In recent years, the banking and financial industry has experienced the creation and introduction of many new markets outside of the traditional banking segments. The introduction of these markets is taking place so fast that there are stark contrasts to how compliance and risk will be applied at the state and federal level. The speed and complexity over the growth of these markets and the uncertain regulations that can accompany them make them high risk with the potential of high reward.

Cannabis Banking

With the legalization of recreational marijuana in nine states and Washington, D.C, and another twenty states legalizing medical marijuana, the legal selling of marijuana at the state level is a growth industry currently valued at $11 billion for 2018 with projections to reach more than $21 billion by 2021.

Cannabis Banking

58% (states in blue including AK & HI) engage in recreational or medical marijuana use.

Businesses are seeking banks to partner with and banks are searching for compliance and risk management solutions to be ready for the ever-changing rules and regulations required by the states and ultimately the Federal government. With 58% of all states in the union (including Alaska and Hawaii) actively participating in either recreational (9 states) or limited to medical purposes (20 states) it is easy to recognize opportunities for banks to engage in this marketplace, but also the need to understand the risk of potentially conflicting state and federal regulations and consequences of that conflict.

Cryptocurrency

The introduction of bitcoin and other crypto-currencies have also made their way into the financial headlines. So far, the Federal Reserve Chairman, Jerome Powell, testified before the House Financial Services Committee, that the Fed agrees it won’t regulate cryptocurrency, generating a great deal of criticism from people who say the Fed leadership is stating they do not have jurisdiction over cryptocurrencies and aren’t seeking to provide oversight. Meanwhile, the potential growth of cryptocurrency such as bitcoin is expected to attract a lot of investors. The market cap for bitcoin is expected to increase 155% from June 28th to December 31, 2018 this year alone reaching $268 billion.

Cryptocurrency

So, what does this mean for a cryptocurrency trading platform to be compliant within the U.S. or even internationally? The answer is not clear now, yet billions of dollars are currently being traded as cryptocurrency.

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Microfinance

The role of microfinance has changed a great deal in the past eight years. Early on it was limited to poor entrepreneurs and small businesses with limited access to banking services with two mechanisms for the delivery of financial services. One mechanism was relationship-based banking for individual businesses; and the second was a group-based model where several business investors came together to apply for loans as a group.

Most of the world remains poor or low-income

71% of the world’s population lives on less than $10 a day

Today, the objective has progressed to providing access to funds to the poor or socially marginalized population around the world where they have access to a wide range of financial products and services. To offer these financial products, many banking and support groups initiate activities that require services to guide these investments to ensure they are being properly managed within the various countries they operate.

The Solution

Considering is the advancements of technology with artificial intelligence, advanced data analytics, and pattern detection, lending institutions can easily implement an integrated Governance, Risk, Information, Compliance and Audit Management (GRICA) system based on artificial intelligence encouraging a big data approach to GRICA.

360factors Solutions

We offer the following solutions:

Value

  • Lending Institutions that will switch from disjointed legacy applications to advanced technologies by investing in integrated Governance, Risk Information, Compliance and Audit system will undoubtedly gain efficiencies and reduce costs by minimum of 20%.
  • A sophisticated integrated EGRC system will provide insight into predictive analytics and context around risk management, business strategy, objectives and performance which will enable the lending institutions to make intelligent decisions about acquiring and retaining the best customers, as well as safeguard the reputation and financial health of the companies it services.