Business

5 Best Practices for Operational Risk Management

Published

3 years ago

June 14, 2023

Managing risk prevents procedural failures from becoming tangible losses, like regulatory fines, penalties, and reputational loss. Operational risk management (ORM) protects your organization from potential threats and lessens the impact of an event, should one occur. This process involves detecting, analyzing, and mitigating risks, along with improving outcomes through better decisions.

Since risk is an inherent part of doing business, and human error is unavoidable, it’s necessary to have a strong operational risk management strategy.

Here are the 5 best practices for managing operational risk in your company.

Use risk management software

Workiva highlights how an operational risk management tool is the first thing you need to successfully manage risk. It can be extremely difficult to thoroughly assess and mitigate risk manually because there are far too many nuances and details to track. Plus, some tools provide automation to support your needs. The right tool will provide you with a plethora of financial reporting options, compliance integrations, and will connect your data from multiple sources to make your risk-based decisions more accurate.

These days, manual data management is nearly impossible. When it comes to key risk indicators (KRIs), you can’t afford to make mistakes. By using an operational risk management tool, you’ll reduce preventable oversights and mistakes, which will help you better manage risk.

Accept risk only when the benefits outweigh the potential cost

Unnecessary risks don’t provide significant value to a goal. It’s never a good idea to take on unnecessary risk because the cost can be devastating. Unfortunately, many people, especially entrepreneurs, have a personal bias that distorts judgment and limits critical analysis.

What makes a risk unnecessary? It’s not the level of the risk that determines whether it’s worth taking, but rather, the potential benefits. Your organization might be fine taking on high risk if the benefits will outweigh the cost, both financially and otherwise.

Regardless, all major risks should be cleared by senior management and stakeholders first.

Address risk at the appropriate level

Decisions will be made at every level across your organization, so make sure risk decisions are made by the right people. For instance, employees shouldn’t be making decisions that have the potential to seriously impact the company, and managers need to ensure their employees have a strong understanding regarding how much risk they can bear and when to escalate a situation to a higher-up.

Plan ahead for remediation

Part of operational risk management involves planning. The decision makers in your organization should be incorporating ORM into business processes, which requires time and resources. However, this should be part of every planning and execution phase.

Categorize and prioritize your risks

You’ll need to categorize and prioritize your risks to get a good idea of what actions you should take and decisions you should make. This is done with a control matrix in five basic steps:

Identify your risks before conducting your assessments
Measure risk probability
Assess the potential impact
Calculate total risk
Update your control matrix accordingly

Within your risk control matrix, you’ll be prioritizing risks from the following categories:

People risk. These are risks caused by people and human resources management. For example, hiring the wrong people, improper training, unmotivated team members, and high turnover rates often result in errors, fraud, and other ethical actions that can harm your organization.
Systems risk. When internal systems fail, losses can be devastating. This can include the loss of backups, downtime for networks, and other technical errors.
Process risk. When internal business processes are inadequate, your business can suffer. This includes things like product design flaws and failure to meet project deadlines or deliver projects to a client’s specifications.
External events risk. These risks are out of your control, like storms, floods, hurricanes, fires, and even manmade problems like robberies, terrorist attacks, and wars.
Legal compliance risk. When your business fails to comply with internal and external compliance regulations, the risks are great. These issues often involve tax and financial accounting regulations, internal ethical codes of conduct, and any other regulations imposed by a regulatory body governing your industry.

Operational risk management is critical for success

There are many ways to make a business successful, but if you don’t manage risk, one error or incident can tear down all your hard work. The best way to manage risk is to avoid it whenever possible. However, you can’t avoid all risk, and that’s where strategic risk management comes into play. Choose the risk you’re willing to accept, mitigate the potential consequences, and continue fine-tuning your decision-making process to respond better to similar risks in the future.

Business

Inside the $4.3B Quarter: What’s Fueling Black Banx’s Record Revenues

Published

6 hours ago

January 16, 2026

Matthew Wiles

Every quarter brings fresh headlines in fintech, but few make the kind of impact achieved by Black Banx in Q2 2025. The Toronto-based global digital banking group, founded by Michael Gastauer, reported an extraordinary USD 4.3 billion in revenue and a record USD 1.6 billion in pre-tax profit, while improving its cost-to-income ratio to 63%.

These results not only highlight the company’s operational efficiency but also mark a pivotal moment in its journey from challenger to global leader. The big question is: what’s fueling such impressive financial performance?

Customer Growth as the Core Driver

One of the clearest engines of revenue growth is Black Banx’s expanding customer base. By Q2 2025, the platform had reached 84 million clients worldwide, up from 69 million at the end of 2024. This 15 million net gain in six months demonstrates both the attractiveness of its services and the scalability of its model.

Unlike traditional banks, which rely heavily on branch expansion, Black Banx leverages digital-first onboarding that allows customers to open accounts within minutes using just a smartphone. This approach is especially effective in regions underserved by legacy institutions, where access to affordable financial tools is in high demand.

More customers don’t just mean higher transaction volumes—they generate a compounding effect where network size, brand trust, and service adoption reinforce one another.

Real-Time Payments and Cross-Border Solutions

A major contributor to Q2 revenues is the platform’s real-time payments infrastructure. Black Banx enables instant cross-border transfers across its 28 supported fiat currencies and multiple cryptocurrencies, helping both individuals and businesses bypass the traditional bottlenecks of international banking.

For freelancers, SMEs, and multinational clients, this means faster liquidity, reduced foreign exchange costs, and simplified global operations. The demand for real-time financial services is growing rapidly—Juniper Research projects global real-time payments turnover to hit USD 58 trillion by 2028—and Black Banx is strategically positioned to capture a significant share of this market.

Crypto Integration as a Revenue Stream

Another key revenue driver is crypto integration. While many traditional institutions remain hesitant, Black Banx embraced digital assets early and has built infrastructure to support Bitcoin, Ethereum, and the Lightning Network. In Q2 2025, 20% of all transactions on the platform were crypto-based, reflecting strong customer appetite for hybrid banking services that bridge fiat and digital assets.

Revenue comes not only from transaction fees but also from value-added services like crypto-to-fiat conversion, staking yields (4–12% APY), and blockchain-enabled payments. For customers in markets with unstable currencies, these services act as a financial lifeline, further expanding the platform’s relevance.

AI-Powered Efficiency and Risk Management

Record revenues would be less impressive if costs ballooned at the same rate. But Black Banx has proven adept at balancing growth with efficiency. Its cost-to-income ratio improved to 63% in Q2, down from 69% a year earlier, thanks to heavy reliance on AI-powered automation.

AI now drives fraud detection, compliance, and customer onboarding—areas where traditional banks often struggle with cost inefficiencies. By automating these processes, Black Banx can process millions of transactions securely while maintaining profitability at scale. This level of efficiency is rare in fintech, where high growth often comes at the expense of margins.

Regional Expansion and Untapped Markets

Geography also plays a role in fueling revenues. Much of the Q2 growth came from Africa, South Asia, and Latin America—regions where demand for mobile-first banking continues to soar. In 2024 alone, Black Banx reported a 32% increase in SME clients from the Middle East and Africa, signaling the strength of its positioning in underserved markets.

By extending services to populations previously excluded from formal banking—migrant workers, rural communities, and small businesses—Black Banx taps into vast pools of latent demand. The strategy proves that financial inclusion and profitability are not mutually exclusive but mutually reinforcing.

Diversified Revenue Streams

Another factor behind Q2’s record revenues is Black Banx’s diversified business model. Income is not tied to a single service but spread across multiple streams, including:

Transaction fees from cross-border transfers and payments.
Crypto trading and exchange services.
Premium account features for high-net-worth clients.
Corporate services for SMEs and international businesses.

This diversification insulates the company against volatility in any single segment, creating stable revenue growth even in shifting market conditions.

Michael Gastauer’s Strategic Blueprint

Behind these results is Michael Gastauer’s long-term strategy: scale aggressively but with efficiency, innovation, and inclusion at the core. His vision has always been to create a borderless financial ecosystem, and Q2 2025’s performance is evidence that this vision is not only achievable but sustainable.

By balancing mass-market accessibility with premium features, and by blending fiat with digital assets, Gastauer has positioned Black Banx as a category-defining player in global finance.

The Road Ahead: Toward 100 Million Clients

Looking forward, the company’s goal of reaching 100 million customers by the end of 2025 will likely be the next catalyst for revenue growth. More customers mean more transactions, more data insights, and more opportunities to refine and expand its service offering.

If current momentum holds, the USD 4.3 billion quarterly revenue milestone could be just the beginning of an even larger growth story. The challenge will be ensuring systems scale securely while maintaining trust in an environment where privacy and compliance are paramount.

A Record That Signals More to Come

Black Banx’s Q2 2025 performance—USD 4.3 billion in revenue, USD 1.6 billion in pre-tax profit, 84 million clients worldwide, and a lean 63% cost-to-income ratio—is more than a financial milestone. It is a signal of how the future of banking is being rewritten by platforms that are borderless, crypto-inclusive, and data-driven.

What fueled this record-breaking quarter is not one innovation but a combination of strategies—scalable onboarding, real-time payments, crypto integration, AI efficiency, and expansion into underserved regions. Together, they form a model that doesn’t just challenge traditional banking but actively builds the foundation for global dominance.

For Black Banx, the road ahead is clear: the $4.3 billion quarter is not an endpoint but a launchpad for even greater scale and profitability.