N26 and BaFin: Why is the relationship perpetually complex?
N26, the Berlin-based neobank, has been in a long-standing conflict with BaFin, Germany's Federal Financial Supervisory Authority, since 2018. The dispute, which has resulted in criticism, million-dollar fines, and requirements, has been marked by a series of interventions and criticisms from BaFin.
In 2021, BaFin imposed a growth brake on N26, citing concerns about the bank's rapid expansion. The primary accusation against N26 was that the neobank grew too quickly. The bank, however, has maintained a trusting and constructive relationship with BaFin, but has not commented on the content of the criticism.
The growth brake lasted for nearly three years, ending in June 2024. This marked a significant milestone for N26, as they celebrated the end of the long-standing restriction. In the same month, BaFin lifted the growth restriction, allowing N26 to win new customers without limits.
The conflict between N26 and BaFin resurfaced in 2025, this time due to concerns about N26's Dutch subsidiary, Neo Hypotheken. BaFin expressed worries about Neo Hypotheken's use of local risk standards in the Netherlands, which deviate from the stricter German rules demanded by BaFin. However, as of now, there is no publicly available information regarding BaFin intervening with N26 specifically about Neo Hypotheken in 2025.
N26 founded Neo Hypotheken, a Dutch subsidiary focused on mortgages with state guarantees, in 2023. The subsidiary operates with a license from the Dutch financial market authority (AFM). BaFin has not disclosed specific details about the criticism levied against N26, citing its confidentiality obligation. Similarly, the outcome of BaFin's intervention, including any new requirements for N26, remains open.
Despite the ongoing conflict, N26 has been cooperative, addressing concerns as they arise. For instance, in 2024, BaFin criticised N26 for not sufficiently documenting risks in the mortgage business and analyzing them too slowly. N26 has not commented on the content of the criticism from BaFin.
For the most accurate and up-to-date information, it is advisable to check official BaFin press releases or reputable financial news outlets. As this is an evolving situation, further developments are expected.
What about N26's involvement in Dutch business and finance through its subsidiary, Neo Hypotheken, has recently become a concern for BaFin? Is technology playing a role in this new dispute, given the deviation of local risk standards in the Netherlands from the stricter German rules demanded by BaFin?
