Tuesday, November 9th, 2021
Internet bank under fire
Bafin imposes growth brake on N26
This is not the first time that the Berlin smartphone bank N26 has been targeted by financial regulators. After the company had to pay a fine for deficiencies in combating money laundering, the Bafin now wants to curb the strong growth of the most valuable German fintech.
The financial supervisory authority Bafin is not giving up on the Berlin internet bank N26. For the second time within a few months, it appointed a special representative to monitor whether the expanding institute is remedying its deficiencies in risk management, as the Bafin announced. The bank must now eliminate the weaknesses within a specified period.
The shortcomings were related to the bank’s recent strong growth. On request, N26 stated that the financial institution was in regular and trusting exchanges with the supervisory authorities. The bank is convinced that it will be able to implement all findings in full and on time. The financial supervisors ordered, among other things, to limit customer growth at the expanding bank. The bank can now grow a maximum of 50,000 new customers per month. The new special representative should report on the implementation of the steps on an ongoing basis.
This year the bank had reached the mark of seven million customers and most recently had more than 1,500 employees. In the latest financing round, the Handybank had raised more than $ 900 million in October. With a valuation of nine billion dollars, N26 is Germany’s most valuable fintech company.
The company, founded in 2013 by Valentin Stalf and Maximilian Tayenthal, had already been targeted by the financial supervisory authorities due to deficiencies in the fight against money laundering. Because of the weak points, N26 had to pay a fine of millions to the Bafin. It is not often that the Bafin obliges a bank to pay such a heavy fine. For the first time in May, the supervisory authority appointed a special representative to monitor the improvement of internal processes and IT systems.