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n26: financial regulator imposes multi-million euro fine. the neobank n26 must pay a fine of 9.2 million euros. in return, the financial regulator lifts the restrictions. the federal financial supervisory authority (bafin) intends to lift the growth restrictions for n26 that have been in place for two and a half years, as reported by handelsblatt. this would mean that the german fintech could accept as many new customers as it wishes in the near future. however, the company must pay a fine of 9.2 million euros because the online bank «systematically submitted suspicious money laundering reports late» in 2022, as emphasized by the financial regulator. victim of its own success. in light of n26's rapid growth in recent years, bafin found that it failed to develop its processes and controls accordingly. as reported by finews.ch, the federal authority issued an order in november 2021 limiting n26's ability to accept new customers to 50,000 per month, citing deficiencies in risk management and shortcomings in the fight against fraud. the new customer limit was then raised to 60,000 in december 2023. moving forward. if banks have reason to believe that a transaction is connected to money laundering or terrorism financing, they must notify the financial intelligence unit (fiu). in the past, n26 did not do this in a timely manner. in a statement, the neobank responded, «from 2022 onwards, n26 has implemented numerous measures to improve reporting processes.». the company stated that it has invested over 80 million euros in personnel and technology to comply with industry standards for preventing financial crime and money laundering. having resolved these shortcomings, bafin has decided that it is time to reward n26 for their efforts.
N26: Financial Regulator Imposes Multi-Million Euro Fine
The neobank N26 must pay a fine of 9.2 million euros. In return, the financial regulator lifts the restrictions.
The Federal Financial Supervisory Authority (BaFin) intends to lift the growth restrictions for N26 that have been in place for two and a half years, as reported by Handelsblatt. This would mean that the German fintech could accept as many new customers as it wishes in the near future.
However, the company must pay a fine of 9.2 million euros because the online bank «systematically submitted suspicious money laundering reports late» in 2022, as emphasized by the financial regulator.
Victim of Its Own Success
In light of N26's rapid growth in recent years, BaFin found that it failed to develop its processes and controls accordingly. As reported by finews.ch, the federal authority issued an order in November 2021 limiting N26's ability to accept new customers to 50,000 per month, citing deficiencies in risk management and shortcomings in the fight against fraud.
The new customer limit was then raised to 60,000 in December 2023.
Moving Forward
If banks have reason to believe that a transaction is connected to money laundering or terrorism financing, they must notify the Financial Intelligence Unit (FIU). In the past, N26 did not do this in a timely manner.
In a statement, the neobank responded, «From 2022 onwards, N26 has implemented numerous measures to improve reporting processes.»
The company stated that it has invested over 80 million euros in personnel and technology to comply with industry standards for preventing financial crime and money laundering.
Having resolved these shortcomings, BaFin has decided that it is time to reward N26 for their efforts.
