Five key FinOps considerations
The success of your business relies heavily on making informed financial decisions. While it may seem daunting – gathering all of the data, plotting, and planning – identifying potential risks and addressing them early on can save you from costly troubles down the road.
Below, we will explore five key FinOps considerations for modern day financial planning.
1. Regulatory compliance
Regulating compliance means that your organisation adheres to the guidelines of local financial regulatory bodies. From the get-go, you should be researching Payment Service Directive 2, Financial Conduct Authority authorisation, along with risk and compliance.
A part of most guidelines consists of client safeguarding. This is done by maintaining a clear separation of funds between your company, customers, and any regulatory fees.
2. Liquidity management
As your business grows, managing liquidity becomes more and more complex. Ensuring you have enough funds in the correct accounts at the right time requires careful and strategic planning.
This becomes even more difficult when you need to consider licensing, different products, and new partners. Some providers may even ask you to pre-fund accounts. Proactively designing and adapting your liquidity strategy is essential to ensure financial stability and avoid any disruptions.
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3. Market disruption
You don't just need a business strategy to plan for disruption, you need a 'Plan B' to avoid disruptions due to market pressure and financial difficulties.
Implementing redundancy measures will incur a cost, but adds extra protection and helps ensure uninterrupted operations.
And don't become too complacent in your niche or industry. Keep innovating and improving your product and service to make sure you never actually need to rely on your 'Plan B'.
4. Security
In today's digital landscape, cybersecurity is quickly becoming the main factor when customers choose which financial services to use. Protecting your business from data breaches and malicious attacks, ensuring secure service provision, managing transactional load effectively, and having a robust business continuity plan are all critical aspects of financial operations.
It is essential to anticipate potential security risks and plan for the worst-case scenarios. By doing so, you can minimise the impact of security breaches and safeguard your business and customer data.
As a side note, be forthright with your comms to customers if you are breached. Outline what happened, why it happened, and how you will fix the issue to ensure it doesn't happen again. This openness builds trust in a customer-based that may already be on the verge of migrating to another provider that hasn't been hacked yet.
5. Partnerships
Partnering with other financial institutions and Fintech companies is crucial for market growth. Launching new features is difficult, time-consuming, and expensive, which means you probably won't be able to handle everything on your own right away. That's where partnerships come into play.
To manage these partnerships successfully, your operations team needs the necessary resources to handle the additional workload. Make sure to equip your team accordingly with training, inter-company conferences, and the necessary resources.
To build a secure financial foundation for your business, prioritise regulatory compliance, manage liquidity, prepare for market disruptions, strengthen security, and partner wisely. With careful planning, diligent execution, and continual adaptation, you can effectively scale your business, empower your team, and keep customers satisfied.