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Improving User Experience in Cryptocurrency
Many developers and companies are now focusing on enhancing the user experience in the cryptocurrency space. This shift promises to eliminate the days of copying long strings of numbers, writing down numerous seed phrases, and dealing with high transaction fees. A seamless and intuitive interface will attract a larger user base, driving engagement and mass adoption.
However, UX is often considered in isolation, without considering other critical factors in product development, such as regulatory compliance, which may require significant changes in the future.
The Importance of Regulatory Compliance
Regulatory compliance is a key factor that can be complex for UX designers, product managers, and developers to understand. As wallets, protocols, and platforms improve their overall UX, compliance remains one of the last significant hurdles that need more attention.
Compliance is Here to Stay
The era of unregulated cryptocurrency is over. Governments worldwide are tightening regulations to prevent financial crime. Companies must adapt to new financial regulations, requiring considerable resources. This situation is similar to the traditional financial sector, which underwent radical changes in compliance post the 9/11 attacks.
Think about the cumbersome onboarding processes that require repeated ID verification and data disclosure. While regulatory intentions are understandable, they significantly impact usability and privacy.
The question that arises is whether these processes need to be so painful for end-users. The conclusion is that they often do not. Here’s why.
The Old and New Approaches to Compliance
Traditionally, compliance is considered late in the development process, often added reactively once the product is near completion. This approach requires constant adaptation whenever regulations change, posing a significant burden, especially for smaller crypto startups.
Instead, a proactive approach is recommended, where compliance needs are embedded into the product design from the beginning. This approach involves predicting regulatory trends and making slight modifications based on future rules, reducing the need for constant changes.
Leaving Behind Traditional Inefficiencies
Understanding the importance of UX in compliance is crucial. The banking sector’s painful compliance processes result from a lack of foundational changes over time. The hyper-fragmented nature of the industry today suggests that we might inherit these inefficiencies if we do not adapt.
Proper data sharing is considered one of the best ways for virtual asset service providers to comply with Europe’s EBA Travel Rule Guidelines, which require specific information to accompany fund or crypto asset transfers.
Despite the decentralized and permissionless nature of crypto, companies in the industry face numerous regulatory requirements that can negatively impact the user experience. To avoid repeating the banking sector’s inefficiencies, the crypto industry should proactively focus on compliance and make it central to product development. This proactive approach ensures a seamless user experience while meeting regulatory standards.
The UX-compliance combination is a marriage made in crypto heaven.
About the Author
Bam Azizi is a tech entrepreneur and the co-founder and CEO of Mesh. He has dedicated his career to developing cutting-edge technological solutions and reimagining digital interactions. Bam previously founded NoPassword, a cybersecurity and identity company acquired by LogMeIn in 2019. In 2020, he founded Mesh to build a new financial system leveraging technology and digital assets. Under his leadership, Mesh provides fintech companies with a seamless and secure one-click system for asset transfers, deposits, payments, and payouts. Mesh’s APIs are available with hundreds of exchanges and platforms.
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