N26 under fire from BaFin over money laundering failures

N26 under fire from BaFin over money laundering failures

German app-only bank N26 has been reprimanded by regulatory body BaFin for lax anti-money laundering controls.

Like other fast-growth fintechs such as Revolut, N26 has come under the spotlight for failures in fulfilling customer due diligence obligations.

Following a probe, BaFin has ordered N26 to remove backlogs in IT monitoring, establish process descriptions and workflows in writing, and re-identify a specified number of existing customers.

The banking startup has also been ordered to improve staffing levels and technical equipment in order to comply with its obligations under money laundering law.

Deficiencies in anti-money laundering are not just confined to startup challengers in the German market. Deutsche Bank, which has been embroiled in a series of money laundering scandals, recently uncovered a software glitch in its anti-money laundering software that had screwed with its compliance procedures for almost a decade.
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