Is Wise dumb?

For years, fintech has sold a compelling story, particularly Wise. Their message? Banks are slow. Banks are expensive. Banks are burdened by legacy systems and bureaucracy. Technology can move money faster, cheaper and more transparently.

Source: Wise

But today, Wise faces a €500 million potential fine for breaching money laundering rules. What's going on?

Originally founded in 2011 as TransferWise, the company has become one of Europe’s fintech success stories. Today it serves more than almost 20 million customers, processing almost 5 million transactions a day and moves hundreds of billions of dollars across borders annually. It has become one of the most recognised brands in digital finance.

Screech. Has Wise hit the buffers? Was Wise dumb?

It turns out Belgian prosecutors are conducting an advanced investigation into Wise Europe focused upon more than €500 million of suspicious transactions, and whether Wise’s systems were used by criminal organisations to move money linked to fraud, corruption and drug trafficking. The investigation began in 2025 after Wise repeatedly appeared in hundreds of requests for judicial assistance involving more than 30 countries across Europe.

The language being used by prosecutors is particularly notable.

According to the Belgian authorities, investigators are examining “indications of non-compliance with anti-money laundering legislation”, specifically whether there were failures to properly identify customers and understand their activities. Prosecutors have stated that the investigation is nearing completion and reports suggest a criminal court summons is being considered.

Wise has strongly emphasised that it is cooperating fully with authorities and that no specific findings have been presented to the company.

That distinction is important. An investigation is not a conviction.

Wise notes that requests for information from law enforcement are a routine part of operating a global financial network and do not imply wrongdoing. They also note that almost one-third of Wise’s global workforce is dedicated to combating financial crime. Having said that, the market’s reaction was immediate. Wise shares fell sharply, at one point losing nearly a fifth of their value as investors assessed the potential implications.

The real issue here is bigger than Wise.

Can any financial institution build a global, real-time payments network while simultaneously maintaining perfect visibility over every customer and every transaction?

That is the challenge facing every fintech, every digital bank and increasingly every traditional bank.

The irony is that fintechs originally argued that technology would solve compliance. Artificial intelligence, machine learning and real-time monitoring would supposedly do a better job than the ageing systems used by incumbent banks.

The reality is more complicated.

The faster money moves, the harder it becomes to monitor. The easier it becomes to open an account, the more attractive the platform becomes to criminals. The more seamless the customer experience, the greater the challenge of maintaining robust controls behind the scenes.

Criminals love speed just as much as customers do.

What makes the Wise case particularly uncomfortable is that it is not the first time regulators have questioned the firm’s controls.

In 2024, Belgian regulators reportedly required action after hundreds of thousands of customers lacked proof-of-address documentation. Then in 2025, Wise’s US subsidiary paid $4.2 million to settle investigations by regulators in six states relating to anti-money laundering and Bank Secrecy Act compliance failures. Wise says it implemented all recommendations arising from those reviews.

And then there is a broader lesson here.

Last year, the UK Treasury upgraded its assessment of money-laundering risks within electronic money institutions. The report highlighted that digital payment firms have become increasingly attractive to criminals because of their convenience, accessibility and ability to move funds rapidly across borders. This is not just a Wise problem. It is a fintech maturity problem.

For the past decade the industry has focused on growth: customer acquisition; market share; user experience; product innovation.

The next decade will be defined by governance.

Financial institutions of the future will not be judged by how quickly they can move money. They will be judged by how they can stop it moving when it should not. That may sound less exciting than instant payments and frictionless onboarding but – as regulators across Europe, America and Asia tighten controls – it may prove to be the single most important competitive advantage of all.

The future of finance is not about money moving faster. It is about knowing exactly who is moving it, where it is going, why it is moving and whether it should move at all.

That is the challenge facing Wise and, increasingly, it is the challenge facing every fintech.