As the curtains close on yet another year of conversations, connections and networking with the very best in the financial industry, we take a look back at the key takeaways from the final day of the best fintech show around.
The Wirecard scandal: how the biggest fraud in German history happened
Once a leading payment processor based in the German city of Munich, Wirecard is now the poster child for the nation’s biggest ever fraud scandal.
What started with a meteoric rise to becoming one of Germany’s fastest growing fintech firms, ended spectacularly in 2020 with nearly €2bn unaccounted for, a COO on Interpol’s most wanted list, and on ongoing criminal trial into reports of forgery, embezzlement, bogus transactions and fraud.
In a fascinating session with Prove Identity’s fraud and cybercrime executive advisor, Mary Ann Miller and journalist, Dan McCrum, the pair unpacked the demise of Wirecard, how the scandal rocked the global financial industry and, importantly providing insight to the question: “How was this able to happen?”
In 2015, a series of investigative reports by the Financial Times raised concerns about accounting irregularities and possible fraud at Wirecard’s operations in Asia. The FT alleged that Wirecard had inflated its revenues and profits by fabricating transactions and inflating the value of assets. Allegations that Wirecard vehemently denied.
However, the situation took a turn in June 2020 when Wirecard admitted that €1.9 billion of its cash assets, which were supposed to be held in trustee accounts in the Philippines, did not exist. The company’s auditors, EY, revealed that they were unable to confirm the existence of the funds.
Subsequent investigations unveiled a complex web of deception and fraud involving fake transactions, forged documents, and a network of offshore entities. It was discovered that Wirecard’s top executives, including its CEO Markus Braun, were instrumental in orchestrating the fraud, using various tactics to inflate the company’s financial position and deceive auditors and investors.
Dan McCrum explains how such an extensive pursuit masterminded by the firm’s C-Suite was able to fly under the radar for so long: “Wirecard’s cover story was that when it had nasty business it didn’t want to be associated with, it had some ‘friends’ do the payment processing. ‘Send it to them, they’ll do the business and they’ll send us back a load of money. And this guy is the one who looks after it.’ So everyone else is like, we’ll let him do that over there, we’ll assume that’s fine, or we won’t ask too many questions, and we’ll just do our normal business over here.
“And it’s those excuses that people tell themselves that allow this thing to get away.”
Three key executives and managers including Wirecard’s ex-CEO are currently standing trial, each facing up to 15 years imprisonment if convicted. Meanwhile, ex-COO Jan Marselek is unaccounted for, and is currently a fugitive believed to be hiding out in Russia under the protection of the Kremlin due to his involvement in the scandal.
What attending Money20/20 means to the boss of HSBC
In an informal chat with Money 20/20’s resident ‘wizard’, Ian Stuart, CEO of HSBC shared his views on what Money20/20 means to him, echoing everybody’s sentiments on the final day of another stellar event.
“It really gets your creative thinking alive, and we need to take ideas away. There will be things that I’ll pick up today that I’lll be thinking ‘okay, we need to go back and think about that. How can we take those product developments to our customers?’
“Remember, it’s all about the customer benefit. It’s not about benefits for us. It’s about if we take something and we make a customer journey better or we make their payments easier or whatever – it’s how can we take the technology and help our customers?
“It’s really a trial to see what’s out here, can we take it back and bring it into our business?”
Another fantastic event for our NorthRowers
We couldn’t end our series of daily recaps from Money20/20 without a shout out to our very own team of absolute troopers who have worked their socks off for the past three days making sure our time at Money20/20 was a roaring success.
They had countless conversations with like-minded professionals who share the same passion for aiding the fight against financial crime and the overall fintech space.
Throughout Money20/20, delegates, partners, investors, and the plain curious stopped by to see WorkStation in action and understand how we can help organisations to oversee and streamline their AML and KYC/B compliance processes throughout the customer lifecycle.
As the sun sets over Amsterdam and an awe-inspiring Money20/20, we want to extend our huge thanks to everyone who stopped by our stand, helped us get set up, the organisers and everyone else involved in delivering the premier event on the fintech calendar.
We can’t wait to do it all over again next year in what is already promising to be an even bigger and better event – if that is even possible?!