BaFin’s intervention comes two years after it ordered digital bank to improve controls.
Germany’s main financial regulator, the Federal Financial Supervisory Authority (BaFin), has ordered German neobank N26 to increase its anti-money laundering (AML) efforts, according to an announcement.
„On 11 May 2021, in order to prevent money laundering and terrorist financing, BaFin ordered N26 Bank GmbH to implement appropriate internal controls and safeguards and comply with general due diligence requirements. A special commissioner is being appointed to monitor the implementation of this order and the company’s progress in resolving other shortcomings identified,” according to the press release.
More specifically, BaFin ordered N26 Bank GmbH to rectify deficiencies both in IT monitoring and in customer due diligence.
In addition, N26 Bank GmbH is required „to ensure that it has the adequate personnel, technical and organisational resources to comply with its obligations under anti-money laundering law”.
These measures must each be implemented within a set time period.
The Financial Times (FT) reported that it is “rare” for German authorities to appoint a special commissioner to monitor a bank, having done so only once previously — with Deutsche Bank in 2018.
The intervention from the regulator comes two years after it ordered the Berlin-based bank to strengthen its anti-money laundering practices after raising a number of concerns.
In a statement, N26 said it had already “massively advanced” its money laundering controls, but “nonetheless we acknowledge that more needs to be done in that area,” according to FT.
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N26, which was valued at $3.5bn in a funding round last year, has been one of the fastest-growing challenger banks in Europe since it was founded in 2013. It has raised close to €800m from investors including Tencent, Allianz X and Peter Thiel. Earlier this year, the bank, which has more than 7m clients in 25 countries, said it was working “towards a public listing in the future”.
Banking 4.0 – „how was the experience for you”
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