N26: High penalty for inadequate anti-money laundering efforts

Berlin (dpa) – The smartphone bank N 26 has to pay a fine of millions to the financial supervisory authority Bafin for inadequately combating money laundering. This was announced by the supervisory authority on Wednesday.

The Berlin start-up was accused of not having resolved enough to investigate suspected cases. In doing so, the bank violated the law on tracing profits from serious crimes. In May, the Bafin had already appointed a special representative to keep N 26 on the fingers.

N 26 admitted that in the years 2019 and 2020 “fewer than 50 reports of suspected money laundering” were submitted to the Bafin late. The fine of 4 25 million euros was paid on time in June, the bank said. According to the Bafin, the notice of the fine has been in effect since 15. July becomes final.

The amount of the fine for N 26 is exceptionally high. In the past year, Bafin set fines totaling almost 8.5 million euros across all business areas, including a total of just under 400. 000 Euro for the areas of banking supervision, money laundering prevention and insurance supervision.

Next financing round already in sight

With the conclusion of the fine proceedings, N 26 a big possible stumbling block for a next round of financing out of the way. In addition to the fine, according to media reports, the Bafin even considered imposing restrictions on new business against N 26. These far-reaching sanctions are now probably off the table. According to information from financial circles, the company wants to collect several hundred million dollars for further expansion. . N 26 take its responsibility in the fight against the global increase in financial crime and in the prevention of money laundering very seriously. “In the past few months in particular, we have taken numerous far-reaching measures and established structures and processes that meet the highest standards and at the same time set new standards in the industry.” This means that N 26 will continue to be well positioned against criminal activities in the future – especially in connection with the constantly growing online trade.

Banking app as a core offer

N 26 is one of the so-called smartphone banks whose core offering is a banking app for mobile phones. These financial institutions are also known as “neobanks”. N 26 has won seven million customers so far. Investors involved in N 26 include the German insurance company Allianz, the Singapore state fund GIC, the Chinese internet giant Tencent, Earlybird and the German-American investor Peter Thiel. According to expert estimates, a new round of financing could raise the start-up’s valuation to just under ten billion euros New appointments to the top management because Georg Hauer, the previous head of Germany, is leaving the company. His new employer, the Munich start-up Hawk AI, specializes in the detection of money laundering attempts. This is the area that N 26 had now entered the expensive complaint from the Bafin.

Hauer, like the two company founders Valentin Stalf and Maximilian Tayenthal, comes from Vienna. He was 2019 appointed head of Germany. Most recently, Hauer was responsible for the entire German-speaking region and Northern Europe. N 26 stated that the search for a successor was “already advanced”.

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