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

By Amelia Isaacs on Friday 1 April 2022

Digital Banking

In the latest punishment for N26 over AML shortcomings, the bank is banned from taking on new customers in Italy.

Bank of Italy bans N26 from onboarding new customers over AML failings
Image source: Co-CEOs Maximilian Tayenthal and Valentin Stalf/N26.

Italy’s central bank has banned German digital bank N26 from taking on any customers after checks last year flagged money laundering risks.

The Bank of Italy is also banning the bank from offering new products and services, such as crypto assets, to any existing customers.

It uncovered the shortcomings between 25 October and 17 December last year.

This is not the first time N26 has come under fire for its lax anti-money laundering (AML) procedures. 

The digital bank has been facing heightened scrutiny from German regulatory authorities over the past two years.

Last May, BaFin told the bank it had to improve its AML capabilities ahead of being hit with a  €4.25m fine in September and being forced to limit its customer growth in October.

The watchdog appointed a special commissioner to monitor the fintech’s compliance and imposed a temporary cap of 50,000 – 70,000 new customers per month.

"N26 Bank has taken a number of actions to remedy these shortcomings,” the Bank of Italy said in a statement. 

"The Bank of Italy reserves the right to assess [if] the anomalies have been fully overcome, before considering revising the current decision."

This latest issue for N26 comes just weeks after co-CEO Maximilian Tayenthal said the fintech could go public 2024, but that it is “not stressed” to do so anytime soon.

The bank applied for a Financial Holding licence last year as its “next step towards IPO-readiness”.

It also completed a $900m funding round last year, reaching a valuation of $9bn.

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Companies in this Article:

BaFin
N26
October

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