The warning signs were very apparent for Wirecard, not only did the Financial Times do numerous articles on the fintech but KPMG even said they could not substantiate their claims; Wirecard was a failure of risk management and internal controls; only a fraction of corporate executives who manipulate or misrepresent their companies’ performances get exposed by regulators for such misdeeds; risk was not important enough for the executives at the firm; Baruch College Professor Gideon Pell writes in Forbes, “gaining and preserving the trust of consumers, merchants and others with robust risk management and internal controls is critical to the success of financial technology business”; for risk management to be effective, management and the board must own and address it, and the risk management system supported by a healthy risk culture throughout the company; Wirecard should give all fintechs pause to better address potential gaps within their own companies before it too late. Forbes.
