CASE STUDY

PRIVATELY HELD PREPAID DEBIT CARD PROVIDER

ENTERPRISE-WIDE TRANSFORMATION TO POSITION FOR GROWTH

The Situation

The largest privately held prepaid platform in the US needed to transition its operating methods from those of a startup to those of an industrial strength financial services provider that was positioned for growth. Competition was emerging from prominent players. Two leading private equity sponsors had recently made significant investments. Industry regulators and client advocacy groups were applying pressure. Operational and technical gaps had recently caused service interruptions that negatively impacted customers and overall company performance. Despite established beachheads in community support, philanthropic giving, and social impact, the company’s brand promise and marketing messages had become stale. Yet the opportunity to drive brand relevance and customer growth had never been greater.

ENGAGEMENT

 

OBJECTIVES

Create an enterprise-wide improvement agenda to upgrade talent at all levels.

Drive investment in key marketing and operational capabilities, and install components to the control infrastructure that was prone to weakness and vulnerability.

APPROACH

The renovation work began in finance and focused on implementing personnel, process, and technical improvements to drive financial accuracy and transparency for all stakeholders.

We then applied a methodical approach to assess and diagnose all other administrative and service delivery functions to eliminate any operational friction that was impeding client service and growth.

As we identified improvement opportunities across the organization, we committed them to a structured prioritization process where budget and readiness could be determined.

Observations

  • The finance organization needed a complete renovation – financial projections were inaccurate and board communication was troubled.

  • The technology staffing model was highly dependent on transient staff, resulting in a lack of documentation and consistent institutional knowledge.

  • Technology infrastructure had suffered because of underinvestment.

  • Risk and analytics functions were understaffed.

  • Dissonance between the company and the clients it served needed reconciliation – reconciliation that was long overdue, but that presented an opportunity.

ACTIONS TAKEN

  • Defined the change, reengineering, and revenue diversification agendas to support the company’s goal of becoming a diversified fintech company.

  • Restructured the finance organization and implemented accountability protocols.

  • Disrupted functional silos and facilitated company-wide transparency.

  • Catalyzed the company’s investment in its first enterprise data warehousing infrastructure to facilitate customer insights and targeting.

  • Designed and implemented enhanced data analytics to optimize acquisition funnel performance.

  • This guided spend decisions across working media channels: the company shifted from traditional television to more progressive social media channels.

  • We devised community outreach programs: anti-violence playground clean-ups, neighborhood heroes celebrations, water hand-outs in sanitation-compromised neighborhoods, holiday meals sponsorships, and more.

  • These initiatives created an authentic relationship between the brand and the customer.

  • The result was deepened client understanding and more comprehensive performance management.

  • Our risk and analytics agenda drove deeper insights across the organization.

  • Key metrics improved: net new client acquisition, greater product adoption and increased revenue per client.

OUTCOME

  • A $15MM reduction in operating expenses (17%) through the renegotiation of >80% of all vendor / partner contracts.

  • Improved gross margin performance from 52% to 60%.

  • The community initiatives created a closer, more valuable relationship between the brand and the customer.

  • The expanded relationships with the external investment community secured additional sources of investment capital: $20MM structured credit facility to fund operations and strategic acquisitions

  • The company’s $18MM acquisition of a pay card adjacency.

  • Fulfillment of the board’s ambition to become a diversified fintech company.

  • The company sold to a strategic buyer in 2017.