After more than two years, Germany’s financial regulator BaFin has lifted the cap on the number of new customers that digital bank N26 can onboard.
BaFin initially imposed a temporary limit on N26’s customer acquisitions in 2021, starting at 50,000 new customers per month and later increasing it to 60,000. This restriction will be removed on June 1, following a period of close communication with BaFin aimed at addressing concerns related to financial crime and money laundering.
This development comes shortly after BaFin issued a €9.2 million fine to N26, citing that the bank had repeatedly submitted suspected money laundering reports late in 2022.
In response to the challenges posed by the cap, N26 has invested over €100 million over the past two years to enhance its compliance measures and infrastructure. The bank is now equipped with advanced technological solutions, including intelligence-based models for analyzing the fraud potential of customers before account opening, and self-learning systems for transaction monitoring.
Maximilian Tayenthal, co-CEO and COO of N26, stated, “Our infrastructure and our use of modern, intelligence-based technology enable us to detect and combat fraud and money laundering in real time. We aspire to take a pioneering role among European banks in this area in the coming years.”
Co-CEO Valentin Stalf indicated to the Financial Times that the cap has resulted in significant financial consequences for N26: “The impact on N26 surely amounts to billions of euros because it lowered the company’s valuation as we were unable to grow.”