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Operator-led Model

In an operator-led model in the financial services industry, there are two primary entities involved: the Operator and the Solution Provider. The Operator is a licensed holder that holds the necessary regulatory licenses and is authorized to conduct financial services in a specific geographic location. The Solution Provider is a technology, sales, and marketing company that wishes to offer a financial product or service using the Operator’s license.

The Solution Provider is responsible for developing and maintaining the technology infrastructure that supports the business, as well as creating marketing campaigns and materials to promote the financial products or services. The company may also manage the sales process, including interacting with clients and processing transactions.

On the other hand, the Operator is responsible for the operational aspects of the business, such as client onboarding, regulatory compliance, and the custody of client funds. This includes conducting Know Your Customer (KYC) and Know Your Business (KYB) checks to verify the identity and background of clients, ensuring compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations, and managing the safekeeping of client funds.

By dividing responsibilities in this way, the operator-led model allows the Solution Provider to focus on its core competencies in technology, marketing, and sales, while the Operator handles the regulatory and operational requirements of the business. This can enable the financial services business to operate more efficiently and effectively, while also reducing the risk of regulatory non-compliance. The arrangement in which the Operator handles the operational aspects of the business and the Solution Provider focuses on technology, marketing, and sales is referred to as an operator-led model.

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This page was last updated on January 4, 2023.