I spend more time thinking about compliance than code. It’s the biggest non-technical risk to building a neobank, and it’s the one that keeps me up at night. It’s not about shipping features; it’s about building a fortress, brick by painful brick, that can withstand the shifting sands of regulation.
The newsletters and regulatory updates from the last few months are a stark reminder of this. The environment is not getting easier. For a founder, this isn’t background noise; it’s a primary signal that has to be integrated into your strategy from day one.
The Ground is Moving
The most visible tremor is the CFPB’s war on so-called “junk fees.” They recently finalized a rule to cap overdraft fees at major banks, a move that fundamentally reclassifies overdraft as a credit product subject to the Truth in Lending Act. This isn’t a minor tweak; it’s a reinterpretation of a 50-year-old financial convention.
What does this mean for a builder? It means the regulatory goalposts can and will move. A business model that is profitable today could be regulated into oblivion tomorrow. Relying on fee structures that could be labeled “junk” is like building your house on a seismic fault line.
The Compliance Moat 🏰
For a pre-seed startup, the cost of compliance is terrifying. Estimates put it at 10-15% of total operating expenses, with a Chief Compliance Officer’s salary easily hitting $250k+. For a company that hasn’t raised a cent, that’s a massive hurdle.
But here’s the counter-intuitive part I’m learning to embrace: this cost is a feature, not a bug. It’s the price of admission. The companies that can afford to build a robust compliance function from the start create a powerful competitive advantage. This is the compliance moat.
As this article on the topic argues, a proactive approach to regulation builds trust with partners and customers. It’s a signal to the market that you’re building a durable, resilient company, not a flash in the pan.
This is where our dual-project strategy becomes a critical risk-management tool.
Dentplicity is our glider. It’s a data platform. Its regulatory footprint is light, allowing us to build our brand, perfect our user experience, and establish trust with dental practices without taking on the immense compliance burden of a bank on day one.
CLIN is our 747. It’s the full-stack neobank, and it requires a jet engine of a compliance program. We are building that engine carefully, piece by piece, in the background. The lessons and relationships we build with Dentplicity directly inform the CLIN roadmap, allowing us to build a smarter, more resilient bank when the time comes.
By separating the two, we can move fast where it’s safe to do so, and be meticulously slow and paranoid where it matters most. It’s our way of de-risking the single biggest threat to our long-term vision. We’re building the moat before we even build the castle.
Data sources: Cross River Bank 2025 Newsletters, consumerfinance.gov, various industry analyses on compliance costs.