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German regulator BaFin imposes a hefty $5 million penalty on digital banking company, N26, for unattended deficiencies in AML compliance program
BaFin, the federal financial regulator of Germany, imposed a $5 million non-compliance penalty on N26 – Berlin-based digital neobank. As per the details, the bank failed to timely report money laundering transactions that were categorised as suspicious, accounting for wilful negligence towards suspicious activity reporting (SAR) obligations.
The German watchdog issued a statement ordering a fine worth €4.25 million equivalent to $5 million. The regulator imposed the penalty in June this year due to anti-money laundering deficiencies which took place earlier in 2019 and 2020.
In May 2021, BaFin directed N26 bank to come up with better internal controls in order to prevent financial crime (money laundering and terrorist financing), and rectify potential inadequacies in customer due diligence (CDD) procedures.
Owing to the Wirecard AG collapse last year, BaFin has increased regulatory scrutiny to recover from reputational damage. While N26 bank, which is eyeing on an initial public offering, shares its initiative towards combating financial crime better,
“We take responsibility in the fight against the growing threat of global financial crime, and in the prevention of money laundering, very seriously.”
The bank further mentioned that it completely paid the fine on July 14, adding that all processes related to the case have been closed. According to the bank’s states-person, the case involved fewer than 50 suspicious activity reports, with an official message from BaFin expected shortly.
Suggested Read: BaFin Demands Deutsche Bank to Tighten its AML Controls