02.07.2024 | Kurt Jäger

Profit & Compliance, Compliance & Profit, go hand in hand like a Möbius Strip!

  • Profit Streams

Imagine you could not only fulfil legal requirements, but also find new ways to increase your profits.

If you want to make money from your product, you must comply with regulations to do so. Complying with regulations also allows you to make profits from your product.

Let’s start with a story: Years ago, I was head of development for a business intelligence tool called Siron®. Our customers used it to extract information from their operational data sets.

9/11 then had a disruptive impact on their compliance. The supervisory authorities wanted to see IT-supported money laundering checks at banks. At that time, customers from this industry came to us to support them.

This resulted in a series of software products:

  • Firstly, SironAML®, which provided the money laundering officer with a manageable number of suspicious customers daily. Compliance with BaFin requirements thus became a new application product. Other supervisory authorities around the world generate variants of this on-premise solution.
  • SironEmbargo® followed another legal regulation, where foreign payment transactions were to be checked for OFAC and EU embargoes. SWIFT transactions were checked and, if suspicious, stopped for manual checking.

Today, this has become the Siron® Compliance Platform. Nine different product components for case and alert management, all based on compliance rules that customers can now follow more easily.

Software Profit Streams

Why am I telling this story? Because a few years later I consulted on the Profit Streams™ software, which can be used to continuously optimise the profit of solutions.

Profit Stream Canvas

Sustainability and profit are brought into a context that uses a Profit Stream Canvas™ to bring the various influencing factors for optimizing customer benefits and solution portfolios into an actively controllable context in which compliance represents a segment.

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Customer Value

It starts at the top left with the Customer Value of my solution, for German banks e.g. with:

Tangible:
  • Avoiding being part of criminal money laundering, in Germany  100 billion €
  • Avoiding  a § 44 check, which results in six-figure costs
  • Customers' money is not frozen in a non-European legal area
Intangible:
  • Loss of reputation due to press releases about the bank or its customers.
  • Exclusion from international tenders.
  • Operational data is improved in quality.

 

Customer ROI

  • What are the total cost of ownership for the solution?
  • Data must be provided, on site (hardware, operating system, DWH) or in the cloud (e.g. AWS et al.)
  • Number of employees who operate and support the solution

This is followed by customer licensing, i.e. how the licence conditions are structured and which terms of use apply to the customer.

 

Solution

  • What features does my solution have, depending on the legal requirements?
  • What is my ROI for the solution.
  • What products do I use and how can I license them.

The middle collumn of ​​the Profit Stream Canvas™ describes the sustainable bridge between the two columns of Customer and Solution.

  • How is the Value Exchanged, how I change value for money?
  • What is my Pricing by strategy, structure, specifics and policies?
  • What kind of Pricing Engine do I have to ensure sustainable business?
  • Compliance; how do I respect external social stakeholders?

 

Compliance

In our example, compliance has an accelerating effect on

  • Customer Value   
  • Generating new Solutions

Legally compliant products: The key to new profit opportunities

Our Profit Stream - Trainings

  • Profit Streams™ Software Pricing Fundamentals Training

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  • Profit Stream™ Design

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