BaFin will lift growth restrictions on N26

European digital bank N26 announces that the German Federal Financial Supervisory Authority (BaFin) has lifted growth restrictions imposed on the company with effect from June 1.

The move follows N26’s investment in teams and infrastructure to combat financial crime and money laundering, the company said in a press release on Monday (May 27).

These efforts will continue once growth restrictions are removed, similar to N26’s collaboration with BaFin, according to the release.

According to the release, in line with BaFin restrictions, N26 was limited to adding 60,000 new customers per month.

BaFin fined N26 nearly $5 million in September 2021 after ordering the company to improve its anti-money laundering (AML) protocols twice in the past two years and taking the unusual step of appointing a special supervisor to monitor the online bank.

N26 said in a statement at the time that the penalty was related to the late filing of nearly 50 suspicious activity reports in 2019 and 2020.

The company left the US market in 2022, deciding to focus its efforts on Europe.

Over the past two years, N26 has invested more than €100 million in compliance, infrastructure and anti-money laundering and financial crime teams, according to a press release on Monday.

The infrastructure the company added includes intelligence-based models that analyze customers’ fraud potential before opening an account, as well as self-learning transaction monitoring systems that detect suspicious activity in real time, according to the release.

“We are pleased with the confidence of our regulators and will continue our close exchange of views in the future,” Valentin Stalf, CEO of N26, said in the release.

Maximilian Tayenthal, co-CEO and COO of N26, added in the release: “Our infrastructure and the use of modern intelligence-driven technologies enable us to detect and combat money laundering and fraud in real time.”

PYMNTS Intelligence found that in the United States, 48% of financial institutions are adding or will add new technology systems to combat fraud in the next year.

According to “The State of Fraud and Financial Crime in the US 2023,” a collaboration between PYMNTS Intelligence and Hawk AI, the amount these organizations lost to fraudulent transactions nearly doubled between 2022 and 2023.