N26 fined

Neobank has paid 4.25 million euros to the Federal Financial Supervisory Authority for failing to combat money laundering. However, the bank will not be getting rid of the special representative for money laundering any time soon.

In May of this year, Bafin made it official: the Federal Financial Supervisory Authority certified that Neobank N26 lacked rigor in the fight against money laundering and sent a special commissioner to the fintech. Bafin has now announced that it has imposed a fine of 4.25 million euros in this context. The sum changed hands on June 14, 2021, and Bafin declared the payment legally binding. According to N26, this related to "less than 50 late submissions" of suspicious activity reports for money laundering from 2019 and 2020. In addition, all "measures required by BaFin to improve the timely reporting of suspicious activity" had been implemented by N26.

N26 thus averts the worst: Bafin had in the meantime considered imposing restrictions on N26's new business. This would not only have been bad for the fintech's customers, but above all for the company itself. N26 has been working on a new financing round for some time now, and according to estimates from the financial world, this could result in a valuation of ten billion euros. However, problems with Germany's highest financial supervisory authority are less attractive for potential investors.

Bafin had accused N26 of taking too few measures to combat money laundering and terrorism and attested to the fintech's "deficits both in IT monitoring and in the identification and verification" of customers. As a result, N26 reorganized its company structure, appointed a money laundering officer and expanded its management team to include governance, risk and compliance experts. The fintech did not come up with the idea all by itself: Bafin had ordered "appropriate personnel and technical/organizational resources" to combat money laundering.