Germany’s financial regulator BaFin has extended money laundering controls at digital bank N26 due to the ongoing “deficiencies” in its systems.
In 2021, BaFin fined N26 €4.25 million for insufficient money laundering controls and imposed a temporary limit on the number of new customers the bank could onboard each month. The cap, set at 50,000 new customers monthly, remains in effect and is now supplemented by an audit presence at the bank to monitor progress.
BaFin is calling for improved IT monitoring, enhanced quality assurance, and effective outsourcing controls. In response, N26 stated to Reuters that it has “made significant investments in anti-money laundering measures” and is “committed to comply with all aspects of the order as quickly as possible.”
In May, N26 announced plans to reduce its workforce by 4%, affecting 71 employees, as part of efforts to navigate a challenging macroeconomic environment. This decision followed the German insurance giant Allianz’s move to sell its five percent stake in N26 at a significant discount. The insurer’s venture capital arm engaged an adviser to facilitate the sale of its stake at a $3 billion valuation, a sharp decline from N26’s previous $9 billion valuation during its last funding round in October 2021.