Following the travails at Revolut and Wirecard, another fintech starlet – N26 – has landed itself in hot water with the regulators over lax management practices. The app-only bank is reportedly being probed by German regulators following complaints about fraudulent transactions and deficiencies in customer communications, according to finextra.com.
The issues were first raised by German newspaper Handelsblatt in October, prompting Bafin to to launch a probe which has allegedly uncovered numerous shortcomings.
According to Handelsblatt, customer complaints of fraudulent transactions were either ignored or not responded to for several weeks. Users said they were unable to get a response through N26’s chatbot or by email, which were the only means of talking to staff.
Bafin’s investigation uncovered problems in staffing, outsourced task management and engineering, according to reports.
„As all licensed banks, N26 is subject to regular internal and external independent audits, including those by the German financial regulatory body BaFiN. Like all German banks, we are under BaFins supervision and have a very close working relationship with them. Regular audits are therefore business as usual for a bank. It is normal that during such an audit regulators identify points of improvement. We take the findings of every audit very serious and address areas of improvement as quickly as possible.” said Valentin Stalf – founder & CEO of N26, in a press statement.
N26 says it has tripled the number of staff in its customer complaints division in the past year and will respond to other issues in consultation with regulatory authorities.
„We will continue to invest heavily in both our security measures and our customer service over the coming months. We’ve increased our workforce from 500 employees in August 2018 to more than 1,000 today. The number of employees in customer service tripled last year and we continue to hire and strengthen the team. We will also continue to build out availability of our customer support and ensure that customers get our help whenever it’s needed.”, Stalf added.
Other high growth startups in the fintech space have been under intense scrutiny in recent months following allegations of fraudulent accounting (Wirecard), AML deficiencies (Revolut) and – in Revolut’s case – a toxic management culture.
Banking 4.0 – „how was the experience for you”
„So many people are coming here to Bucharest, people that I see and interact on linkedin and now I get the change to meet them in person. It was like being to the Football World Cup but this was the World Cup on linkedin in payments and open banking.”
Many more interesting quotes in the video below:
