The GS Bank is a fictional diversified financial services provider listed in South Africa. The bank offers a wide variety of products and services covering personal and business banking, credit cards, corporate and investment banking, wealth and investment management, and short- and long-term insurance. It has a wide footprint across the African continent including branch networks and subsidiary banks in Kenya, Egypt, Nigeria, Malawi, Zambia, and Tanzania. 

The GS Bank has recently announced the purchase of an "innovative banking solution" from an app development company called Me, My Apps & I (Pty) Limited. The My GS Bank application leverages Ethereum blockchain technology and a newly developed cryptography algorithm. This algorithm allows consumers to transfer funds to any other user of the application instantaneously, irrespective of their location, with almost no transaction costs. Consumers can transfer money from any account into "whisps" (the common token across the system). The whisps then move through the blockchain, with the option of being converted into local currency. Converting the currency requires access to either a GS Bank branch or an ATM.

There are certain requirements for being able to use this product. The My GS Bank product is only offered to new and existing clients of the bank and its subsidiary banking partners. A minimum account balance of R10 (or equivalent) is required to use the product. New clients will automatically be registered to use the app (with an option to opt out), while existing clients will have to request access. Making use of the product will incur a fee of R3.50 per month for private persons, while the pricing for businesses is variable but capped at a maximum of R2,000 per month. 

For private persons, a transaction fee (of 1%) and a limit of R10,000 or equivalent is levied for the conversion of whisps to a local currency. No charge will be levied for the initial conversion to whisps or for any account-to-account transfer. It is proposed that a transfer limit of R15,000 (or equivalent) of whisps be set, but that there be no limit on the purchase of whisps. Customers will receive additional whisps on a monthly basis, similar to interest on a savings account, as well as other rewards for using the platform. 

For businesses, the limit for conversion from whisps to local currency is greatly increased to R150,000 (or equivalent) in a single transaction or conversion, with a limit of R1 million per month. Additional permissions are required for any conversion greater than these thresholds. The 1% transaction fee is charged for any conversion of whisps into local currency. 

To facilitate initial interest in the new product, there will be an onboarding incentive granted to salespeople within the bank. It is yet to be decided exactly what the incentive will be and how it will operate in practice, but two options have been suggested: Either there will be a common bonus pool that will be proportionally allocated on a quarterly basis, or there will be a per-client sign-on bonus. 

Imagine that you are a compliance consultant who has been asked to provide insight on and advice for the new-product-approval committee of GS Bank. The committee requires you to give feedback on the following questions:

• Which function should be responsible for the employee sales incentive scheme: The risk function, or the compliance function?
• Do the new product and incentive schemes pose any sort of reputational risk?