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marketrent OP t1_je9n2h8 wrote

Excerpt from the linked content^1 by Bianca Chan and Paige Hagy:

>When Mary Ann Miller saw the Hindenburg report estimate that roughly 40% to 75% of Cash App accounts reviewed by former employees [of Block, formerly known as Square] were fake or involved fraud, she told Insider she wasn't shocked at all.

>Miller is a 30-year fraud expert who has worked at and with banks, fintechs, and neobanks.

>Miller said that fintechs, by and large, have conflicting objectives when it comes to balancing growth and risk management.

>"One is to grow, grow, grow," Miller said of fintechs' competing priorities. "And then you have the risk teams that probably don't have the voice that they need at the table."

>Signing up and getting approved for a fintech is oftentimes quicker and easier than getting an account at a traditional bank.

>A speedy sign-up process can also help expedite growth, which is always a key consideration for a startup early on.


>For many consumer-facing fintechs, the number of users has often translated into the company's growth, and therefore its value, several sources told Insider.

>But it's a double-edged sword, since fraudsters and other bad actors can also onboard with ease, according to several analysts, venture capitalists, founders, and fraud experts who spoke with Insider.

>"I don't think there's an investor on the street who was not aware that Cash App is relatively widely used for illicit activities," [a fintech] analyst told Insider. "At the end of the day, I don't think anyone is shocked by any of that."

>The fact that Cash App offers peer-to-peer payments exacerbates the fraud issue, according to McKenna, the chief fraud strategist at Point Predictive, an anti-fraud software company.

>"It makes the money movement that much faster," he said.

>Fintechs were also singled out for facilitating fraud in the Paycheck Protection Program, when an 18-month-long investigation by the House Subcommittee called out fintechs for having little to no fraud prevention efforts in place to stop obvious and preventable fraud.

^1 Bianca Chan and Paige Hagy for Insider/Axel Springer, 29 Mar. 2023,


JayCroghan t1_jeaqzbq wrote

I’m not sure Fintech has a fraud issue, Cash App has a fraud issue. Head over to the Revolut sub and see the countless people posting about their accounts frozen. I bet Cash App doesn’t have that issue. I work in FinTech and it’s amazing how much KYC and AML goes on. Cash App seems to not bother with that which is why it isn’t in Europe because it’d be ran out again.


Veritas_Victoriam t1_jebkg0n wrote

I used to work at a fintech and now work at a bank that has a sponsorship program. Sure, some fintechs take BSA/AML seriously but many are pretty weak or inexperienced in that area and are primarily concerned with market growth as quick as possible. Fintechs are kind of a Wild West in the US and until there’s uniform regulation stands on them they’ll continue to run the gambit on being solid to bad at fraud/risk management


TheTrollCoach t1_jeblm0v wrote

I didn't have to answer any KYC questions or give my SSN when I set up my Venmo account. Haven't used Revolut so they might require that. Coming from a traditional bank FINCENs seem like the wild west.


JayCroghan t1_jebnscs wrote

For European fintechs like Revolut you need to prove who you are with your passport and a photo of a bill or bank statement to prove you’re a resident. Then they ask people who they need more info for proof of the source of the funds like bank statements or proof of receiving salary. I won’t use them because they freeze accounts so much I don’t want to have to deal with a months long argument to access my money.


marketrent OP t1_jec9h38 wrote

FCA’s Matthew Long wrote last month that the U.K. regulator “continue to see poor financial crime controls in some payments and e-money firms.”

That same regulator just put Revolut on notice that the company may be in breach of rules that state: “All adverts and promotions for financial services must be fair, clear and not misleading.”


JayCroghan t1_jedplzd wrote

So they’re in trouble for misleadingly advertising their products, not mass fraud. Got it. I hate Revolut but I know they do a fuck ton of KYC and AML.