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The neo-banks loved by bandits and unscrupulous brokers such as Sadri Fegaier

Publié le 23 mai 2024 à 10:00 par Magazine En-Contact
The neo-banks loved by bandits and unscrupulous brokers such as Sadri Fegaier

What sometimes explains the success and growth of certain banks and fintechs? The great latitude they allow themselves in setting up the control and KYC (Know Your Customer) procedures that are normally imposed on them by legislation. And the easy platforms provided by the media, the press and 24-hour news channels, where nothing is controlled or fact-checked?

In an increasingly open world, it is important to know who you are dealing with and to whom you are entrusting your assets. To accept, perhaps, to pay to know what is true, what is false, or what service is being delivered. To take the time.

N26, Revolut, Solfea, Banking Circle...
Yesterday, the neobank N26 was imposed a second fine of €9.2 million by BAFIN, a penalty in addition to the one already received in the same country and imposed in 2021. Why this fine? Because the bank is not sufficiently vigilant and rigorous in applying anti-money laundering measures on its platform, says the supervisory authority. In practical terms, N26 agrees to open accounts without having checked everything it needs to check about a customer and the flows he or she brings in. It presumably gains in terms of management costs.

Sadri Fegaier, founder of Sfam and Indexia

For having then wanted to get back on the right track, N26 then took a big step to the left, starting in France to close accounts without reason or explanation, and to freeze the assets of its honest customers, because there are many of them. As a result, the Facebook group "ripped off by N26" has hundreds of members sharing tips on how to make an anaemic, unintelligent bot understand why ... you have to give the money back! Inevitably, behind these practices lies another habit, that of automating customer service and relations at every turn. Revolut has also closed a large number of bank accounts, though not quite so badly, precisely so as not to suffer the same wrath as its competitor.  The precaution can sometimes be radical: all account holders who have used their account to buy or sell crypto in p2p have been flogged, along with those who have a relationship with them.

Ten years ago Solfea, the former Petrofigaz, was sometimes embroiled in shady dealings, against its will, because this ex-subsidiary of Engie and BNP Paribas Personal Finance specialises in the design and financing of energy-saving equipment. Some solar panel dealers and installers who refinance the installation they have sold to a Factor have often worked with Solfea. The bank still exists and is now a 100% subsidiary of BNP Personal Finance.

BTR, Banque Terrienne Russe et Ouest, were two banks that were also very understanding when it came to applying the legislation. They came to prominence after Alexander Gregoriev brought them to light. The businessman is said to have deposited, channelled and laundered more than $20 billion there between 2010 and 2014. In March 2014, BTR had its licence withdrawn. In Latvia, ABLV was forced into bankruptcy after a US Treasury Secretary conducted rigorous audits and proved that money laundering was at the heart of the bank's business model. A few years later, the RIETUMU bank, also based in Latvia, was one of those widely used by crooks involved in VAT fraud on CO2.

Funding bonanza has come to an end (..) and there are serious doubts about profitability, controls and culture in banks such as N26, Revolut (..) N26, Revolut, Monzo have attracted millions of customers but they struggle to turn a profit. They have also attracted the attention of regulators unhappy about poor know-your-customer checks and anti-money laundering controls and widespread organisational weaknesses in The Financial Times FT. 08/2023. 

Save time, be hassle free?
If you are asked to make an urgent transfer tomorrow using Banking Circle, Revolut, N26 or any of the others, take the time to find out who you are dealing with and check the consistency of the transaction and the service you are being asked to pay for. Admittedly, a large proportion of the transactions managed by these fintechs and neo-banks are compliant. But because of their business model, they are also the ones with the lightest KYC and control requirements. Their business model encourages them to devote a large part of their resources to customer acquisition, or Growth, in the jargon. But there is a downside to the time savings that customers, bankers and journalists think they are making:

At the beginning of 2023, Revolut was condemned by a court in the south of France for having authorised two urgent payments, totalling 84,000 euros, which had been requested by brokers who were under fire. The bank did not carry out the checks that the amount of the payment should have prompted.

"Many start-ups around the world are built on this promise to save time. Time is money". Media-savvy and always smiling, Jérémie Rosselli, the CEO of N26 in France, is a guest on everything from Europe1 and BFM to the ACSEL forums and so on. In September 2017, in Les Echos, he praised the time savings brought about by disruptive players in many businesses. What journalist will ever get him to question, live, and argue with an N26 customer whose bank account has been blocked for no reason and who is struggling to talk to a bot doped up with AI, the sham customer service generally on offer?

En-Contact magazine #131

And Sadri Fegaier's bank (Indexia) is...
Today's top story is the following question: in which bank account are the assets - or part of the assets - of Sadri Fegaier, the founder of Sfam and Indexia safely stashed away? No one in the Paris financial centre - where the collapse of the insurance broker never ceases to intrigue - thinks for a moment that the billion in revenue (approximately) generated by SFAM and its galaxies has vanished. On Wednesday 22 May, the Paris Commercial Court ordered the liquidation of the entire empire of the entrepreneur from Romans-sur-Isère.

According to our information, one person in the capital has managed to identify the bank in which some of these sums are located. This man is a bailiff. He is in the middle of his work. Follow the money," was Deep Throat's advice in the Watergate affair.

Thousands of SFAM creditors and Emma Léoty will follow with interest the peregrinations of E.P., the bailiff. Emma is the lawyer defending the aggrieved customers of SFAM and N26. She, too, is hard at work.

Going further
Eleven years ago, on 23 May 2013, Georges Moustaki passed away. He wrote, composed and sang some of the most beautiful melodies in French chanson, including Le Temps de Vivre.

You can read our investigation into the posers and imposters of customer experience.

Manuel Jacquinet.

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