Crypto Pathfinding

Thought Leadership

8 Nov

Written By Reg Jurkevicius

Entry Strategies for Traditional Firms.

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Authors

Author Profiles Database

Peter Schutzer-Weissmann

Senior Manager

Vincent Giltinan

Consultant

Peera Sawadsuksobchai

Analyst

Adam Waring

Analyst

Adam Chettibi

Analyst

Crypto Pathfinding

Amid the surging demand for cryptocurrency access, traditional financial service firms are awakening to the market's potential. In response, they're exploring ways to meet this demand and make strategic investments. However, navigating this path to offering crypto requires careful steps. This article outlines the essential journey traditional firms should take to successfully enter the crypto space, providing a comprehensive five-step guide.

In the previous article of Valentia Partners’ digital asset series, we delved into three emerging uses of Distributed Ledger Technology (DLT) within the operations of financial services (FS) firms. We emphasised that these applications are distinct from decentralised cryptocurrencies and serve as tools to enhance existing financial products and drive industry progress towards cost improvement and more efficient markets. However, the story of digital assets within traditional FS firms doesn't conclude with improving existing operations. In addition, we're witnessing some of the largest institutions leading the charge in making investments to provide their clients with exposure to cryptocurrencies.

The industry is taking note of the rising demand from clients for cryptocurrency access, and some forward-thinking institutions are exploring ways to service this demand and incorporate it into their strategic plans. Year-to-date, as of October 30th, 2023, the price of bitcoin has surged by an impressive 109.4%. In July, BlackRock Inc.'s CEO, Larry Fink, hailed Bitcoin as an "international asset" and expressed the company's commitment to make investing in cryptocurrency more accessible and cost-effective for investors. Furthermore, during Bitcoin's recent price rally in October, Fink characterised it as a 'flight to quality,' underscoring Bitcoin's 'digital gold' attributes. This surge coincided with heightened discussions about "the need for crypto" among BlackRock clients worldwide, further emphasising the growing significance of cryptocurrencies in traditional financial services.

This article introduces Valentia Partners' Pathfinding playbook, applying its detailed five-step guide to businesses contemplating investments in cryptocurrency offerings. It also outlines the three primary products that forward-thinking traditional financial services firms are adopting to provide their clients exposure to cryptocurrency.

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BUSINESS ADVISORY, TECHNOLOGY & DATA, DIGITAL

Tier 1 UK Bank

BUSINESS ADVISORY, TECHNOLOGY & DATA, DIGITAL

Youth Banking Fintech Acquisition

Delivered a review of Youth and Family banking strategy. Worked to assess the existing capabilities against market demand.
Identified an opportunity to acquire a disruptive fintech and integrate its capabilities within the incumbent bank's existing product set.
Provided delivery assurance as the acquisition was made and drew up the implementation and integration plan for onboarding of the technology capabilities and personnel included in the acquisition.

BUSINESS ADVISORY, TECHNOLOGY & DATA, DIGITAL

BUSINESS ADVISORY

Crypto

BUSINESS ADVISORY

Operating Model & Resilience

Developed a comprehensive operating model including organisational structures, governance, reporting processes and control functionality.
Defined critical processes and teams impacted, performed a gap analysis and developed a Performance Management Framework.
Defined and implemented operational resilience plans including, risk appetites, tolerance levels for disruption of services to customers, internal stakeholders and business continuity.

BUSINESS ADVISORY

Crypto

BUSINESS ADVISORY

Regulatory Licensing & Passporting

Programme management and oversight of the Central Bank's licensing process including both E-Money Institution (EMI) license and Virtual Assets (VASP) registration.
Ensured a full comprehensive set of documentation to support the EMI License and VASP Registration.
Developed a complete set of business requirement documents for passporting licences across the EU and identified distinct requirements per member state.

BUSINESS ADVISORY

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