Why Unqualified Advice in Banking and Payments is a Risky Business

Why Unqualified Advice in Banking and Payments is a Risky Business

By Viktoria Soltesz

Investment advisors need a license for a reason

Bad investment advice can lead to people losing their money, getting scammed, and facing financial difficulties. That is why we have regulations in place to make sure that investment advisors are qualified and trustworthy, helping to protect people from financial dangers. But when it comes to banking and payments, there’s a concerning lack of similar oversight.

In banking and payments, anyone can claim to be an expert and start offering advice, even if they lack the necessary qualifications or experience. This is troubling because the decisions made in these areas can significantly impact a company’s financial health. Moving money might seem straightforward, but it’s a critical operation that, if mishandled, can lead to financial losses, operational inefficiencies, and even bankrupt the company completely.

I’ve seen firsthand how companies can fall into this trap. They bring in a so-called “payment expert” expecting unbiased, knowledgeable advice. But often, they’re dealing with someone whose main goal is to sell a specific product or service, especially if this “expert” works for a bank or a payment service provider. The advice given is often twisted in a way to benefit the provider, not the client. Even if the “expert” knows the competition would better suit the client’s needs, they will never advise against their own pocket.

It is a huge issue

Relying on biased or unqualified advice can leave companies with payment or banking solutions which can result in inefficiencies, increased costs, bad cash flow management and even serious potential financial losses. Similar damages which could be caused by unqualified investment advisors.

There should be some form of regulation to protect businesses from unqualified or biased advice in banking and payments, too. Currently there is no specific license, but as a bare minimum there should be at least some basic standards to ensure that experts offering advice in this area have the right knowledge, qualification and experience to be able to act in the best interest of their clients.

Until we have such standards, businesses need to be cautious. Before taking advice from someone claiming to be an expert, ask the important questions: What are their qualifications? Do they have relevant experience? Are they connected to any financial institutions that might influence their advice? By doing this, companies can better protect themselves from the risks and costs of poor decisions.

Just as we protect people from bad investment advice, we must also safeguard businesses from the dangers of poor advice in banking and payments. Giving any advice around money should be genuinely unbiased and qualified in order to maintain the financial health of any business and benefit our overall financial systems.