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Insights and Expertise

ible to customers, delayed refunds due to disputes, • Days with blocked transfers, holds or frozen ac-
fraud flags triggering unnecessary holds or scheme counts: Rising blocked days or frozen funds are
monitoring programs such as VAMP can directly af- usually the result of the regulatory misalignment or
fect how quickly trust is maintained. The KPIs re- concerns over the license, capital adequacy or safe-
flect the symptom, but the payment structure often guarding integrity of the entity controlling the mon-
contains the explanation. ey. Without explicit KPIs tracking license-related ex-
posure, these events appear random when they are
Compliance documentation is another frequent predictable and preventable with proper oversight.
trigger. Banks and payment providers can tempo-
rarily restrict or delay user-facing processes if cor- Until organizations measure the regulatory stand-
porate documents, source-of-funds explanations or ing of whoever holds their funds as a core risk KPI,
regulatory confirmations are incomplete or under payment and banking risk will stay reactive, and
review. this is far more expensive than it needs to be.

From a metrics perspective, this appears as spik- When the risk KPIs show increasing instability, fi-
ing complaints, but from a payment perspective, it nance will usually focus on contingency planning
reflects regulatory friction and provider risk man- or insurance but will not examine whether the root
agement. Without structured oversight, these is- cause is actually within the banking and payment
sues accumulate and distort the real customer loy- flow design, provider selection or risk treatment,
alty position of the business. simply because they were never trained to look
there.
2. The risk management KPIs
3. The technology and data security KPIs
Risk management KPIs are often analyzed for compli-
ance and fraud control, but payment-related risks are Technology KPIs are often seen as a static snapshot, where
usually aggregated under the wrong categories such in reality, they reveal structural exposure in payment and
as "financial risk." This lack of specification can mask banking issues. This is where the vulnerabilities add up,
huge inefficiencies: who is actually holding your funds, even when daily operations appear stable.
and whether that entity is properly licensed and autho-
rized to do so. Downtime metrics, security incidents, and integration fail-
ures all reflect how systems are built, who controls them
• Provider license and safeguarding risk: To truly as- and under what conditions they can be relied upon. When
sess payment risk, organizations must include KPIs the reader doesn't know where to look, this can be eas-
that also include the evaluation of the financial li- ily ignored … but how comfortable are we really to park
cense of the provider holding the funds. Is it a full critical operations on a provider whose tech we have never
banking license, an e-money institution, an ISO ag- even stress-tested
gregator, a payment institution or money service
business, or some other license in a less regulated • Payment processor downtime and operational dam-
environment? age: If downtime days increase or operational dam-
age from outages grows, the organization carries
Regular metrics should track the safety of the funds integration risk, regardless of how many backup
and the enforceability of the customer protection routes appear on paper. Many companies believe
rights: regulatory standing, capital adequacy, segre- they are resilient because they use orchestration lay-
gated versus pooled funds, audit frequency, etc. ers or multiple gateways.

Without this dedicated KPI, vulnerabilities remain However, these often rely on the same underlying
invisible until they trigger freezes or restrictions. infrastructure or correspondent networks to pro-
Many setups appear diversified through gateways, cess and secure the data. (Often, ISOs, for example,
but funds often route to the same (or under-licensed) usually just aggregate the big acquirer's channels,
entity. Evaluating the license holder proactively which means simply adding more ISOs to the pay-
turns risk management from reactive to resilient. ment mix will not add contingency in case the one
big underlying provider fails).
• Account stability warnings and threats: Frequent
threats of account closure, delayed transfers or • The tech layer risks: Many mid-market fintech pro-
compliance reviews, even without fraud spikes, of- viders rely on the same handful of SaaS/BaaS or
ten signal portfolio reassessment, VAMP penalties, white-label platforms, creating hidden concentra-
cross-border compliance issues, or license or safe- tion even when front-ends appear different. If that
guarding hiccups of the fund holder. These warn- core system faces overload, cyber scrutiny or de-
ings capture symptoms, as the root cause always lies cides to throttle high-risk traffic, access to seamless
in the system architecture and regulatory standing. processing can be disrupted overnight.

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