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N26 is the latest fintech unicorn to face regulatory scrutiny

Following the travails at Revolut and Wirecard, another fintech starlet - N26 - has landed itself in hot water with the regulators over lax management practices.

  26 3 comments

N26 is the latest fintech unicorn to face regulatory scrutiny

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

The app-only bank is reportedly being probed by German regulators following complaints about fraudulent transactions and deficiencies in customer communications.

The issues were first raised by German newspaper Handelsblatt in October, prompting Bafin to to launch a probe which has allegedly uncovered numerous shortcomings.

According to Handelsblatt, customer complaints of fraudulent transactions were either ignored or not responded to for several weeks. Users said they were unable to get a response through N26's chatbot or by email, which were the only means of talking to staff.

Bafin's investigation uncovered problems in staffing, outsourced task management and engineering, according to reports.

N26 says it has tripled the number of staff in its customer complaints division in the past year and will respond to other issues in consultation with regulatory authorities.

Other high growth startups in the fintech space have been under intense scrutiny in recent months following allegations of fraudulent accounting (Wirecard), AML deficiencies (Revolut) and - in Revolut's case - a toxic management culture.

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Comments: (3)

A Finextra member 

If Fintech's have any hope of competing with the key banking players who, while generally disliked by consumers, are still highly trusted, they need to get their act together and always put customers first. 

A Finextra member 

Since the PSD2 go-live banks and other PSP:s have the legal requirement to resolve  a customer complaint on wrongful payments within the next business day. The fintech banks should build a robot that pays back to the customers immediately if they do not have staff to look into complaints.

Ketharaman Swaminathan

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

I notice a constant trend, not only with fintechs but even new-age giants like Amazon: Mostly everything works as advertised and in a highly frictionless manner, ergo good CX. However, if something fails, getting it fixed is quite hard, ergo bad Customer Service. With a Bank, even if it's hard to get something fixed, I trust that I will eventually succeed in that endeavor. Whereas, I don't have that trust with fintechs like PayTM, as I pointed out in PayTM Shows How Fintechs Can Lose Trust. Looks like it's the same with other fintechs.

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