabet soup of regulations, and step behind the scenes of the massive industry-regulator compliance edifice, and what do you have?

The desire for the typical consumer to get a square deal. To give them financial services with something more to go on than “caveat emptor.”

Jo Ann Barefoot’s career has been devoted to compliance, from time as a regulator through several incarnations as a consultant, and, as well, a consumerist of sorts. In the course of researching a book about consumer protection and the financial crisis, and in surveying the growing role of disruptive technology in financial services, Barefoot draws two conclusions:

1. The job remains unfinished. For all the massive regulatory burdens on banking, and the money spent on them, and the volumes of disclosure documents dumped on customers, many consumers still got hurt. She gives the whole regulatory/compliance effort “a C+, at best.”

2. Rethink the tools in today’s framework. Increasingly, instead of seeking ways to impose compliance on disruptive new technology, “I felt that much of the solutions lay in the technology.”

Too much effort currently goes into using new technology to automate existing processes, says Barefoot. She thinks more time should be put into using technology to produce processes that are friendlier to consumers.

“The industry is trying to become more consumer centric,” Barefoot explains, “but it is still too product centric.”

Barefoot says that the regulatory burden makes innovation and customer communication difficult. “The industry is really struggling to be able to provide clarity and clear choices to consumers,” she explains.

The result: Products loaded with aspects consumers just don’t understand.

The solution, says Barefoot: “The mobile revolution will be the catalyst that will get new things moving.”

The voice that gives financial comfort

Barefoot sees the instant availability of mobile financial tools, including personal financial management apps; increasingly sophisticated behavioral science; big data; artificial intelligence; and natural language interface—think “Siri” with a financial degree—will enable banks to turn the compliance page.

Perhaps literally. That is, no more “page.”

One element of this will be putting financial literacy into the mobile device. Barefoot believes customers will be more engaged when financial literacy assistance is presented as needed, in the moment, rather than in courses given long before the need that most consumers find boring and that they avail themselves of sporadically.

A taste of the future, Barefoot says, may be seen in a company called Kenscho, backed by Goldman Sachs and Google Ventures. Founded out of MIT and Harvard, Kenscho has developed technology that allows computers to answer millions of investor questions. The technology has been likened to a Siri for investors, analysts, and traders.

Barefoot adds with a chuckle that another model might be along the lines of Carrot Fit, a mobile app described as “Your judgmental fitness overlord,” which insults users to drive them to better fitness.