Germany’s market regulator has ordered mobile bank N26 to improve its anti-money laundering (AML) controls, taking the unusual move to appoint a “special commissioner” to monitor its progress.
BaFin on Tuesday mandated the challenger bank to fix problems with its IT monitoring and customer due diligence to prevent money laundering and terrorist financing. The regulator warned N26 must implement appropriate internal controls and other safeguards within an unspecified set timeframe.
N26 has also been told to ensure it has the adequate personnel, technical, and organizational resources to comply with its obligations under AML law.
The order comes two years after BaFin first reprimanded N26 for lax AML controls. The regulator’s latest announcement does not say whether the bank has actually suffered any breaches.
BaFin’s appointed special commissioner will monitor the firm’s compliance with the order and report progress back to the regulator.
This is only the second time German authorities have appointed a special commissioner to monitor a bank for money laundering failings. The first occasion was with Deutsche Bank in 2018 following fines worth $671 million from U.S. and U.K. authorities. The bank is still subject to the arrangement.
N26 said it is working closely with the regulator to improve its systems and implement the orders.
Recently, BaFin has come under pressure over its perceived oversight failures in the wake of the Wirecard scandal, which saw Felix Hufeld, the regulator’s president, lose his job in January.
Neil Hodge is a freelance business journalist and photographer based in Nottingham, United Kingdom. He writes on insurance and risk management, corporate governance, internal audit, compliance, and legal issues.
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