Webit: Confessions of the Department of No:why compliance is your fastest path to trusted innovation

In this keynote, Anton Petrov, chief compliance officer of First Investment Bank, discusses the evolving nature of compliance in the context of rapid technological advancement, particularly in the banking and AI sectors. He traces the progression from compliance 1.0, rooted in personal reputation, to compliance 3.0, characterized by complex global regulations designed to combat financial crime. Petrov highlights the challenges organizations face today, as the speed of product development outpaces regulatory frameworks. He advocates for a shift in mindset, proposing that compliance should be integrated into the design phase of products rather than treated as a post-launch hurdle. Emphasizing the importance of trust as a competitive advantage, he suggests that a culture of compliance can accelerate innovation and foster stronger institutional trust, ultimately leading to better business outcomes.

Ladies and gentlemen, innovation gets the headlines. Trust earns the future. And few people understand this better than our next speaker. For years, he has helped navigate one of the most demanding environments in business where innovation, regulation, risk, and responsibility must move forward together. Today, he brings a perspective that every leader in this room needs to hear because the organizations that will succeed in the AI era will

not simply be the fastest. They will be the ones people trust. Please join me in giving a warm Webbit welcome to Anton Petrov, chief compliance officer and board member of First Investment Bank with his keynote confessions of the department of no why compliance is your fastest path to trusted innovation. Hello everyone. Let me take you back not far just to the beginning of something we all use

every day without thinking too much about it as Mr. Baron just called it the necessary evil. So banking banking well banking began with a handshake and yes this image was created using AI. Imagine emergent informance letter of credit family name as collateral. No contract no regulator certainly no compliance department just reputation and the very real consequence of losing it. Ladies and gentlemen, that was compliance 1.0, a

person's word. Then something broke. Unfortunately, we all know something always breaks. 1929, the crash. Bail banks failing overnight, savings wiped out. The threat, well, the threat was domestic. It was visible. It was catastrophic. And yet nobody nobody had built institutions to contain it. Well, the world responded. Handshake seems to not be enough. We need rules, deposit insurance, capital requirements, central banks, compliance 2.0, trust codified into law,

and institutions established to preserve it. Then the world got bigger. Money could now cross borders faster than any single national authority could follow. Offshore accounts, jurisdictional gaps, funds moving through layers of complexity no national framework was built to see. And we did fraud, laundering, financing of things nobody wanted to finance. So what we did, we created global systems. the FATF or the so-called global anti-inancial crime watchdog.

Bezel, maybe you've heard Bezel with its famous bezel principles and of course AML regime stretching across every single jurisdiction on Earth. Well, that is compliance 3.0 trust at scale industrialized. So trust and twit compliance has evolved from national to local from local to national to global. Each one of these steps was necessary and each one of them addressed the problems of its time which naturally would bring

us to today. You can now build a financial product for six weeks or even less and deploy it to three million users before any framework has caught up. In other words, the pace of product creation has far outrun the pace of rule making. As we've heard in the sessions that predecessed my presentation, the digital, the embedded, the algorithmic, well, none of it fits in neatly into the

world compliance 3.0 was built for. And AI, the topic of today is AI. AI makes this even sharper, not just faster, because as we as we've heard, a regulation can describe a product. However, it struggles to describe a system that keeps changing its behavior after deployment. And we are not just behind on speed anymore. We are behind on the very basic question of what exactly we're supposed

to be regulating. And this is where something went wrong. But let me tell you about my job first and then we will see together with you what actually went wrong. So, as I was introduced, my name is Anton Petro and I'm the chief compliance officers of First Investment Bank, the largest Bulgarianowned bank. When I was offered this specific role, the message was honest and clear. We feel

we might be losing business in the future because of how compliance is perceived, because of perception. They said, "We need someone to unify the function and present it differently." So, they knew something was broken. They just didn't know what exactly and neither did I at first. So, I spent the first couple of months looking for the process to fix, the procedure to rewrite, the framework to restructure

until I walked into a room. I was going to say like this one, actually much smaller. It was full of bankers. And I asked them a very simple question. These were our very own front office managers, the people who bring in clients, who close deals and who build relationships. So I asked them this question. When you hear the word compliance, what comes to mind? I'll be quite

frank. I expected some eye rolls, maybe even a joke or two. What I got was Yes, horror. Somebody actually said that word first. Horror. So what followed was uh whoa obstacle slow down red tape the I stood there thinking these are my colleagues same organization same goals and this is what they think of me I decided not to be offended because at the end of the day

when I thought about it deeper they were not wrong they were describing compliance 3.0 all perfectly. Each one of the reactions I got back there was a precise accurate description of what compliance had become. This is what had gone wrong. The complexity of compliance of compliance 3.0 had created a side effect nobody planned for. Compliance had become a separate tribe, speaking its own language, always arriving last,

operating out of maximum caution. Because in that world, saying no and documenting it was always safer and perceived better than saying yes and being wrong. And you know, the system didn't just allow this, it rewarded it. And this is how the department of no was born. Not in malice, in fear in a system that made caution rational and partnership optional. So I realized that the answer was

not a fully rewritten or brand new framework. It was a completely different idea of what compliance is for. It was not it is not a function that enforces but a mindset that the whole organization owns. It is not a checkpoint at the end but a design principle from the very beginning. And you know I'm still making this argument inside my own institution every single day to people

who are intelligent certainly well-intentioned but shaped by decades of compliance 3.0 all thinking because really you cannot mandate a mindset. You can only demonstrate it consistently the way we are doing it right now until finally someone starts to believe it. But let me make it more concrete because ideas like mindset, culture, they can be too vague and perceived as too soft and AI is not a soft

issue. For the last 300 years, compliance has rewired on one very simple assumption. Somewhere someone human has made a decision and you can ask them why. the loan officer, a trader, an underwriter. Well, AI breaks this assumption quietly. The model approves the loan. The model flags the transaction. The model decides who gets better interest rate. Maybe not today, but tomorrow. And increasingly, nobody in the room can

fully explain why. Even the people who built it. This is not a future problem. As we've heard, this is in production right now, probably in this very city. So, here is my AI test. If your AI system needs compliance to explain its decisions after the fact, well, apologies for breaking this to you, but you have lost the only moment that actually mattered, the one before you trained

it. Because you cannot bolt explainability onto a model any more than you can bolt explain than you can bolt structural integrity onto a building after it's built. What does this mean in real life? Well, let me introduce you to the hacker and the architect. I remember the lady from Philip Morris who said that who mentioned the League of Architects and I liked it. So the hacker the

hacker moves fast avoids compliance until launch then hits the wall. What happens? Force tributes wasted capital delayed. You can imagine everything. And the architect embeds compliance from day one. Measured initially zero friction at launch. Lower customer acquisition costs. higher company valuation and armored against regulatory shifts against at least this is what I've seen or you can think of it as the wind tunnel you put your idea

in for sure it faces some resistance it gets tested but then when it hits the real market well it moves clean no drag no friction no catastrophic surprises The innovators before I get to the playbook, the innovators who whom I've worked with and bypass the wind tunnel, well, they love the feeling of speed until the wall. These who use it, they don't feel slow, they feel ready.

But here is a very crucial point. The wind tunnel only works when it's not operated by some department in some basement. It's part of the factory floor. Everyone in the organization who touches the product knows and understands exactly why it is there. What does this mean for you, the founders, the innovators, the product people in this room? Well, two things mainly. So my playbook first invite compliance

legal to the architecture phase not the Q&A phase. If your compliance sees your product for the first time after it's built well you have built compliance 3.0 relationship with us. We have no other choice but to be a roadblock. Not because we wanted to be but because you have given us no other option. Here is a very important question that I hear from the best innovators I

have worked with and it comes at the very beginning. What does this look need to look like to survive? Minds the word survive not launch in real life. This question when asked at the beginning is very very important and changes everything. And the second advice, well, compliance is your competitive advantage, so use it. Procurement officers, risk committees, boards, well, they live in fear of choosing the wrong

vendor. Removing their fear would naturally close deals faster than any user interface update you might you might show them. Bank great security com fully compliant. That's a very powerful sentence for any sales deck. Here is the trusted innovation flywheel. It's natural, but let's reiterate it. So, embedded compliance brings institutional trust. Trust accelerates and closes deals, which on its part brings revenue. and revenue here is the most

important part brings um funds bolder innovation and of course border innovation with embedded compliance from day one would create further trust. So I would invite you to think of compliance as the engine of the flywheel not a toe booof at the end of the road but it would work only if everyone in the organization pushes for it. The product manager who knows and who asks the right

question from the very beginning. The engineer who flags the data issue before it has become breach and the salesperson who knows they what they can promise and what they cannot. So compliance as a culture as a mindset not as a single department but ladies and gentlemen only survives for those who built blindly. So stop trying to hack the system. Partner with the insiders. A very small disclaimer.

Insiders not within the meaning of the capital markets regulation. That's bad. Mind the context. For those of you who are ready to build differently, who are ready to own their future, as Mr. have said at the beginning, not rented. For those of you who understand that trust is the single most important sustainable competitive advantage out there in any field of service uh in any area, especially the

AIdriven one we're all building right now. Well, the light is green. Let's build. Thank you.