The activities of N26a well-known fintech bank, are forced to one forced stop following the provision adopted last Monday by the Bank of Italy. There Italian branch by N26 Bank manifested “significant shortcomings in compliance with anti-money laundering legislation“. The provision comes at the end of the inspection activity carried out by the Bank of Italy in the period between 25 October and 15 December 2021.
It is one temporary stop waiting to establish whether the initiatives implemented to correct the shortcomings highlighted will be deemed adequate by the supervisory body. The provision has various consequences for both new and existing customers of N26 Bank.
THE EFFECTS OF THE TEMPORARY STOP
N26 will not be able to engage in operations with new customers – as such, those that have not already been registered at the date of the Bank of Italy provision, ie last March 28th, are understood as such. It is therefore forbidden for the bank to open new ongoing relationships and to carry out any type of transaction, even occasional, with new customers.
In relation to the already customers is fixed on ban on offering new products and services. Bank of Italy expressly cites as an example the activities related to cryptocurrencies, an area in which N26 was recently moving, as evidenced by the clues that emerged in the official app. On the other hand, there is no negative consequence on the operations that can already be done through existing accounts. N26 underlines in this regard: the ban will have no impact on the bank’s existing customers, whose accounts will continue to be fully operational and secure.
THE ANSWER OF N26
N26 can only take note of the imposed prohibition and confirm the will of continue to intensify investments in anti-money laundering:
N26 was the subject of a series of measures by the Bank of Italy, which identify the bank’s weaknesses and areas for improvement in the anti-money laundering area. N26 intends to continue strengthening its safeguards in this area in order to remove the identified shortcomings […] In light of the Bank of Italy provision, N26 recognizes the need to continue to commit itself to strengthening its overall system of anti-money laundering controls, addressing all the areas for improvement outlined by the Bank of Italy. The bank confirms that a remedy plan is being implemented to remove the shortcomings of the Italian branch and to allow the Bank of Italy to verify the complete overcoming of the weaknesses on the anti-money laundering front at the origin of the measure adopted.
Among the initiatives already adopted to improve the prevention of money laundering, the bank recalls the strengthening of dedicated staff, the development of a supporting IT infrastructure, the use of machine learning and the strengthening of transaction monitoring. Important steps forward, but not yet sufficient to obtain the green light from the Bank of Italy.
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