"The patience of the bank supervisors has snapped"

Bafin threatens N26 with no longer being allowed to accept new customers. Apparently, the neobank is not taking strong enough action against money laundering for the supervisory authority.

The German Federal Financial Supervisory Authority has apparently had enough of N26's lax fight against money laundering. "The bank supervisors' patience has run out", quotes the Handelsblatt quotes an insider. According to this, Bafin is considering restricting N26's new customer business. The reason for this: since 2019, around one in ten suspected money laundering reports have come from the neobank. Banks have to report suspicions of money laundering to the Financial Intelligence Unit in Cologne, which is based at customs. This unit analyzes the transactions and forwards them to the local state criminal investigation offices if necessary. N26 is apparently not rectifying the shortcomings quickly enough. Bafin does not wish to comment officially.

A spokesperson for N26 told Handelsblatt that details of the cooperation with the supervisory authorities could not be commented on. If the supervisory authority gets serious, it will be painful for the fintech: not only could the bank not accept any new customers. The international expansion is also at risk of collapsing and the upcoming financing round could fail. N26 has so far hoped that the company's valuation will rise to more than ten million US dollars.

Since 2019, there have been increasing reports that Neobank apparently has problems with anti-money laundering and compliance. On Wednesday, Bafin called for stricter rules. The supervisory authority assigned a special officer to the bank. Since Thursday, N26 has also appointed an anti-money laundering officer. According to its own information, N26 has already invested 25 million euros in this area this year. The Bafin will probably announce soon whether this is enough.