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BaFin lifts N26 customer onboarding cap

After more than two years, Germany's financial regulator BaFin has lifted a cap on the number of new customers that digital bank N26 can onboard.

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BaFin lifts N26 customer onboarding cap

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BaFin imposed a temporary cap on the number of new customers the lender was allowed to onboard in 2021. The cap was set at 50,000 new customers a month before being increased to 60,000 last year.

N26 says that the restrictions will end on 1 June following a period of "close exchange" with BaFin to combat financial crime and money laundering.

The move comes weeks after BaFin imposed a €9.2 million fine after concluding that in 2022 N26 systematically submitted suspected money laundering reports late.

The digital lender says it has, over the last two years, spent more than €100 million on compliance and its infrastructure and teams to combat money laundering when it ramps up customer onboarding.

Technology including "sophisticated intelligence-based models" that analyse the fraud potential of individual customers before they even open an account and "self-learning transaction monitoring systems" have been introduced.

Maximilian Tayenthal, co-CEO and COO, N26, says: “Our infrastructure and our use of modern, intelligence-based technology enable us to detect and combat fraud and money laundering in real time. We want to play a pioneering role among European banks in this field over the next few years.”

Co-CEO Valentin Stalf tells the Financial Times that the cap has cost N26 billions: "The impact on N26 surely amounts to billions of euros because it lowered the company’s valuation as we were unable to grow."

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