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Unfortunately, this is the reality of modern business banking, and Wise is not unique in this. You can find similar reports about most major EMIs and a fair num

by mppm 1y ago

Unfortunately, this is the reality of modern business banking, and Wise is not unique in this. You can find similar reports about most major EMIs and a fair number of banks. Banks have basically become an inefficient and unfair branch of law enforcement, without presumption of innocence and without due process. Every imaginable abuse is justifiable by Compliance nowadays.

reconnecting 1y ago
I disagree. Neo-banks like Wise choose to grow irresponsibly. Any traditional local bank will usually speak with you first before opening an account. In contrast, neo-banks open accounts quickly and then rely heavily on automated fraud prevention systems, since manual reviews are costly. As a result, it's easy to get in, but you may later become a victim of limited resources for proper fraud handling and manual checks
- mppm 1y ago
  > Any traditional local bank will usually speak with you first before opening an account. In contrast, neo-banks open accounts quickly and then rely heavily on automated fraud prevention systems, since manual reviews are costly. Maybe that was still the case in 2015. In 2025, a traditional bank will ask for a ton of documentation, run it through the same (probably outsourced) automated fraud prevention system and tell you that unfortunately an account cannot be opened for you. At least that is a common situation for businesses that are too small to be important to the bank, but carry some compliance risk (international consulting, app developers, digital services, etc.). And then you are back to neo-banks... This has been a trend everywhere, recently, but the severity of the situation differs country by country, so YMMV.
  - reconnecting 1y ago
    Yes, I must clarify that my opinion is based on EU/Swiss regulatory practices. However, this doesn't change the fact that mostly neo-banks exploit regulatory gaps for growth, which ultimately leads to issues like the one described above.
    - lmm 1y ago
      It doesn't lead to those issues, you get those issues with any bank or pseudobank, neo- or otherwise. It might be harder to get an account to start with with some more traditional banks, but that doesn't make you any less likely to get randomly screwed by them.
      - reconnecting 1y ago
        Levels of trust differ. Neo-banks, by default, have zero trust for their customer accounts, whereas traditional banks have at least some established trust. As a result, companies like Wise use fraud prevention systems that may flag your account simply because you logged in from an risky network.
        lmm 1y ago
        Traditional banks can and do do exactly the same.
        reconnecting 1y ago
        I'm speaking about Wise, as their logo is featured as a client of a fraud prevention platform. This makes it easy to imagine the kind of risk scoring they might use for their client accounts. However, I'm not aware of large banks using such online fraud prevention services. For example, in France, there's one major vendor that powers most of the banks. If we look at their client area, there's no indication of fingerprinting. Since device fingerprinting is included in most online fraud prevention systems, I can assume that traditional banks in France are not using these kinds of tools to screen accounts. But perhaps you have another source of information.
        lmm 1y ago
        My 170-year-old household name bank does device fingerprinting. They even advertise it as a positive ("our security systems detect and stop unusual transactions, keeping your money safe" or something on those lines).
danielbarla 1y ago
Well, if we're talking about the same thing, there are laws that the banks and fintechs are bound by. These carry hefty fines for the bank and potential jail terms for their employees if not followed to the letter, including things like providing zero context or information about why your account was blocked when suspicion of fraud or money laundering is raised. The failure to report suspicion is likewise punishable. Do people feel that complying with the law is unreasonable, or do they feel like banks do other shady stuff in the name of compliance?
- reconnecting 1y ago
  I'm not familiar with the exact regulatory text for fintech, but it's highly likely that there is a difference between suspended and closed accounts. While it may be illegal to close an account without providing proof, it seems possible to soft-block or suspend an account for 'security reasons' without disclosing whether it's related to fraud prevention or other issues.
  - mppm 1y ago
    It's not illegal. Even though having access to banking is absolutely essential to every imaginable business, bank accounts are still treated as a voluntary business relationship by regulators. Some protections exist in the EU for individuals, but for businesses, it is entirely at the discretion of the bank to open and maintain a relationship.
- raron 1y ago
  The (AML and some KYC) laws themselves are unreasonable for two reasons. First, having access to banking and payment services are necessary is many places so much it should be considered a basic (human) right on itself. Freezing someone's money or access to banking services could cause much more issues or more harm to some individual than some of the criminal charges yet it is done automatically without any proof, reason, any way to appeal, by the sole discretion of one of the stakeholder (without any independent third party). Which in spirit is going against the innocent until proven guilty (and probably even the right of fair trial and right to property human rights). From people's perspective banks have more power and can easier "take" (freeze for months/years) your money than courts and have way less responsibility or oversight doing it. Second, banking services is one of few which is nearly entirely depends on trust. If a bank (from my perspective) "can not" (not allowed) to account for every penny and every transaction then my trust in that bank (or even in the whole banking industry) is lost. That is bad for the bank (they will loose customers), bad for me (because I must use more cash), bad for the society (because more cash would increase tax evasion and black markets, and because it lowers the trust in public institutions), just because some stupid algorithm thought that paying half the dinner to a friend would significantly help the finances of a terrorist group.

by mppm 1y ago

reconnecting 1y ago

I disagree. Neo-banks like Wise choose to grow irresponsibly. Any traditional local bank will usually speak with you first before opening an account. In contrast, neo-banks open accounts quickly and then rely heavily on automated fraud prevention systems, since manual reviews are costly. As a result, it's easy to get in, but you may later become a victim of limited resources for proper fraud handling and manual checks

mppm 1y ago
> Any traditional local bank will usually speak with you first before opening an account. In contrast, neo-banks open accounts quickly and then rely heavily on automated fraud prevention systems, since manual reviews are costly. Maybe that was still the case in 2015. In 2025, a traditional bank will ask for a ton of documentation, run it through the same (probably outsourced) automated fraud prevention system and tell you that unfortunately an account cannot be opened for you. At least that is a common situation for businesses that are too small to be important to the bank, but carry some compliance risk (international consulting, app developers, digital services, etc.). And then you are back to neo-banks... This has been a trend everywhere, recently, but the severity of the situation differs country by country, so YMMV.
- reconnecting 1y ago
  Yes, I must clarify that my opinion is based on EU/Swiss regulatory practices. However, this doesn't change the fact that mostly neo-banks exploit regulatory gaps for growth, which ultimately leads to issues like the one described above.
  - lmm 1y ago
    It doesn't lead to those issues, you get those issues with any bank or pseudobank, neo- or otherwise. It might be harder to get an account to start with with some more traditional banks, but that doesn't make you any less likely to get randomly screwed by them.
    - reconnecting 1y ago
      Levels of trust differ. Neo-banks, by default, have zero trust for their customer accounts, whereas traditional banks have at least some established trust. As a result, companies like Wise use fraud prevention systems that may flag your account simply because you logged in from an risky network.
      - lmm 1y ago
        Traditional banks can and do do exactly the same.
        reconnecting 1y ago
        I'm speaking about Wise, as their logo is featured as a client of a fraud prevention platform. This makes it easy to imagine the kind of risk scoring they might use for their client accounts. However, I'm not aware of large banks using such online fraud prevention services. For example, in France, there's one major vendor that powers most of the banks. If we look at their client area, there's no indication of fingerprinting. Since device fingerprinting is included in most online fraud prevention systems, I can assume that traditional banks in France are not using these kinds of tools to screen accounts. But perhaps you have another source of information.
        lmm 1y ago
        My 170-year-old household name bank does device fingerprinting. They even advertise it as a positive ("our security systems detect and stop unusual transactions, keeping your money safe" or something on those lines).

danielbarla 1y ago

Well, if we're talking about the same thing, there are laws that the banks and fintechs are bound by. These carry hefty fines for the bank and potential jail terms for their employees if not followed to the letter, including things like providing zero context or information about why your account was blocked when suspicion of fraud or money laundering is raised. The failure to report suspicion is likewise punishable. Do people feel that complying with the law is unreasonable, or do they feel like banks do other shady stuff in the name of compliance?

reconnecting 1y ago
I'm not familiar with the exact regulatory text for fintech, but it's highly likely that there is a difference between suspended and closed accounts. While it may be illegal to close an account without providing proof, it seems possible to soft-block or suspend an account for 'security reasons' without disclosing whether it's related to fraud prevention or other issues.
- mppm 1y ago
  It's not illegal. Even though having access to banking is absolutely essential to every imaginable business, bank accounts are still treated as a voluntary business relationship by regulators. Some protections exist in the EU for individuals, but for businesses, it is entirely at the discretion of the bank to open and maintain a relationship.
raron 1y ago
The (AML and some KYC) laws themselves are unreasonable for two reasons. First, having access to banking and payment services are necessary is many places so much it should be considered a basic (human) right on itself. Freezing someone's money or access to banking services could cause much more issues or more harm to some individual than some of the criminal charges yet it is done automatically without any proof, reason, any way to appeal, by the sole discretion of one of the stakeholder (without any independent third party). Which in spirit is going against the innocent until proven guilty (and probably even the right of fair trial and right to property human rights). From people's perspective banks have more power and can easier "take" (freeze for months/years) your money than courts and have way less responsibility or oversight doing it. Second, banking services is one of few which is nearly entirely depends on trust. If a bank (from my perspective) "can not" (not allowed) to account for every penny and every transaction then my trust in that bank (or even in the whole banking industry) is lost. That is bad for the bank (they will loose customers), bad for me (because I must use more cash), bad for the society (because more cash would increase tax evasion and black markets, and because it lowers the trust in public institutions), just because some stupid algorithm thought that paying half the dinner to a friend would significantly help the finances of a terrorist group.