The Elephant in the Room: The Bank is So Much Bigger Than My Startup – Can I Really Insist On Doing Due Diligence On Them?

This question came up when I announced my?new workshop on Wednesday, April 5th, 2023, on how to vet your next banking or financial partners and avoid the next Wirecard or FTX:?"Yana, but these partners are so much bigger than us, there is no way they will agree to this due diligence..."

Many startups don’t even consider vetting their banks or card processors or other partners because they feel small and powerless in comparison. They think that it’s hard enough to secure these partnerships, so there is no reason to make this process even harder or longer. A small startup may feel that a larger company would not even be open to sharing their sensitive documents, such as an AML policy or audit reports.

Some of these concerns are valid.?However, there is a workaround.

There are some?publicly available documents and non-sensitive documents?that you can request and review without causing any major concerns.

Latest annual reports?(they?include financial performance for the last 2-3 years, audit reports, and notes to the financial statements). This is a public document, it can often be downloaded from the company’s website, SEC website, or stock exchange websites. What you want to review there:

• Liabilities disclosures – is there a big debt owned by the company and to whom?
• Short-term payables – this is usually the amount of the client’s funds held by this institution is included here.
• What are the assets of the company (short and long-term)? Are they liquid?
• Provisions (this is where companies report expected payments for regulatory penalties among other things) and?notes on contingent liabilities and pending litigations.
• Be careful if the company was?recently acquired?by a larger company, typically after such acquisitions the risk appetite for new projects or riskier verticals is substantially reduced.
• Review?recent publications, articles, or media reports?about your partner, especially regarding “accounting irregularities”, high-profile investigations, regulatory warnings, and recent departures of senior leaders. Ask your sales representative to comment on that.
• Watch out for signs of?aggressive marketing, sponsorships of athletic events, or high-profile celebrity campaigns. Especially if this is combined with modest profitability based on the financial results that you will find from the financial statements. This mix often indicates very aggressive growth plans that may not be sustainable, especially during times of volatility.

Sounds important but overwhelming? Too much work? Not sure how deep you can dig?

This is exactly what we are going to cover on April 5th during the workshop on how to carry out due diligence on your financial partners and design your future AML controls over joint customers.

FULL AGENDA:

1. Scope of the review and available sources. Is it outsourcing or not?
2. AML/CTF due diligence. Sources used: Basel Committee Guidelines?on sound management of risks related to money laundering and financing of terrorism?(2022), FATF Recommendations and Guidelines on Correspondent Banking Services (2017); Wolfsberg Financial Crime Principles for Correspondent Banking (2022).
3. Due diligence checklist (including considerations related to fraud management, InfoSec, privacy, governance, financial soundness, etc.)

This?workshop is only available for the members of the Compliance Collective membership, so if you have not joined yet, the time has come NOW. This way, you will have access to all the workshops I offer and you will have ongoing support from someone who has been in the compliance trenches, just like you!

Let me give you a full and concise overview of all the details about the?Compliance Collective?monthly membership.

Who is it for?

Compliance, risk, and regulatory experts, Heads of Departments, MLRO, CROs, CCOs, legal officers, auditors, and regulatory consultants who realized and experienced that just knowing laws and regulations?will not be enough to achieve their next goals.

How do we work towards achieving your goals?

Compliance Collective is a monthly group coaching experience built on two main pillars:?

• Monthly Workshops?teaching you how to drive forward and successfully complete the most common compliance-related projects (see the schedule below); and?
• Group Coaching Monthly Office Hours?where you can ask?me and other participants any questions about your “situation” or a problem that makes you feel stuck. The next Office Hours call is scheduled for April 3rd, 2023 at 1 pm CET.

• 12 Monthly Workshops (one each month)

1. FinTech Licensing for Self-Starters (April 2023)
2. How to Open Bank Accounts (to be announced)
3. FinTech Business Wide Risk Assessment (to be announced)
4. White-Label vs Licensing (to be announced)
5. E2E Scope of Crypto Compliance (to be announced)
6. Faster Onboarding of Corporate Clients (to be announced)
7. Creating your Privacy Policy and GDPR Compliance (to be announced)
8. Managing Outsourcing documentation (to be announced)
9. Structuring White-label Solutions in FinTech (to be announced)
10. Managing Compliance Resources and Compliance Budget (to be announced)
11. Preparing your FinTech for audits (to be announced)
12. Annual Compliance Reporting (just finished?on March 21st, 2023).

• Bonus 1: you will get instant access to the Compliance Accelerator?recorded training focused on networking skills, building authority, and establishing your credibility in FinTech.
• Bonus 2:?free access to any new workshops and training?I offer during the time you remain a member of the Compliance Collective (I have a history of creating 3-4 new workshops a year, based on the hot topics emerging in the industry).

Full satisfaction or money-back guarantee. I totally understand that you may have been disappointed or misled in the past by other service providers or online programs. This is exactly why this offer includes a full 100% refund within the first?30 days of the program to make sure that you have an opportunity to join and experience what FinTech Compliance Collective has to offer with complete peace of mind.?It means that if within?the first 30 days, you attend the workshop and the Office Hours and then decide you don't like the program because it's not what you expected or you simply changed your mind, all you have to do is to email me and we will gladly issue you a full refund and we will give you a big thank you for giving us a chance. If there is even a slight chance that this program can help you save time, increase efficiency, or create new opportunities, to make a difference in your professional life, you should invest today, because you can try the materials and apply some strategies from day one and see if it works for you.?Now?you can invest in this program and in yourself with confidence and absolutely risk-free, no guesswork needed.

Click to join?Compliance Collective?or send me a DM if you still have questions!