I’ve been thinking about Wirecard recently, not in a naming or accusing way, but more as a framework.
With a lot of hype around AI and fintech, I wonder whether some modern business models could be vulnerable to similar issues. Things like revenues that are hard to verify, heavy reliance on third parties, complex payment flows, or big claims that are difficult for outsiders to properly audit.
One example people often bring up is Tether. From what I understand, they’ve still never had a full, independent audit confirming their reserves in the way people would normally expect for something claiming to be fully USD-backed. They publish attestations, but that’s not the same thing as a proper audit. Not saying it’s fraudulent, just that the opacity itself is a red flag worth discussing.
Regulators have already warned about companies overstating AI capabilities, and in the UK the FCA has tightened rules around payment firms because of safeguarding and governance concerns. We have also seen fintech failures and audit scrutiny in recent years, which suggests the risk never really goes away.
I am not saying any company is fake. I am more interested in what the red flags might be for retail investors so we can avoid being caught out by hype.
What kinds of AI or fintech business models do you think are most at risk of this sort of failure? And what are the most useful things you look for when doing due diligence?