Fleet Financing

N26 fined nearly $ 5 million for AML deficiencies


German financial watchdog BaFin blasted online bank N26 for weak anti-money laundering (AML) controls and fined 4.25 million euros ($ 4.93 million) to the digital banking platform, according to a report published Wednesday, September 29, in the Financial Times. .

BaFin has ordered N26 to strengthen its AML protocols twice since 2019 and in May made the unusual decision to appoint a special supervisor to monitor the bank.

N26 paid the penalty of nearly $ 5 million in July. The company said in a statement it was linked to the late filing of nearly 50 suspicious activity reports in 2019 and 2020.

Germany’s largest online bank, ING Germany, was criticized in court by a BaFin representative on Tuesday, September 28 for being slow to respond to suspicious transactions from a customer, who later admitted to sweeping a insider trading.

N26 was valued at $ 3.5 billion in a 2020 fundraiser and said earlier this year that it was working to go public, according to the FT report.

The company has raised nearly 800 million euros (over $ 927 million) from investors such as Tencent, Allianz X and Peter Thiel. It claims to have over 7 million customers in 25 countries.

“All measures to improve reporting of suspicious activity were implemented earlier this year,” N26 said in a company statement on Wednesday, adding that it is assuming its “responsibility in addressing the growing threat. global financial crime and money laundering prevention, very seriously.

N26 said it has taken “many detailed steps” to strengthen its anti-financial crime controls.

Related: EU banking authority urges regulators to study bank risks and big tech links

The European Banking Authority (EBA) said last week that regulators are unaware of the risks associated with the creation of digital markets by banks, stressing the need to create a framework to identify potential problems that could arise in as the bonds grow stronger.

In a report published by the EBA in June, the watchdog also put forward proposals to boost the EU adoption and use of RegTech, which is mainly used to protect against money laundering. money, fight against terrorist financing and prevent fraud as well as for prudential reporting, ICT security and credit assessments.

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