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Secure Cash Storage, Risk Management Solutions

The State of High Risk Industries: Lessons Learned in 2023 Q&A


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November 11, 2023

A: In the dynamic landscape of risk management, lessons are learned every day due to ever-evolving laws and regulations, client experiences, and new technologies. In this Q&A-style blog, we’ll discuss the key lessons OSS has learned in 2023 with Scott Solomon, CEO, and Tim Tofaute, Director of Operations, and how they have influenced the company’s approach to high risk operations in the future.

Q: Explain to us what were the biggest lessons learned in 2023

A: There are three main lessons learned and these fall into three key areas: state banking, cash in transit, and risk management.
Banking: State banking is a hot topic in high risk industries such as cannabis due to the proposed acts that continue to fail in addition to Mastercard revoking the cannabis industry’s ability to utilize its services. This repeated failure has put incredible pressure on business owners and has forced these already high risk areas to handle their money in cash, an avenue that, without the right protection and support, is incredibly dangerous, however, at this time, the most compliant payment process is cash.

Cash in Transit: Another vital lesson that was learned in 2023 is the incorporation of effective cash-in-transit (CIT) offerings, especially when it comes to technology. While the concept of CIT is not new, quality of service, advanced technology, and competitive pricing are. Operations within the high risk sphere should not be pigeonholed into using expensive and generic CIT options, which is why finding a flexible cash management partner that is founded upon proven security protocols and can anticipate a wide scope of potential threats through tailored technology is vital.

Risk Management: Recently, a 2022 retail theft survey was published explaining the areas where the largest thefts occur.

According to the study, companies polled for the survey estimated that retail theft accounted for 37% of those losses, and employee or internal theft was up at 28.5%. We are doing the right thing for our clients by always being transparent. Don’t skimp on compliance!

Q: Can you share specific instances from this year where OSS encountered new challenges or scenarios within risk management that added depth to your understanding of evolving trends?

A: One thing we noticed becoming a trend in this industry is competitors dropping prices, but also dropping the level of customer service and expertise provided to clients. Subcontractors have become a popular tactic for competitors in this space, however, while outsourcing to more contractors could reduce overhead costs for the operation, the level of industry expertise is simply not there anymore. So, while this new trend is happening all around us, we make it a priority to ensure OSS never falls into this cycle and always provides clients with the expert care they deserve.

Another trend we are seeing that has posed challenges is the adjustment of rates. It is becoming increasingly popular for competitors to rope in a client with a specific, low number. However, once the invoice is sent, it is not at all what was discussed. There are hidden admin fees, subcontractor fees, and more. This is very upsetting to us and reminds us that we are doing the right thing for our clients by always being transparent.

Q: What is OSS doing to help the high risk industry move forward?

A: This year, we have worked closely with the National Credit Union Administration to help form the establishment of standards for high-risk businesses. With this, we discuss options with specific branches, ensure the education and safety of employees and the business, as well as ease the complexity of this convoluted and ever-changing industry for bank employees.

Q: Given the rapidly changing nature of the industry, what unexpected developments or trends in 2023 have significantly impacted OSS’s strategies and solutions?

A: As discussed above, OSS faced unexpected challenges from competitors outsourcing everything, leading to a race to the bottom in pricing. This highlighted the need for innovation and standardization. The emergence of new markets on the East Coast also prompted OSS to educate clients on risks associated with cash transactions and work within bank caps for in-branch deposits, taking examples from other areas of the country and learning what worked and what did not.

Q: Can you share any collaborative discussions, initiatives, or partnerships in 2023 that have contributed to OSS’s collective knowledge and expertise?

A: The PBC Conference in Washington DC in September provided a platform for OSS to collaborate with different organizations and individuals related to our core business line. Discussions on security in a cash-intensive marketplace resonated with fellow CIT companies, high risk business owners, and consultants. This collaboration emphasized the importance of compliance, risk management, and safety in refining OSS’s strategies.

Q: What were some of the most memorable conference or panel topics this year and why?

A: The PBC Conference in Washington DC stood out as a unique platform bringing together diverse organizations related to OSS’s core business. Our panel on “Security & Cash Management for Cannabis-Related Businesses and Financial Institutions” generated substantial interest, with follow-up discussions emphasizing the need for continuous conversation on compliance, risk management, and safety.

At the conference, we were also awarded the award of Top Business Solutions Company, an incredible honor that helps build that extra layer of trust for our clients.

Q: As leaders in the industry, how has OSS translated the challenges of this year into opportunities for innovation and enhancement of your services?

A: People who first meet the OSS team, today, often don’t realize that our company started as security consultants. While CIT for high risk businesses is our specialty, we didn’t realize what our unique CIT model could provide to the industry until we took the time to ask our clients, “What we could do to enhance our business relationship?” So, we launched our CIT program as a way to help address our client’s challenges after we had already been serving them for a couple of years.

This year has been no different. We have regular check-ins with all of our clients that reveal the need for more ways to enhance compliance, safety, and profitability. Some of the options we generated, included SmartSafes and Cash Recyclers, new E-Commerce options, an online web portal, collaboration with the Federal Reserve Banking system to pilot test their new e-manifest system that will eliminate paper-based transactions and finally, free compliance site visits to all new customers.

Q: To conclude, what is your number one tip based on events in 2023 for keeping high-risk businesses and employees safe?

A: Don’t skimp on compliance! Your employees are your most valuable resource. Invest in your staff through education, training, and better equipment, and have meaningful conversations that help you check for understanding. A robust compliance program enhances safety, efficiency, and sustainable profitability.

Ready to learn how OSS can help you securely optimize your cash management operations while remaining compliant? Speak with one of our experts.