The online bank N26 is due to security vulnerabilities in the criticism. Now the financial supervision Bafin has turned on – and ordered drastic measures.
The BaFin Financial Supervisory Authority has ordered the Berlin-based online bank N26 to step up its fight against money laundering and terrorist financing. The bank must take „appropriate internal safeguards“ and comply with general due diligence, it says in the order.
This public order is seen by experts as a drastic measure of financial supervision. Among other things, the N26 now has to re-examine a certain number of customers because there seems to be doubts about their identity.
Bank has to define work processes in writing
The BaFin also urges the bank to ensure that money laundering is prevented by having a sufficient number of employees and appropriate technical and organizational equipment. In concrete terms, the institute had to catch up on backlogs in the computerized monitoring of account movements and also set out workflows in writing to Bafin.
A bank spokeswoman said the N26 took the order very seriously and was sure to be able to implement all the requirements of the Financial Regulator in time: „So we are working hard on all unprocessed cases of transactions that have been identified by our systems as irregular or conspicuous. “ They have already processed about 90 percent of these cases and will complete the processing by the end of next week.
Money laundering through fake shops
In recent months, there have been repeated reports of deficient security measures in the N26. Thus, research by NDR and „Süddeutsche Zeitung“ showed that nearly 400 accounts of the online bank for money laundering of Internet Fakeshops were used. Criminals had taken control of N26 accounts without the account holders noticing.
In these cases, the bank often did not succeed in detecting suspicious account movements in a timely manner and closing such fraudulent accounts promptly. With 2.5 million customers, N26 is one of the most successful and valuable financial startups in Germany. Investors rate the smartphone bank with more than two billion euros.
