Is a French Wirecard scandal possible?

Wirecard scandal

The Wirecard scandal and French FinTech

Le 12 January 2021

An attempt to falsify accounts is always possible regardless of the industry or country. In France, regulations limit the risks. Moreover, the Wirecard scandal is an earthquake which should accelerate the debate and further strengthen the harmonization of European practices. By Guillaume PONSARD – Founding President of the French fintech CentralPay.

The very big responsibilities of a growing model

Stock market plummeting 94%, over $ 3 billion in debt and equity in the red, creditors and shareholders dropping millions into the profit and loss account, hundreds of partners in the waiting or waiting, urgency, a legitimate uncertainty as to the availability of funds for thousands of customers… The dramatic Wirecard balance sheet cannot decently leave the managers of financial institutions indifferent, who ensure the sincerity of the accounts they hold and manage scrupulously.

Not to mention that in the eyes of the public, the world of fintech arouses admiration and mistrust. A clever mix of technological mastery and regulatory requirements, fintechs deliver their financial innovations around processes at low marginal cost, which makes their model attractive as long as they reach a certain size. The behavior of Wirecard managers will therefore not help to better understand the challenges of a fast-growing market. In addition, fintech has gone global rapidly. And the culpable failure of one of its links remains unacceptable in view of the multiple damages it can cause.

A crazy governance affair more than a fintech issue

This scandal is first and foremost the damaged fruit of governance that has become insane. Wirecard is a hyper-growing company, a majestic IPO six years after its creation, multiple successful buyouts, innovative solutions, expansion around the world. But it also had to face a deficit operating perimeter, which it sought to settle by making up its accounts, and which today it justifies by the desire to present “an advantageous financial situation in order to attract new investors and clients.”

So, either the Wirecard scandal is coupled with a shameless lie, concealing other criminal acts in which the stakeholders are more numerous than one estimates (it will be necessary to wait for the end of the investigations), or more probably, its leaders are guilty of having sought to enrich themselves at the cost of all compromises and of having quite simply lost contact with elementary economic and social reality. And their listeners with them. Wirecard does not raise the question of technological risk or a possible questioning of the fintech model. Wirecard questions the validity of the “Too big to fail” concept when the conditions are met, as was the case in Germany.

An alignment of [black] stars a priori impossible in France

The difficulty of this file is due in large part to the pyramidal organization of Wirecard. The company has developed a gigantic ecosystem, made up of subsidiaries established on 4 continents, making the performance of consolidated audits complex and the work of the German regulator, however conscientious, particularly laborious. France does not count such sprawling organizations among its financial establishments. The landscape becomes much more legible.


Article initially published on July 8, 2020 and to be read in full on