N26 fined €9.2m by BaFin over late submission of suspected money laundering reports in 2022
N26 has been hit with a €9.2 million fine from the Federal Financial Supervisory Authority (BaFin), with the German regulator claiming the digital challenger “systematically submitted suspected money laundering reports late in 2022”.
BaFin fines N26 €9.2m
BaFin states that the delay in reporting suspicious activity violated the Act on the Detection of Profits from Serious Crimes, which requires immediate reporting of suspected money laundering or terrorist financing transactions.
In a statement on the fine, N26 says that it has implemented “numerous measures to further improve reporting processes” since 2022, including an €80 million investment into its personnel and technical infrastructure “to maintain the highest industry standards in combating financial crime and money laundering”.
“The company already set aside provisions for a potential fine in its 2022 annual financial statements, and the current fine is less than the provision set aside,” the bank adds.
“N26 will continue its close and trusted collaboration with its regulators on all related topics.”
Growth restriction lifted
BaFin previously fined N26 €4.25 million in 2021 for delayed responses to suspicious activity reports (SARs) flagged in 2019 and 2020.
In the same year, the regulator also placed a temporary cap on the number of new customers N26 could onboard monthly, restricting it to 50,000 new customers a month, and also appointed a special commissioner to report on the progression of the bank’s implementation of risk mitigation measures.
While this new customer onboarding restriction was loosened to 60,000 customers per month last year, N26 has revealed this week that BaFin will fully lift the restriction effective 1 June 2024, enabling the challenger to onboard an unlimited number of new customers.
N26 says the announcement “follows a period of close exchange between N26 and the regulator to combat financial crime and money laundering, which will continue even after the growth restriction ends”, adding that “the exchange with the special representative will continue until the end of 2024”.
Commenting on the announcement, Maximilian Tayenthal, co-CEO and COO of N26, says: “Our infrastructure and our use of modern, intelligence-based technology enable us to detect and combat fraud and money laundering in real time. We want to play a pioneering role among European banks in this field over the next few years.”
