Security & Safety

Configuring risk levers in embedded finance

Matching risk appetite to risk tolerance

Microservices isn’t a new concept to those familiar with SaaS and modern technology platforms. According to AWS, monolithic architectures add risk because many dependent and tightly coupled processes increase the impact of a single process failure. Microservices, on the other hand, make it easier and faster to develop new features and functionality.

When it comes to financial services, we’ve learned that this level of configuration through microservices is incredibly valuable to enterprise clients because no target market or use case is the same. The Alviere HIVE technology platform is designed to allow each enterprise client to have a fully configurable program, with risk levers and rules to meet end-customer expectations and business risk tolerance. 


Determining the right risk levers

The way Alviere works with enterprise clients to configure risk levers for a promotional gift card program, for example, could vary greatly from those of a neobank solution. Know Your Customer (KYC) and identity verification requirements, fraud risk, and Anti-Money Laundering (AML) transaction monitoring rules are materially different for each solution. Plus, a transaction or customer AML risk profile that is unusual for one program may be perfectly normal for another. Each unique program should have rules that are tailored to fit, so that Alviere’s compliance and fraud prevention teams can effectively monitor for unusual and suspicious activity.


Compliance can’t be monolithic

For risk and compliance, there are three downsides to a one-size-fits all platform configuration:

  • Limiting the ability to deliver an optimal user experience. 

  • Creating chaos and unwarranted work for compliance and risk teams.

  • Failing to meet regulatory expectations with a risk-based approach, where controls are commensurate with the use case.

The result of these three factors? A weak compliance program where efforts are not focused on where the true risks lie, and a subpar customer experience. 


Expert guidance for compliance configuration

Alviere practices risk-based compliance management by identifying and prioritizing the highest compliance and security risks your organization faces, then taking appropriate steps to manage those risks in order of importance. Alviere is a licensed, regulated entity in every state in the United States, and in Puerto Rico and Canada, which provides more control and flexibility over any financial programs we enable and operate. The Alviere team guides clients through the daunting process of defining and setting appropriate compliance and risk configurations and rules into financial programs that meet their risk tolerance.

There are hundreds of levers within the Alviere HIVE platform that are configured, monitored, and updated for each independent client program.  This flexibility allows Alviere to help enterprise clients build the ideal user experience and, at the same time,  ensure their organization is better protected against reputational damage. 


More licenses, more levers

Regulatory licenses provide a crucial safety system that helps ensure embedded finance providers have a safe and reliable operation as approved and supervised directly by regulatory authorities. In contrast, unregulated providers are not directly approved or supervised by regulators, and therefore don’t provide the level of assurance for the enterprise delivering financial tools and services, which can leave customer relationships, business assets, and brand reputation at risk.   

Learn more with the Buyers Guide: Key Considerations in Selecting an Embedded Finance Provider. Reviewing the Security, Compliance & Licensing is critical when evaluating potential vendors. If you’re interested in learning more about how risk levers impact the success and longevity of client programs, connect with an Alviere expert to learn more.

Written by Alviere