N26 Bank: BaFin restricts new customer intake

Ever since everyone started talking about mobile payments via NFC using smartwatches, the bank startup N26 has enjoyed growing popularity. However, BaFin (German Federal Financial Supervisory Authority) has now put a stop to this growth. Due to acute deficiencies in IT risk management, N26 Bank is only allowed to accept 50,000 new customers per month.

N26 Bank with restrictions

The smartphone bank N26 has to sharply curb its strong growth by order of the Federal Financial Supervisory Authority. Henceforth, only 50,000 new customers per month may be accepted and that even across all 25 countries in which the Berlin-based startup operates.

In addition, the exposure value for risk positions, which N26 achieves primarily through real estate, may no longer exceed the amount of 500 million euros. As the financial regulator revealed in a statement, the new conditions were already pronounced on 05 October. Since 06 November, the conditions are legally binding, because an objection on the part of the bank failed to materialize.

N26 in the focus of BaFin

In order to monitor the implementation of the ordered measures, BaFin has appointed a special representative. The special representative is to report to BaFin on the implementation progress on an ongoing basis.

“Depending on the progress in remedying the deficiencies, the risk-mitigating measures may be adjusted in stages after review by BaFin and in consultation with the special representative,” the statement said.

Thus, N26 Bank is once again in the focus of the authorities. Back in May 2021, there was a requirement from BaFin that forced the bank to get a handle on problems with the prevention of money laundering and terrorist financing.

At the end of June, the regulator had imposed a fine of EUR 4.25 million on N26 for a high number of late SARs in this area. Most recently, the company had also come under criticism for glaring deficiencies in its employee and corporate culture.