German FinTech Giant N26 Will Stay Under Regulatory Money-Laundering Scrutiny!

BaFin warnings against unauthorized financial services providers
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The German Federal Financial Supervisory Authority (BaFin) has extended its money laundering measures against Berlin-based neo-bank N26. The regulator justified the move on Monday, citing the neobank’s shortcomings in its systems for preventing money laundering and terrorist financing. This means that the growth restrictions for new customers and the special representative’s mandate remain in place.

As of Nov. 9, 2021, N26 Bank is not allowed to gain more than 50,000 new customers per month. This limit, which BaFin says is intended to reduce risk, can be relaxed by the special commissioner if he sees progress in eliminating deficiencies. According to the supervisors, N26 must take and maintain appropriate technical-organizational and personnel measures to ensure proper business organization and consistently meet its legal obligations.

The suspicious activity reporting system is particularly affected. The bank must create sufficient IT monitoring, establish an appropriate quality assurance function, and set up effective controls of outsourced activities, BaFin demands.


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