The feted digital banking start-up is struggling with inadequate compliance. Germany's regulator is appointing a special in-house monitor to accompany its improvement measures.
Berlin-based N26 was hit with an order to prevent money laundering and terrorist financing by its home regulator Bafin, according to a statement. It is the second time Bafin has stepped in after a prominent money laundering case in 2019.
The regulator is ordering N26 to «ensure that it has the adequate personnel, technical and organizational resources to comply with its obligations under anti-money laundering law,» it said. The move represents another hurdle for the eight-year-old bank which is seeking to disrupt traditional finance with cheaper online alternatives.
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Unlike in 2019, Bafin is sending a monitor in-house to make sure N26 complies, in a move reminiscent of traditional finance: «A special commissioner is being appointed to monitor the implementation of this order and the company’s progress in resolving other shortcomings identified,» Bafin said.
N26 is growing apace including in Switzerland. It recently clinched a license in Brazil, after exiting the British market in 2020. The start-up narrowed its loss to 110 million euros ($133 million) last year, and aims for a break-even this year.
