WISE Bank! Data protection violations and artificial intelligence! Injunction hearing at the Commercial Court on 11 July 2024!

The neo-bank WISE got off to a great start as a fintech company in 2021, but its customer support is catastrophic. This could be due to the AI introduced in 2022, which is relentlessly and not without error in the customer data records.

We have already reported on how WISE has been closing customer accounts without notice since mid-2023, support is unavailable and written complaints are not responded to.

The real problem is that the accounts are closed “overnight” and the funds are withheld for weeks/months. WISE’s explanations only raise further questions, if they respond at all. Reference is made to “risk tolerances”, but these are not explained in detail. It also remains unanswered why customer funds are withheld contrary to international banking laws and why no deadlines are adhered to when cancellations are made. If you follow the path of the “complaint” on the website, it ends with the note “internal error” and the entry is cancelled. At this point at the latest, frustration sets in.

A number of those affected commissioned a law firm with WISE experience and received their money back after the credit was withheld for months. 

However, even if some of the money was refunded, those affected still have to worry about the stored data and its use. According to the information available to us, applications to open accounts with other neo-banks such as REVOLUT and bunq.com have already been rejected on the basis of alleged negative entries. How was the account holder’s data stored and passed on? What does an “internal risk analysis” mean, which decision parameters are used? These and other questions will now be clarified at a court hearing on 11 July 2024 at the Commercial Court in Vienna.

Even though WISE emphasises that the business activities of its customers are not unlawful or illegal, it would adhere to an “internal risk tolerance”. However, this risk tolerance is not specified or explained even when asked, and customer funds have sometimes been withheld for 8 months.

A software developer (name known to the editors) from the fintech sector explains the following to us:

“I can happily explain how they do it – I mean why neo-banks like WISE close accounts for no reason, understand how it works technically and why they do it for economic gain.”

Here is a link that explains how a NEO bank is structured:

How to Build a Neobank That Stands Out | Uptech

“Neobanks in particular are increasingly working with AI. The problem is that these neo-banks operate “virtually”, they either have no or only a very poor hotline, and you talk to the artificial intelligence in chats. Everything is moving very quickly in the direction of digitalisation, money is being collected from small entrepreneurs, lawyers are not tech-savvy enough and traditional banks are too conservative, they also invest too little and not fast enough in innovation. There are also too many loopholes in the constitutions of EU countries that specialised software developers can exploit to transfer funds completely legally.”

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