Tag: Solaris

Solaris, a German fintech and neobank, has a long history of compliance troubles. Moreover, its ongoing financial losses and regulatory woes doubt its long-term profitability, even as it sheds jobs and restructures for survival. A potential IPO, as rumored by the German platform Gründerszene, seems speculative at best in light of its deep-rooted issues with compliance and financial stability.

No new Wirecard, please! Berlin-based fintech Solaris is once again under the microscope of Germany’s financial supervisory authority, BaFin, which has issued a stern warning and set deadlines for the company to rectify significant deficiencies identified in several audits. The latest move underscores ongoing regulatory concerns regarding Solaris' operations, particularly in areas critical to financial integrity and stability.

The German financial regulator BaFin has levied a significant penalty on Berlin-based FinTech Solaris for its systemic failure to submit suspicious money laundering reports timely. The authority announced a fine of 6.5 million euros against Solaris, underscoring persistent vulnerabilities within Germany's financial sector to money laundering activities, despite Frankfurt's recent victory in securing the headquarters for the EU’s new anti-money laundering authority, AMLA.

Berlin-based Solarisbank has encountered a significant setback with the discontinuation of the Grover Card payment card, leading to the termination of its collaboration with the technology rental platform Grover. This development marks the loss of another prominent partner for Solarisbank, following the recent withdrawal of half a million customer accounts by Neobank Vivid earlier this year.

Berlin-based fintech Trade Republic has achieved a significant milestone by obtaining a full banking license from the German financial supervisory authority, BaFin. This development places Trade Republic alongside prominent fintech banks like N26 and Solaris, expanding its capabilities beyond its current status as a securities trading bank. Previously, the broker partnered with licensed banking partners like Deutsche Bank.

Amy O'Brien published an interesting article on BaaS on Sifted, elaborating on the regulatory hurdles for BaaS providers. The European fintech sector, with 61 unicorns, would now face a regulatory storm. Most notably, the prevalent Banking-as-a-Service (BaaS) model, which fueled the rapid growth of companies like Revolut and Wagestream, is under regulatory scrutiny. Investors shy away from the €100 billion market!

In 2007, the European Union introduced a directive promoting payment service providers as a competitive alternative to traditional banks. However, in the post-Wirecard era, where the German financial watchdog BaFin faced criticism for its oversight, there's a renewed focus on regulating these entities. The rationale is clear: FinTechs and neobanks are increasingly seen as potential avenues for money laundering.

The Berlin-based fintech Solaris closed the fiscal year with net revenues of  €130 million, a growth of 30% compared to the previous year, but a net loss of €56 million, and a 33% increase compared to 2021. Solaris announced the €38 million first close of its Series F round, led by existing investors at a valuation of €1.6 bill

The German financial regulator Bafin is tightening its control of the prominent Berlin-based fintech Solaris. A "permission proviso will apply to the institute in the future with regard to new partnerships," Solaris CEO-designate Carsten Höltkemeyer told the German Handelsblatt. "So we have to get the green light from Bafin before we are allowed to take on new customers." This requirement is exceptional for the German banking sector. Solaris has acquired a reputation for facilitating scam operators.

Listed NAGA Group announced that it is launching a VISA-approved card program in partnership with Solaris Group and its UK and Lithuanian-regulated Contis Group through its NAGA Pay scheme. As with other such crypto cards or, for example, Binance, NAGA users will be able to spend both fiat and crypto in real-time at the point of sale. The NAGA Pay app will unlock the "Pay with Crypto" feature for all customers in the app stores on 7 Sept 2022, the company said. NAGA Group recently announced that its 2020 and 2021 financials would not be accurate because of an error by auditor EY.

Crypto Winter officially arrived in Germany. Berlin-based digital bank Nuri filed for insolvency only two months after announcing layoffs. The crypto fintech struggled with the rout in crypto prices, and economic uncertainty. Nuri was not able to find fresh funds. In a statement, the company said that despite the filing, customers would still have full access to their current accounts (euros) and their crypto wallets and vaults (bitcoin & ether) and can continue withdrawing funds. 

Over the last few years, we have found Berlin-based Solarisbank as a facilitating payment processor in many scams. In February, the German regulator BaFin sent a special auditor to the bank because of alleged money laundering problems. Now the German bank has dropped the term "bank" from its name and just calls itself Solaris. It wants to focus on the company's technical DNA and be perceived as a technology company rather than a bank. The strategic focus is, therefore, on the Banking-as-a-Service (BaaS) offering for other FinTechs.