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.
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."