German challenger bank N26 is reportedly being told by the country’s banking regulator BaFin to improve its response to fraud.
BaFin identified a number of practice failures within N26, which have allegedly occurred due to the bank’s rapid growth but an inability to adjust structures in a similar manner, according to a report from Handelsblatt.
Following an investigation, BaFin found an instance where a customer of the bank had reported €80,000 was stolen from their account, it said.
Customers complaining about fraud attacks reportedly failed to hear from the bank for weeks, and other banks had also reported poor communication response times from N26.
Threats were placed on N26 that if it was unable to make the necessary changes there would be a cap on the deposits it can take, the article said. N26 is working closely with the regulator to ensure it can make the amendments.
N26 has seen a tremendous growth over the last couple of years. Earlier in the year, the challenger bank closed a $300m Series D financing round which valued the company at a colossal $2.7bn, making it one of the few FinTech unicorns.
Prior to this, the company closed a $160m Series C round to support its expansion into the US market.
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