A rapidly evolving industry demands an agile strategy, one that incorporates current market dynamics and anticipates future developments.
The starting point for beginning the strategy development process varies. Sometimes it’s an exogeneous shock – a new regulation, a new entrant or a new technology, or M&A. Other times the catalyst is internal, either good governance in planning ahead or insufficient alignment among a management team on the right go-forward direction. Similarly, the scope can also differ, from top-of-the-house assessments to more targeted, line-of-business improvement.
Regardless of the scope or context, the mission is always the same: to work with the client to ensure that they are best positioned for success going forward.
Risk is inherent in any business. The goal is not to avoid risk but to understand what risks the organization is taking (or not taking), quantify their size and likelihood, and ensure that the expected return is more than sufficient to justify the action.
Our team has supported major Comprehensive Capital Analysis and Review (CCAR) programs, developed forecasting models, and validated complex models related to commercial real estate and trading & settlement.
Now the firm’s work is targeted to line-of-business risk optimization. Specifically, we work across the payments lifecycle – from applicant underwriting, to authorization decisioning, to transaction disputes and chargebacks, to chargeoff management – to improve both customer experience and issuer performance.
Sound data, comprehensive research and robust analytics are the foundation for any well-informed decision.
Directly, and through our partners, we access a number of proprietary data sets, including national samples of DDA and credit card usage, as well as regular polling of small business banking behavior.
We draw on decades of experience conducting timely and targeted research, gathering input from consumers, employees, small businesses, merchants, card issuers, acquirers, billers, and financial institutions. Combined with our industry knowledge, we use this research to generate powerful insights for our clients.
Every bank and payments company relies on multiple third parties, both as customers and as vendors. But, with so many potential providers, how does an organization pick the “right” partner? And how should the agreement be structured to best align incentives?
We have helped select and structure dozens of partnership agreements across key banking and payment categories. In our experience, it is often possible to materially improve working relationships along multiple dimensions simultaneously, e.g., better economics and better functionality.
Our approach starts with what (we are solving for), not who (which providers). With clarity around business goals, we work through selection, agreement structuring and ultimately contracting.
With hundreds of M&A transactions every year, the banking and payments market has been a bright spot for capital deployment. Investors are attracted to the category’s above-market growth rates, expanding margins, strong cash flow and barriers to entry.
We have worked with financial sponsors and strategic buyers’ corporate development teams to diligence assets across the value chain. Through our sector specialization, we can quickly assess the company’s competitive positioning and hone in on the most salient risks.
Our playbook includes an estimation of the Total Addressable Market (TAM) with the business’s current capabilities, as well as a perspective on the target’s upside potential via different market adjacencies.