BaFin Fines N26 €9.2m Over Money Laundering Failures

BaFin fines N26 €9.2 million for late money laundering reports, yet may soon lift the cap on the digital bank’s new customer onboarding

German financial regulator BaFin has imposed a €9.2 million fine on digital bank N26 for failures in its anti-money laundering (AML) controls, yet may soon lift the cap on the number of new customers the bank can onboard.

BaFin concluded that in 2022, N26 systematically submitted suspected money laundering reports late, leading to the hefty penalty. This fine is the latest chapter in a series of regulatory actions regarding N26’s AML controls.

In 2021, BaFin had fined the bank €4.25 million and imposed a temporary cap, limiting the number of new customers to 50,000 per month. The cap was extended last July, as BaFin identified ongoing deficiencies in N26’s systems, including inadequate IT monitoring, quality assurance, and outsourcing controls.

However, Bloomberg reports that the regulator is considering lifting the customer cap as early as this year.

In response, N26 stated that it has implemented numerous measures since 2022 to improve its reporting processes. The bank has invested over €80 million in personnel and technical infrastructure to uphold the highest industry standards in combating financial crime and money laundering.