Channel Risk Assessment

The Untapped Risk in Marketplace-First Brands... Marketplace Dependency Risk — and it quietly compounds as you scale. Here’s the math: 1️⃣ Topline Fragility  If 70–80% of your revenue comes from Amazon, Flipkart, or Myntra... One algorithm tweak, penalty, or policy shift — and your revenue can drop by 30–40% overnight. 2️⃣ Pricing and Margin Squeeze  Marketplaces push for discount parity.  They want the lowest prices and commissions.  You can’t easily raise prices, but your costs (logistics, returns, ads) keep rising quietly. Margin compression isn't a phase. It's structural. 3️⃣ No Consumer Ownership  Even after selling 10,000+ units, you don’t own the customer data.  You can’t remarket. You can’t build loyalty.  You are permanently renting traffic—on someone else’s terms. 4️⃣ Working Capital Traps  Longer payment cycles + return risks = working capital nightmares.  Every rupee stuck in the system delays scale. 5️⃣ Exit Valuation Hit  Brands with over 60% marketplace dependence often get lower valuations.  Investors penalize the "platform risk" by adjusting down the revenue multiple. This is the advice I've seen the smart founders share: - Balance marketplace sales with your own website D2C channel. - Invest in brand-building early—even when marketplace sales look tempting. - Build retention engines (email, WhatsApp) off-platform. - Negotiate smarter platform deals once you have leverage. 📌 What's one thing a founder should do to de-risk their channel dependence? Picture - Inc42 FAB MAVEN

UK - Russia Sanctions - The recently published 29 page UK Office of Financial Sanctions Implementation (OFSI) Threat Assessment focusses on compliance with the U.K.s Russian sanctions but how should a Bank translate this government speak into sanction programme speak. A Banks’ risk assessment should be reviewed and risk categories for customers, products and services including channels, countries and transactions should be updated based on this report. The most important sanctions risk factors identified in the report should then feed into a Banks’ CDD/CRA (Customer Due Diligence/Customer Risk Assessments), TM, Screening and other control upgrades as appropriate. The Threat assessment is useful because it is based on what OFSI is seeing through reporting and investigations and enforcement but goes further and presents its findings through a likelihood lens which suggests activities that range from having a remote chance (0-5%) to being almost certain (95-100%) and therefore the higher the likelihood the greater importance for U.K. FI’s which helps support a risk based approach. For a summary see the chart below.

The payment services sector is evolving rapidly—bringing with it increased financial crime vulnerabilities. The ComplyAdvantage AML Risk Assessment for the Payments Sector provides a detailed examination of emerging risks across different business models and transaction types. It delivers a practical view for #compliance professionals on where threats are intensifying 🌍 Inherent Risk: Geography, Speed & Customer Diversity PSPs inherently carry higher AML/CTF risk due to their structure and function. Key inherent risk drivers include: • Wide and often unverified customer bases • Exposure to high-risk jurisdictions, particularly in cross-border remittances • A lack of long-standing business relationships (many transactions are occasional or one-off) • High transaction volumes with fast settlement speeds • Remote onboarding via digital channels and agent-based distribution networks These factors align with regulatory findings from the EBA and FATF, reinforcing the need for a granular #AML risk assessment framework for PSPs. 🧍 High-Risk Customer Profiles The sector is often used by or caters to: • Non-residents and unbanked individuals • De-risked clients from the banking system • PEPs • High-risk institutional clients such as gambling platforms, crypto exchanges, and crowdfunding service providers This customer segmentation places increased pressure on onboarding controls, ongoing monitoring, and EDD processes, particularly as traditional banking entities continue to exit high-risk client segments. 🧮 Transaction Typologies & Red Flags The report highlights how PSPs are exploited through: • Smurfing (splitting large transactions into smaller ones to avoid detection) • Fund layering through offshore corridors and complex ownership structures • Use of digital wallets and prepaid cards in jurisdictions with weak controls • Movement of funds through shadow intermediaries, creating opaqueness in fund origin and ownership These risks necessitate the deployment of automated transaction monitoring, typology libraries, and real-time behavioural analytics. 🛡️ Sector-Specific Controls Needed such as: • Remote onboarding and digital KYC validation tools • Screening across all agent and sub-agent relationships • Managing the risk of correspondent arrangements (particularly for remittance firms) • Implementing risk scoring at the product, customer, and geographic level The guidance also reinforces the need for risk-based proportionality—not all PSPs are equal, and controls must reflect business models. 📈 Emerging Threats: Tech, Tokens, and Fraud Key emerging threats include: • Use of AI-generated synthetic IDs in onboarding • Fraud typologies blending phishing, money mule networks, and APP fraud • Crypto-enabled payments being used for layering and obfuscation • Increased fraud in BNPL and digital wallets due to insufficient ID checks #financialcrime #regulatory #sanctions ##payments

"Our sales have dropped this year, and we need to do something quick. Distributor sales are down 20%, and we’re scrambling to make up the difference." That was how my first conversation with a client began, and it’s not an isolated incident. Like many companies, they’d leaned heavily on a single GTM channel that had worked well for years—until it didn’t. This wasn’t due to poor planning; it came from a blind spot created by over-optimizing what was working and riding that success as far as it could go. However, over-reliance on one channel can be risky. Here are a few ways it often plays out: - If you’re focused on search or social, one algorithm change or consumer shift could sharply impact your reach and conversions. - If you rely on channel sales with agents or resellers, one staffing change could disrupt your relationship and leave you scrambling. - If you depend on partner motions, an acquisition or leadership shift can send your partnership strategy into uncharted territory. This pattern happens because we get tunnel vision, doubling down on the channels that are working now. While that’s a smart move in the short term, it can blind us to the importance of investing in new channels proactively. If you’re planning for 2025, consider where you might be overexposed. Diversifying now will make your business more resilient against sudden changes. Beyond risk reduction, each new channel adds fresh opportunities to engage your customers, increase resilience, and drive growth.—setting your business up for success in future years. Here are a few examples of the types of readiness factors you need to consider when evaluating new channel motions: Inbound Marketing: 🔸 Marketing infrastructure  (website, marketing automation, CRM integration) 🔸 Content assets mapped to buyer journey stages 🔸 Team capacity for content creation and technical marketing ops Direct Sales: 🔸 Sales team training for direct end-customer engagement 🔸 Sales enablement materials and tools 🔸 Prospecting skills and processes 🔸 Pipeline management expertise Customer Advocacy Program: 🔸 A strong base of happy customers 🔸 Direct customer relationships 🔸 Data to identify potential advocates 🔸 Programs for reviews, recommendations, and referrals #Marketing #GTM #Strategy #Growth