N26 has become the latest major FinTech challenger to encounter regulatory scrutiny, following reports that German regulator BaFiN has called for reforms at the digital challenger bank.

Inquiries into operations in the bank, which launched in the UK in November last year, have reportedly highlighted a number of issues.

According to Handelsblatt, the regulator has ordered N26 to address staffing, outsourcing and engineering issues.

Customers have also reportedly experienced delays in getting a response from a chatbot or email communications.

A spokeswoman for BaFin said the regulator was unable to comment on specific cases.

N26 briefly became Europe’s most valuable FinTech unicorn after closing a $300 million funding round that valued the company at $2.7billion in January.

In a statement, N26 co-founder Valentin Stalf said: “As all licensed banks, N26 is subject to regular internal and external independent audits, including those by the German financial regulatory body BaFiN.

“Regular audits are therefore business as usual for a bank. It is normal that during such an audit regulators identify points of improvement. We take the findings of every audit very serious and address areas of improvement as quickly as possible.”

He said the bank would continue to invest in both security measures and customer service staff in the coming months, as it continues a recruitment drive that has seen its 500-person workforce double to 1,000 since August 2018.

Stalf added: “We know that with growth comes increased responsibility and we take that responsibility very seriously, we will continue to invest heavily in both our security measures and our customer service over the coming months.”

Share Story: