Business

COVID-19: Luigi Wewege discusses risks to the Global Banking System

Published

5 years ago

March 23, 2020

A well-known figure in private offshore banking shares his views with us on the potential impact of COVID-19 on the global banking system as well as current investor sentiment. Luigi Wewege, Senior Vice President and Head of Private Banking at Caye International Bank in Belize discussed the situation with reference to several scenarios that investors could and should anticipate.

Regarding liquidity and stress tests, Wewege says that “Overall, United States and European based banks have showed reasonable improvement since the last financial crisis around 2008 however Europeans in particular do remember what happened with bail-ins and bailouts so you do see a lot of investor concern with what the European Central Bank might do next.”

When asked about some of the biggest concerns facing investors, Luigi noted that “There has been huge inflows of capital into the USA during the Trump administration. But now, people are a bit concerned about how far FEMA measures will go. People who have put large portfolios in either the USA or Europe are rethinking whether their safe-haven decision was the correct one. The Fitch Ratings agency already warned that the Italian banking system may struggle to cope with the fallout of the Coronavirus – and yes, it was not in a particularly good shape even prior to this. You also have countries like Greece that risks sliding straight back into a deep recession. So overall, investors do feel uneasy about the EU and US right now.” He went on to explain the various indicators that were taken into consideration during February plus March 2020 and said “Bank shares in Europe and the United States saw a very sharp repricing and decline. Government bond yields are falling, with US corporate high yields shooting up. This all shows that investor confidence in the global financial system has been shaken.”

Elaborating more on the scenario in Europe, Wewege believes “With such a substantial socio-economic shock unfolding in front of us, the brightest of financial analysts find it hard to see how Banks in the most affected European countries can maintain good assets and earnings. If repayment of loans ceases in the case of many European families – toxic assets becomes a big risk to them very quickly.”

About IMF policies during these challenging times, Luigi says “In fairness, the International Monetary Fund acted quickly to help countries during the time of Ebola, but that was a much smaller issue than what we face today. We know that given the huge spike in uncertainty that some in the IMF are proposing that there is a consensus worldwide to have a common monetary policy – and that will hopefully prevent a scenario where some currencies end up being the losers in Black Swan events. Yet all these instruments have their limits and at some point, it will come right back to the question of liquidity. That’s precisely why so many middle income to HNWI’s have allocated a decent portion of their portfolios to offshore banks that do not face the same exposure and risk that European and USA based banks do.”

Wewege went on to explain common risks that each individual country may face in the immediate future and aftermath of COVID-19: “A reduction in revenue and productivity may affect many countries – it is already doing so with disrupted supply chains and right now more borders are shutting. Then we have crippled public health systems in Europe who will need to consume a lot of public funds/stimulus in order to continue. Then off course there is one word that scares just about every European country and US state: Tourism. It is an important sector that is showing early signs of major strain that will likely continue for many more months. All these risks add up and will cause great strain on the global economy for the duration of 2020 and possibly even into 2021.”

On the ongoing appeal for offshore banking, Luigi says “Investors from all over the world gained a lot of respect for jurisdictions, like ours in Belize, where our banks were largely untouched by the 2008 financial recession. And yes – they certainly remember what happened to some large banks in Europe and the USA at the time and thus feel the writing is on the wall, whether it is indeed the case or not. Although we cannot predict accurately what the state of the global banking system will hold especially in Western countries, we can see a clear shift towards diversification and the start of more deposit inflow at offshore financial institutions like ours in Belize.”

Sound off:

Some may argue that the Dodd-Frank law that was passed in 2010 rendered the United States a less of a risk today than it was around 2008 and doomsayers who closely watch the Italian, French and Greek economies may have a point that the worst is still to come. Ultimately, these are very challenging times and to some extent, unchartered territory for the global financial system dealing with the Coronavirus pandemic.

Business

High Volume, High Value: The Business Logic Behind Black Banx’s Growth

Published

2 weeks ago

June 16, 2025

Matthew Wiles

In fintech, success no longer hinges on legacy prestige or brick-and-mortar branches—it’s about speed, scale, and precision. Black Banx, under the leadership of founder and CEO Michael Gastauer, has exemplified this model, turning its high-volume approach into high-value results.

The company’s Q1 2025 performance tells the story: $1.6 billion in pre-tax profit, $4.3 billion in revenue, and 9 million new customers added, bringing its total customer base to 78 million across 180+ countries.

But behind the numbers lies a carefully calibrated business model built for exponential growth. Here’s how Black Banx’s strategy of scale is redefining what profitable banking looks like in the digital age.

Scaling at Speed: Why Volume Matters

Unlike traditional banks, which often focus on deepening relationships with a limited set of customers, Black Banx thrives on breadth and transactional frequency. Its digital infrastructure supports onboarding millions of users instantly, with zero physical presence required. Customers can open accounts within minutes and transact across 28 fiat currencies and 2 cryptocurrencies (Bitcoin and Ethereum) from anywhere in the world.

Each customer interaction—whether it’s a cross-border transfer, crypto exchange, or FX transaction—feeds directly into Black Banx’s revenue engine. At scale, these micro-interactions yield macro results.

Real-Time, Global Payments at the Core

One of Black Banx’s most powerful value propositions is real-time cross-border payments. By enabling instant fund transfers across currencies and countries, the platform removes the frictions associated with SWIFT-based systems and legacy banking networks.

This service, used by individuals and businesses alike, generates:

Volume-based revenue from transaction fees
Exchange spreads on currency conversion
Premium service income from business clients managing international payroll or vendor payments

With operations in underserved regions like Africa, South Asia, and Latin America, Black Banx is not only increasing volume—it’s tapping into fast-growing financial ecosystems overlooked by legacy banks.

The Flywheel Effect of Crypto Integration

Crypto capabilities have added another dimension to the company’s high-volume model. As of Q1 2025, 20% of all Black Banx transactions involved cryptocurrency, including:

Crypto-to-fiat and fiat-to-crypto exchanges
Crypto deposits and withdrawals
Payments using Bitcoin or Ethereum

The crypto integration attracts both retail users and blockchain-native businesses, enabling them to:

Access traditional banking rails
Convert assets seamlessly
Operate with lower transaction fees than those found in standard financial systems

By being one of the few regulated platforms offering full banking and crypto support, Black Banx is monetizing the convergence of two financial worlds.

Optimized for Operational Efficiency

High volume is only profitable when costs are contained—and Black Banx has engineered its operations to be lean from day one. With a cost-to-income ratio of just 63% in Q1 2025, it operates significantly more efficiently than most global banks.

Key enablers of this cost efficiency include:

AI-driven compliance and customer support
Cloud-native architecture
Automated onboarding and KYC processes
Digital-only servicing without expensive physical infrastructure

The outcome is a platform that not only scales, but does so without sacrificing margin—each new customer contributes to profit rather than diluting it.

Business Clients: The Value Multiplier

While Black Banx’s massive customer base is largely consumer-driven, its business clients are high-value accelerators. From SMEs and startups to crypto firms and global freelancers, businesses use Black Banx for:

International transactions
Multi-currency payroll
Crypto-fiat settlements
Supplier payments and invoicing

These clients tend to:

Transact more frequently
Use a broader range of services
Generate significantly higher revenue per user

Moreover, Black Banx’s API integrations and tailored enterprise solutions lock in these clients for the long term, reinforcing predictable and scalable growth.

Monetizing the Ecosystem, Not Just the Account

The genius of Black Banx’s model is that it monetizes not just accounts, but entire customer journeys. A user might:

Onboard in minutes
Deposit funds from a crypto wallet
Exchange currencies
Pay an overseas vendor
Withdraw to a local bank account

Each of these actions touches a different monetization lever—FX spread, transaction fee, crypto conversion, or premium service charge. With 78 million customers doing variations of this at global scale, the cumulative financial impact becomes immense.

Strategic Expansion, Not Blind Growth

Unlike many fintechs that chase customer acquisition without a clear monetization path, Black Banx aligns its growth with strategic market opportunities. Its expansion into underbanked and high-demand markets ensures that:

Customer acquisition costs stay low
Services meet genuine needs (e.g., cross-border income, crypto access)
Revenue per user grows over time

It’s not just about acquiring more customers—it’s about acquiring the right customers, in the right markets, with the right needs.

The Future Belongs to Scalable Banking

Black Banx’s ability to transform high-volume engagement into high-value profitability is more than just a fintech success—it’s a signal of what the future of banking looks like. In a world where agility, efficiency, and inclusion define competitive advantage, Black Banx has created a blueprint for digital banking dominance.

With $1.6 billion in quarterly profit, nearly 80 million users, and services that span the globe and the blockchain, the company is no longer just scaling—it’s compounding. Each new user, each transaction, and each feature builds upon the last.

This is not the story of a bank growing.

This is the story of a bank accelerating.