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Bank of Italy bans N26 from onboarding new customers over AML failings

Bank of Italy bans N26 from onboarding new customers over AML failings

The Bank of Italy has imposed a ban on the recutiment of new customers by digital bank N26 following an on-site inspection which uncovered lax money laundering controls.

The Italian central bank has banned N26 from taking on new customers and from offering new cryptoassets services to existing customers after uncovering shortcomings between 25 October and 17 December 2021.

In a statement, the Bank of Italy says: "N26 Bank has taken a number of actions to remedy these shortcomings. The Bank of Italy intends to verify that all the anomalies detected have been addressed, also for the purpose of revising the measure."

It's not the first time N26 has been found short in its AML procedures. The digital bank has been facing heightened scrutiny from German regulatory authorities over the past two years.

In September last year it was fined €4.25 million over failures in anti-money laundering by German supervisor BaFin.

In May, the watchdog appointed a special commissioner to monitor the fintech giant's compliance with an order to implement appropriate internal controls and safeguards and comply with general due diligence requirements.

In the intermin, BaFin imposed a temporary cap on the number of new customers the digital challenger is allowed to onboard each month.

Under the provisions, N26 - which is currently valued at $9 billion and is eyeing a 2024 IPO - can only accept between 50,000 and 70,000 new customers a month until it addresses the issues raised by BaFin.

Comments: (1)

A Finextra member
A Finextra member 31 March, 2022, 09:15Be the first to give this comment the thumbs up 0 likes

Valued at 9 billion USD? Is this "value" based on the money investors have spent on the company so far? What if one makes a valuation based on cash flow, ROE and PBT?