“There is another way.”

From police officer to chief compliance officer, Michel Laroche has dedicated his life to protecting others. Now at Zag Bank, he balances making a user-friendly customer experience and keeping the business secure.

Over his career, and almost as if he was a character in a best-selling series of thrillers, Michel Laroche has developed a reputation as a force fighting against crime—except he’s tackling financial misdeeds and ensuring compliance instead of pounding the pavement and solving murders.

“I worked in law enforcement for several years in Manitoba before transitioning to the private sector,” Laroche says. “There is no average day in the life of a police officer, which I found particularly attractive. I was also drawn in by the role’s significance to the community. Educating people about the law and enforcing it for the sake of protecting the public is a huge responsibility,” And according to Laroche, he always thrived on challenge.

“When I left law enforcement, I worked with a few different financial institutions, investigating fraud and financial wrongdoing,” says Laroche. “But I wanted to be involved in building something from the ground up. That was the challenge presented by Zag. It was an opportunity to take what I already knew about compliance, improve upon it, and set a strategic course for a new bank.”

Through the years, Laroche has taken senior roles with American Express, ING Direct, Ally Bank, and now serves as chief compliance officer for Zag Bank.

Going in, he knew that the compliance framework for a low-cost, direct bank wasn’t the same as it is for a traditional bank, but he knew his background gave him an ability to reason with people and gain consensus among different groups.

“There’s an impression that law enforcement is about being forceful, but really it’s about mediation,” Laroche says. “That translates well to my work on Zag’s executive team. I need to help our team see the advantages and repercussions of decisions from a compliance standpoint.”

Yet compliance isn’t Laroche’s only responsibility at Zag. Laroche has three official roles with the company: chief compliance officer, chief anti-money laundering officer, and chief privacy officer, with the unifying theme of building and improving upon Zag’s overall compliance framework.

“There’s an impression that law enforcement is about being forceful, but really it’s about mediation. I need to help our team see the advantages and repercussions of decisions from a compliance standpoint.”

“That translates into several day-to-day functions, but most of my time is spent advising different areas of Zag’s operations on how to manage regulatory risks and encouraging them to think from a compliance standpoint,” he says. “For instance, when our executive team is evaluating new products or services, or considering a new approach to doing business, I add a compliance perspective to the conversation.” This means identifying necessary controls, including the benefits and consequences, so that the team can make an informed decision on whether or not to pursue an opportunity.

Of course, in order to add that level of value, Laroche maintains a current knowledge of laws, regulations, and industry trends. Staying on top of its changing industry is vital at Zag since it is 100 percent digital. The bank does not have physical branches and even uses the motto, “There is another way.” That other way is providing clients with competitive interest rates and the elimination of unnecessary fees. However, Laroche acknowledges the unique challenges that come with not having branches to gather client information or using face-to-face interactions to instill confidence in clients.

“My work is devoted to balancing regulatory requirements and a high level of security for clients, while also delivering on Zag’s promise to provide an easy, convenient banking experience,” Laroche says. “Our focus is on transforming the entire banking experience to make it easier and more convenient while providing competitive rates and no unnecessary fees. Offering these benefits means we need to be efficient across our operations, including compliance.”

To accomplish this, Laroche’s team has developed a streamlined, multilevel system that provides a high level of client security and privacy that’s in line with regulatory and legal requirements, without causing unnecessary headaches for clients. “An example would be our account application process—it’s built to identify suspicious activity, yet the process is very simple and can be completed in a matter of minutes,” he says.

Currently, Canadian banks are struggling with two sets of regulatory laws: one is the evolution of provincial and federal privacy laws, and the other is the Anti-Money Laundering and Anti-Terrorist Financing law.

“Both have meant new compliance requirements around how we collect and store client information and interact with clients,” Laroche says. “I’ve been spending a lot of time building specific controls for both of these laws to make sure we have efficient controls in place to satisfy regulators. I’m very proud of what we’ve developed because it isn’t easy to implement systems without placing a burden on clients. We’ve found the right balance.”

In the years ahead, Laroche plans to build on the foundation Zag already has in place, and maximizing the efficiency of the department is one of his biggest priorities.

Everything the company does needs to be scrutinized for cost efficiency, from the technology used to its internal processes. “It’s essential to fulfilling Zag’s business strategy. To offer those benefits, we can’t be passing costs down to our clients,” Laroche says. “We need to keep our eye on staying true to Zag’s focus on an easy banking experience. We’ll continue to find ways to provide our clients with a high level of security.”