BaFin Fines N26 €9.2 Million Over Anti-Money Laundering Failures

Germany's financial regulator BaFin has imposed a €9.2 million fine on digital bank N26 for systematic delays in reporting suspected money laundering cases in 2022.

Credit institutions are required to promptly file suspicious activity reports to Germany's Financial Intelligence Unit if they detect potential money laundering or terrorist financing. However, BaFin found that N26 was consistently late in submitting these reports last year.

Timely reporting is crucial to allow regulators to take swift action against financial crimes when necessary. By delaying the filings, N26 violated German anti-money laundering laws. In a statement, N26 acknowledged the lapses and said it had implemented a series of measures since 2022 to enhance its reporting processes. The bank stated it invested over €80 million to fully comply with financial crime and anti-money laundering standards.

N26 is not the first financial institution penalized by BaFin for anti-money laundering shortcomings. In March, Commerzbank was fined €1.45 million for failing to promptly update customer data and lacking adequate security measures after acquiring Comdirect. Both cases underscore increased scrutiny by German regulators to crack down on lapses that could enable money laundering and illicit financial flows.

Despite the costly penalty, N26 continues its European expansion. In April, the digital bank rolled out a joint account offering in Ireland and 20 other markets, allowing customers to efficiently manage shared finances through the N26 app.

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