"The patience thread of bank supervisors is broken".

Bafin is threatening 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 is apparently getting fed up with N26's lax fight against money laundering. "The patience thread of the bank supervisors is torn," quotes the Handelsblatt an insider. Accordingly, Bafin is considering restricting N26's new customer business. Reason for this: since 2019, about every tenth money laundering suspicion report comes from the neobank. Banks must report suspicious money laundering reports to the Financial Intelligence Unit in Cologne, which is based at customs. This analyses the transactions and forwards them to the local state criminal investigation offices if necessary. N26 is apparently not fixing the deficiencies quickly enough. Officially, Bafin does not want to comment.

A spokesperson for N26 told Handelsblatt that it could not comment on details of its cooperation with the supervisory authorities. If the regulator gets serious, it will be painful for the fintech: not only could the bank not accept new customers. Also, the international expansion threatens to burst, the upcoming financing round could fail. N26 hopes so far that the company valuation will rise to more than ten million US dollars.

Since 2019, reports have been piling up that Neobank appears to have anti-money laundering and compliance issues. On Wednesday, Bafin issued a reminder for stricter rules. The regulator placed a special officer at the bank's side. Since Thursday, N26 has also appointed an anti-money laundering officer. According to its own information, N26 has already invested 25 million euros in the area this year. Bafin will probably announce soon whether this is enough.