BaFin has recently imposed a €9.2 million fine on German FinTech firm N26 due to anti-money laundering failures.
According to Finextra Research, BaFin, the German regulator, found that N26 systematically submitted suspected money laundering reports late throughout 2022. This fine marks a significant development in the ongoing scrutiny over N26’s money laundering controls.
This penalty follows previous actions taken by BaFin against N26. In 2021, the bank was fined €4.25 million, and a temporary cap on new customer onboarding was instituted, limiting it to 50,000 new customers per month. Despite efforts to address deficiencies, BaFin extended the cap last July, citing persistent issues in N26’s systems. The extension was accompanied by demands for enhanced IT monitoring, improved quality assurance, and better outsourcing controls.
However, there may be a shift in BaFin’s stance towards N26. Reports indicate that the regulator is contemplating lifting the customer cap, potentially as early as this year. N26, in response, has highlighted its efforts to bolster reporting processes since 2022, investing over €80 million in personnel and technical infrastructure to combat financial crime and money laundering effectively.
“N26 takes its responsibility to combat financial crime seriously,” said an N26 spokesperson. “We have implemented numerous measures to enhance our reporting processes and maintain the highest industry standards.”
This fine underscores the ongoing efforts of regulatory bodies to ensure compliance within the FinTech sector, particularly regarding anti-money laundering measures. BaFin’s actions against N26 serve as a reminder to financial institutions of the importance of robust controls and timely reporting in combating financial crime.
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