Germany's financial regulator BaFin has extended money laundering controls at digital bank N26 after noting there were still "deficiencies" in its systems.
In 2021, the watchdog fined N26 €4.25 million over lax money laundering controls and then imposed a temporary cap on the number of new customers the lender was allowed to onboard each month.
The cap - set at 50,000 new customers a month - remains in place and has been augmented with an audit presence at the bank to monitor progress.
BaFin is demanding more adequate IT monitoring, stepped up quality assurance and the establishment of effective outsourcing controls.
In a statement to Reuters, N26 says it has "made significant investments in anti-money laundering measures" and is "committed to comply with all aspects of the order as quickly as possible".
In May, N26 moved to cut four percent of its headcount, impacting 71 jobs, in response to challenging maro-economic business climate.
Intended to sharpen its focus on its most important strategic priorities, the job cuts came just a month after German insurance giant Allianz moved to sell its five per cent stake in the bank at a sharp discount.
The insurer's venture capital arm called in an adviser to hawk its stake at a $3 billion valuation, down from N26's $9 billion price tag at its last funding round in October 2021.