Fintech & Digital Transformation
Traditional financial services providers as well as Fintechs, banking hubs, Regtechs and other start-ups are feeding innovations to the market every single day. It is yet unknown, if traditional ‘banks‘ will exist in a decade’s time. In order to benefit from digitalisation and maximum customer focus, established institutions have to continuously challenge and re-invent their business models. With sound judgement and equal passion we support both, incumbents and challengers on their journey of disruption – the process of ‘creative destruction in regulated markets’.
Audit, Risk & Compliance
One of the key success factors in digital finance is to enable free thinking - while ensuring structure and compliance. We assist our Fintech clients to always strike the right balance. Our service offering covers the whole range of audit and assurance services for near-banks, specialists and fully licensed banking operations.
This includes statutory audits of financial statements, IT audits and other assurance services, such as ISAE 3402, SSAE 18, as well as web-, cloud and risk management certifications. For our start-up clients we also provide outsourced controlling and accounting services as well as outsourcing of corporate functions (compliance, internal audit).
As auditors and advisors we have been assisting some of the most successful German Fintechs for years. We also built a sound track record with local subsidiaries and ventures of international Fintech investors. With equal passion we support the ‘two-people-start-up‘ and the ‘full-grown Neobank’.
Fintech Growth Advisory / M&A, Fundraising and Venture Debt
In addition to traditional fundraising and the development of digital (financial) ecosystems, strategic development and Mergers & Acquisitions are increasingly becoming the focus of Fintech considerations. An exclusive focus on the German market might not bring the necessary growth in the medium term, or a successful B2C approach might hold potential for a B2B approach. In addition to strategic investors such as banks and insurance companies, larger and internationally oriented fintechs are increasingly acquiring smaller competitors. We expect all of these issues to continue to drive momentum across all fintech sub-segments, be it Open Banking/API, Robo Advisory, Neo Banking, Crowdinvesting/P2P Lending, Neo Brokerage as well as Insurtechs, Regtechs, Wealthtechs and Proptechs.
Our specialized services in the area of Fintech Growth Advisory range from strategic and regulatory advice, business modeling (integrated financial planning) and company valuation to comprehensive support of the entire transaction process (fundraising, M&A buy-side, M&A sell-side, merger). This includes equity story, pitch deck, coaching for investors the approach, data room management, (vendor) due diligence as well as support in contract negotiations. In the context of the further development of digital (financial) ecosystems, we advise on strategic partnerships, joint ventures or sales cooperations. If (venture) debt is required, we support the structuring as well as the approach of suitable debt capital providers. Our services are tailored to the individual requirements of each start-up. Our extensive German as well as our international network allows us to approach different investors and potential partners in a targeted manner - be it e.g. from the venture capital environment, strategic investors such as banks or insurance companies as well as family offices and other institutional investors.
Distributed Ledger Technologies (DLT) are regarded as a central lever for the further development of the financial services industry. They create a multitude of new approaches to change existing business processes - and thus also business models - or to allow them to emerge at all. Cost advantage, transparency and increased efficiency are key objectives. Digital assets include, for example, digital cryptocurrencies, utility tokens or even non-fungible tokens (NFT) on illiquid assets. Applications in payments, commerce, settlement/processing, or supply chain management are just a few recent examples. It is possible that new digital currencies will replace traditional fiat currencies in the medium to long term.
BDO's Crypto Advisory consulting supports the analysis of the impact on the existing business model, derives recommendations for action and implements them. Our team of experts also provides support, for example, in the targeted search for qualified service providers or cooperation partners for the custody of digital assets or for the establishment of a corresponding digital ecosystem, e.g. for the issuance of tokens.
Protecting electronic business and personal data is increasingly important in association with digital business models. It must be noted that a single security measure does not achieve the same level of protection everywhere. Protective measures must be adapted to the business model and developed along business processes. BDO evaluates existing cyber risk management activities in assessments together with selected bank/company representatives. The cyber risk assessment is not limited to technical risks. It also comprises a check of additional activities, particularly the cyber risk culture, selected internal monitoring (e.g. permissions and payment-related monitoring) and cyber awareness training performed. We also evaluate potential cyber attack scenarios which may constitute a potential risk. BDO performs what are known as penetration tests in order to obtain a realistic picture of the security measures implemented. Existing attack vectors are simulated in these tests. This provides an indication of a network’s actual resistance capability and helps uncover any potential weak spots.
Enterprise Content Management
Digital transformation leads to a switch from analogue document processing to digital content management. With a holistic strategy for Enterprise Content Management (ECM), financial institutions are able to record, manage and organise all their documents and content across the company, in order to provide access to information more effectively, reduce manual processing times and ensure secure storage. The use of suitable ECM technologies can boost the efficiency of document-based business processes through increased automation, thus generating benefits in terms of productivity and costs. Compliance with relevant provisions of (supervisory) law and compliance guidelines must be ensured.