Identifying new clients whose onboarding costs money rather than generating revenue

Company description

One of Switzerland’s two crypto banks, with around 250 employees, has been accepting customer deposits for over five years, converting fiat currency into crypto assets, holding them in custody and trading them on behalf of its customers. Following funding rounds A, B and C, the company is under pressure from investors to grow and generate a profit.

Current situation

• Intense pressure from investors to grow as quickly as possible whilst simultaneously generating profit.
• Overcapacity during the crypto winter and rising cost pressures.
• The need to focus more strongly on potential clients with high trading or investment volumes.
• Increasing risk appetite amongst staff due to targets that are difficult to achieve.
• Onboarding of clients against the advice of Risk, Legal & Compliance: lack of economic plausibility, proven past non-compliance, no prospect of profit from these client relationships. Both clients were arrested and charged following onboarding; subsequently, FINMA initiated enforcement proceedings against the crypto bank.

Objectives

• Development of a forward-looking corporate strategy with a focus on sustainable growth.
• Establishing a risk culture that enables growth whilst controlling risks.
• Establishing clear structures and roles for staff.
• Building a corporate culture that fosters innovation without taking disproportionately high risks.

Measures implemented

• Strategy workshop with senior management and divisional heads: development of a new risk statement, including a risk analysis and risk-mitigating measures.
• Organisational analysis: Review of existing structures, processes and resources.
• Restructuring: Strengthening the position of Risk, Legal & Compliance at executive management level and on the Board of Directors.
• Investment in a new risk culture: establishing an escalation channel to the Risk Committee within the Board of Directors in cases where the Executive Board overrules the recommendation of Risk, Legal & Compliance.

Achievements and results

• Cultural change in evidence: greater personal responsibility among client advisers and improved collaboration between Sales and Risk, Legal & Compliance.
• Long-term competitiveness secured: The company has positioned itself as an innovative service provider in a forward-looking sector.