Fintech’s fraud problem will end up being the consumer’s problem

Hello! Dan DeFrancesco in NYC.

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Today we have stories about a bootcamp for aspiring buy-side analysts, JPMorgan’s Jamie Dimon is reportedly being ousted, and a food critic ate ​​every burger on the Wendy’s menu.

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1. Fintech’s fraud disaster.

Move fast and break things.

It’s a phrase you’ve probably heard if you’ve spent time with anyone in the startup industry.

While its origins go back to the early days of Facebook, it didn’t take long for the phrase to become a rallying cry for every two-bit tech entrepreneur with an idea.

And while that kind of philosophy might work for some startups, it’s not the best strategy if you’re dealing with people’s money.

Which brings us to a story by Insiders Bianca Chan and Paige Hagy about concerns over the prevalence of fraud in consumer fintech in recent years.

That’s an issue raised in a recent report by a short seller targeting Block’s Cash app. Whether or not you agree with the report — Block vehemently denies it, for the record — there is a larger point to be made.

Fintechs have undeniably led to improvements in how people save, invest and transfer money. However, one of the industry’s great strengths – the speed with which it can offer users these services – is its biggest weakness.

Streamlining onboarding processes that previously bogged down customers also opens up fintechs to let criminals into their ecosystems.

For some, it’s the cost of doing business, so to speak. As the old saying goes, “you have to break a couple of eggs to make an omelette.” The risk of playing in a world where one can be more vulnerable to scammers is worth it if it means their finances can be a little more streamlined.

However, others argue that it is not acceptable. And when you consider how some of these startups approach un- and sub-banks, the problem becomes all the more serious.

Either way, understand that the onus is on you, the user. At a time when many fintechs are looking to achieve profitability, or at least reduce spending, few will consider changing how quickly they bring in new users.

After all, you know what they say.

Move fast and break things.

Click here to read more about fintech’s fraud problem.

In other news:

2. Here come the sharks. The collapse, or near-collapse, of some US banks means prime investment opportunities for some on Wall Street, writes Insider’s Linette Lopez. Here’s who comes out on top from all this chaos.

3. Poor Ralph Hamers. UBS announced it is replacing Hamers as chief executive and bringing back Sergio Ermotti to lead the takeover of Credit Suisse, less than two weeks after Hamers oversaw the bailout. Read more.

4. And poor Michael Klein. The Wall Street veteran was tapped to lead Credit Suisse’s spinoff of the investment bank, potentially making a boatload of money from it. But with UBS’ takeover of Credit Suisse, those plans are basically done, according to Bloomberg.

5. Fintech pitch decks galore! First, we have the pitch deck for New York-based Spiral, a startup that helps banks provide charitable services. Here’s the deck it used to raise $28 million. We also covered StellarFi, a fintech that helps users improve their credit scores, which is used to raise $15 million. For more than 50 different decks used by fintechs to raise new funds, check out our library.

6. Everything you need to know about the CFTC lawsuit against Binance. The crypto exchange, along with its CEO and former chief compliance officer, was sued by the US regulator for violating national financial laws. Here are seven of the biggest accusations against Binance in the 74-page complaint.

7. Drop and give me 15 economic models! Fundamental Edge is a training program for young and aspiring buy-side analysts to prepare for life in the hedge fund industry, reports Institutional Investor. Read more about what to expect at the four-week analyst bootcamp.

8. Jamie Dimon is reportedly being ousted. The CEO of JPMorgan Chase will be questioned about the bank’s involvement with convicted sex offender Jeffrey Epstein, reports the Financial Times. More here.

9. New Rolexes just dropped. The luxury watchmaker’s 2023 collection includes a platinum 60th anniversary Daytona, along with eight other designs that I’m sure I’ll never be able to afford. Check them all out here.

10. Everyone’s favorite food reviewer is back. After conquering Taco Bell, Lucien Formichella is back to test every burger on the Wendy’s menu. Here’s how the burgers stack up. (As a dad, I’m allowed to make that joke.)

Curated by Dan DeFrancesco in New York. Feedback or tips? Email [email protected], tweet @dandefrancesco, or connect on LinkedIn. Edited by Jeffrey Cane (tweet @jeffrey_cane) in New York and Hallam Bullock (tweet @hallam_bullock) in London.