Shield Compliance Unveils Insights on Cannabis Banking Needs
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Insightful Findings on Cannabis Banking from Shield Compliance
At the recent PBC Conference, Shield Compliance, known for its leading compliance platform in the cannabis banking sector, presented critical findings from their annual survey. This survey focused on the experiences of licensed cannabis operators and their interactions with financial institutions (FIs).
Understanding the Cannabis Market
The landscape for cannabis operators is rapidly changing as regulations and societal attitudes evolve. It's crucial for financial institutions to grasp the specific needs and concerns of these operators in order to provide effective solutions that align with regulatory standards. FIs must cater not only to the operators but also respect the expectations of their boards and the stability of their own balance sheets.
Technology Integration as a Solution
According to Tony Repanich, the President and CEO of Shield Compliance, integrating technology that compiles data can significantly alleviate the compliance responsibilities imposed on financial institutions. This technology offers a consistent experience for operators, thus enhancing satisfaction and trust. He noted that a comprehensive guide is available to assist bankers in navigating the complexities of serving the cannabis industry, establishing compliant operational frameworks, and tapping into the financial advantages present in this burgeoning market.
Key Survey Findings
Some notable results from the survey reveal a dichotomy between satisfaction with customer service and the willingness to recommend FIs:
- Over 83% of participants reported satisfaction with customer service; however, many are hesitant to recommend their banking partners to other cannabis-related businesses.
- A little over half (54%) expressed contentment with the service offerings, while 53% cited dissatisfaction with fees and charges.
- For operators, cash flow consistently ranks as a primary concern, with profitability and access to credit following closely. The most sought-after banking products include operating lines of credit (79%), equipment financing (72%), and real estate loans (67%).
- Interestingly, nearly 80% of operators anticipate that the profitability of the cannabis industry may remain stable or improve in the next few years. Furthermore, potential changes in tax regulations could significantly enhance cash flow for cannabis-related businesses, positioning them as more appealing clients for financial institutions.
The Importance of Sector Understanding
The survey findings demonstrated that licensed operators wish their financial institutions had a better grasp of the cannabis industry. With the survey participants mainly divided into 60/40 between wholesale and retail license holders, the survey highlighted that 80% felt that their FI had some understanding of their business. Yet, FIs were only rated 63% in terms of their overall understanding of the sector, a drop from previous years. Hence, there's a clear opportunity for enhancement.
Opportunities for Financial Institutions
Erin O'Donnell, co-founder of the American Cannabis Bankers Association, remarked on the necessity for extensive training and certification to bridge the knowledge gap evident in the industry. She identified this as an exceptional opportunity for financial institutions to deepen their relationships with clients and gain a competitive edge amidst increasing competition.
Data for this year's survey was gathered from financial decision-makers representing over 125 licensed operators across the U.S.
About Shield Compliance
Shield Compliance revolutionizes how financial institutions engage with the legal cannabis market. Their specialized BSA/AML compliance management software is designed specifically to ease compliance burdens, streamline processes using multiple data sources, and foster higher efficiencies. This innovative software enables real-time monitoring and offers robust reporting capabilities, setting high standards for compliance excellence within the cannabis banking world. To learn more about Shield Compliance, visit their website.
Contact Information
For inquiries, please reach out to Samara Villasenor at 425-255-0890.
Frequently Asked Questions
What were the main findings of the Shield Compliance survey?
The survey revealed that while most respondents are satisfied with their banking services, many are reluctant to refer others to their banks due to dissatisfaction with fees and service offerings.
How does technology integration affect cannabis banking?
Integrating technology helps streamline compliance processes, providing a smoother experience for cannabis operators and financial institutions alike.
What are the key concerns of cannabis operators in banking?
Operators are primarily concerned with cash flow, profitability, and access to credit, with particular interest in operating lines of credit and equipment financing.
How does the cannabis industry's profitability outlook look?
Most operators expect the profitability of the cannabis industry to remain steady or improve, anticipating positive changes with potential tax code updates.
What role does training play in serving the cannabis market?
Comprehensive training is vital for financial institutions to address the knowledge gap and improve their service offerings to cannabis operators.
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