Fight against money laundering: Bafin is tearing patience with N26

Fight against money laundering
Bafin is tearing patience with N26

In the opinion of the financial supervisory authority Bafin, Neobank N26 does not act decisively enough against money laundering and fake shops. The bank supervisors are therefore considering prohibiting fintech from accepting new customers. This would not only affect the current financing round.

The trouble between Neobank N26 and the financial supervisory authority Bafin does not seem to end. According to “Handelsblatt” information, the authority is considering restricting the Berlin startup’s new customer business. The Bafin is therefore bothered by the fact that deficiencies in the organization and in the fight against money laundering and other illegal transactions are only dealt with by dragging. “The patience of the bank supervisors has been torn,” the newspaper quotes sources that are “familiar with the subject”.

Opening an account with N26 without revealing too much about yourself is comparatively easy. The company is therefore struggling with money laundering and fake shops. The Bafin issued a warning to N26 for the first time in 2019. However, the measures taken so far against this do not go far enough for the Bafin. The “Handelsblatt” recently reported on a list of around 1600 allegedly illegally used accounts.

A ban on accepting new customers could not only damage the company’s reputation but also jeopardize international expansion. The measure would come at the wrong time for the growing fintech, because it is in the middle of a large financing round. N26 has grown rapidly in recent years and now has 1,500 employees and seven million customers. After the last round of financing a year ago, N26 was valued at $ 3.6 billion, making it one of the most valuable German startups.

Both N26 and the Bafin did not want to confirm the reports. However, under the growing pressure of the smartphone bank, the fight against money laundering is moving to the top management floor in the future. For this purpose, a risk board member is appointed at the level of the entire group of companies, as the startup explained. The role will be taken over by the managing director of N26 Bank, Thomas Grosse, in addition to his previous duties. According to N26, Grosse came to the Berlin company in 2019 and previously worked for Deutsche Bank, among others. Grosse is supported by a representative for the fight against money laundering.

“The expansion of our management structures in the areas of governance, compliance, risk management and anti-money laundering is an important step on our growth path towards a global digital bank,” said founder Valentin Stalf. We are aware of our special responsibility as a digital pioneer and therefore maintain an open and constructive relationship with the supervisory authorities.