Welcome back to The Architects: Reimagining the Financial Future series from Flourish Ventures with This Week in Fintech!

In this episode of The Architects, we’re digging into one of the most important – and hardest – parts of building in finance: compliance and licensing at scale.

For this special episode, co-hosts Nik Milanović (TWIF) and Kabir Kumar (Flourish) sit down with guests Snigdha Kumar, co-founder and CEO of Brico, and Chris Brummer, founder and CEO of Bluprynt.

Traditionally, regulation has been somewhat of a blunt instrument. Rules are written, firms comply, regulators enforce.    But that model is broken, and the oversimplicity of it can choke off innovation that is designed to help the entire industry work smarter, faster, and more efficiently. 

We need a system of regulation that moves with innovation, that can make it safer and faster, not slower and scarier.   We need smart compliance. 

From Checkbox Compliance to Information Systems

Traditional compliance is built on fragmented processes: siloed data, manual interpretation of thousands of rules, armies of lawyers and consultants, and reporting that arrives months after the fact. It’s expensive, reactive, and fundamentally misaligned with the speed of modern fintech.

Founders feel it acutely:

• Legal bills in the seven figures just to navigate state-by-state licensing, before a single line of code is instrumented for reporting.

• Cross‑border or money movement leads drowning in spreadsheets and emails, “secretly wishing to be fired” because data never arrives on time and regulatory exams are constant crisis management.

Smart compliance starts from a different premise: compliance is an information problem, not a paperwork problem. The hard part isn’t only “what are the rules?” It’s:

• How do those rules map to my products, flows, and data?

• How do they differ state by state, or jurisdiction by jurisdiction?

• How do I detect deviations and update systems quickly?

That is exactly the class of problems that software, AI, and programmable money will solve.

Compliance as Architecture, Not Friction

Smart compliance treats rules as part of the architecture of a business, not just guardrails around it.

Two key shifts follow:

• Compliance as language: Disclosure and conduct rules are, at their core, structured communication protocols—standards for how companies “speak” to customers, investors, and regulators. Once encoded, those communications can be generated, validated, and delivered programmatically, instead of as bespoke PDFs and legalese.

• Compliance as a scaling system: Instead of being the team that says “no” or “not yet,” compliance becomes the system that tells you how to scale safely—what products you can launch where, what limits to set, what data to monitor. Think of it as a “step‑by‑step booklet for scaling” baked into your infrastructure.

In this view, regulatory frameworks don’t just constrain growth; they define the lanes along which you can grow confidently. If you can plug those frameworks directly into your stack, you get less uncertainty, fewer surprises, and faster iteration cycles.

What Smart Compliance Looks Like in Practice

Several design patterns are emerging from builders at the edge of this space, not the least being releasing rules as Code that can be utilized quickly, instead of sheaths of documentation that have to be carefully parsed.  Systems can utilize GenAI to ingest regulatory text, guidance, and state-by-state variations, and translate them into machine-readable rules and policies. AI models are particularly strong at:

• Reading “stacks and stacks of rules”

• Detecting patterns and conflicts

• Mapping obligations to concrete data fields and workflows

This makes it possible to go from “new rule is published” to “our policies, flows, and dashboards are updated” in days, not quarters.   It also slices through the complexity of our federal system, making it easier to create systems compliant with all 50 states and the federal government.  

Regulators and institutions both benefit when risk is visible continuously, instead of once per quarter in a static report. Smart compliance systems:

• Build live dashboards fed directly from production or ledger data

• Flag anomalies, breaches, and emerging patterns automatically

• Generate regulatory reports as materialized views of the same underlying data

This is where AI and on‑chain infrastructure are especially powerful. If more financial flows, positions, and identities move on programmable rails, and AI can continuously scan for outliers, regulators can move from “post‑mortem investigation” toward “early warning and course correction.”

Why Now: Technology, Culture, and Regulation Have Caught Up

None of these ideas are brand new. Smart compliance has never been a matter of vision.  However, now, several converging forces make this moment unique:

• AI is finally fit for purpose: Large language models and specialized agents can digest complex regulatory materials, track changes across dozens of jurisdictions, and map them to business logic and data schemas. What used to require armies of analysts can now be semi‑automated, with humans in the loop for judgment, not rote reading.

• The bank‑as‑a‑service hangover: High‑profile failures in embedded finance and crypto exposed the limits of “just partner and ignore the plumbing.” Founders now want to own their licenses, risk, and economics earlier—and they want tools that make that realistic at seed stage, not post‑Series C.

• Regulation is proliferating, not disappearing: Despite headlines about deregulation, the reality is more nuanced. New federal stablecoin laws, evolving market structure frameworks, and state‑level consumer and payments rules are layering more obligations on top of existing ones. At the same time, clearer rules can be an unlock—if you have the infrastructure to comply efficiently.

• Regulators are under pressure to modernize: Sandboxes, pilots, and “innovation exemptions” show agencies know they need new methods to keep up. Smart compliance offers a path where regulators can:

• See real data sooner

• Evaluate new tools and approaches

• Recognize good‑faith efforts even in novel situations

Conclusion: Smart Compliance as Trust Infrastructure

The real promise of smart compliance is that it turns regulation from a drag into a form of shared infrastructure: a trust layer that everyone can build on. When rules, data, and software are aligned:

• Consumers get safer, more transparent products.

• Innovators get clearer guardrails and fewer nasty surprises.

• Regulators get earlier visibility and more precise tools.

• The financial system as a whole becomes more resilient and adaptable.

In a world of programmable money, agentic AI, and tokenized assets, the question isn’t whether compliance will change—it’s whether we design it as thoughtfully as we’re designing the products themselves. Smart compliance is the blueprint for doing exactly that.

Don't forget to catch up on other episodes in The Architects limited series!

The Architects: Reimagining The Financial Future” is a new podcast series from Flourish Ventures with This Week in Fintech that asks a big, simple question: what does a better U.S. financial system actually look like, and who’s building it? Hosted by TWIF’s Julie VerHage-Greenberg and Nik Milanović alongside Flourish’s Emmalyn Shaw, Kabir Kumar, and Sarah Morgenstern, the series brings together founders, operators, and regulators who are reshaping how Americans and the businesses that serve them manage money, build wealth, and protect against risk.

Across the series, guests share founder journeys, regulatory perspectives, and deep dives into modern financial infrastructure and embedded finance. You’ll hear from leaders like Itai Damti of Unit and Amit Sagiv of Wix on the rise of embedded finance; Nathaniel Harley of MANTL and CJ Przybyl of Reserv on core innovation within banking and insurance; and regulators including Adrienne Harris (former NYDFS Superintendent), Jo Ann Barefoot of AIR, and Michael Lee of the Federal Reserve Bank of New York on how innovation can strengthen systemic trust rather than erode it.

Future-focused episodes explore smart compliance with Snigdha Kumar of Brico and Chris Brummer of Bluprynt, agentic finance with Ethan Bloch of Hiro Finance and Rodri Fernández Touza of Crossmint, “The Finternet” with Siddharth Shetty of Finternet Labs, and how AI is transforming frontline financial security with Oban MacTavish of Spade and Nicky Goulimis of Tunic Pay. Taken together, these conversations spotlight the architects moving finance forward by expanding access, lowering costs, improving products, and building a more resilient financial future for everyone.