Italy’s central bank has banned N26, the Germany-based neobank giant, from onboarding new customers or offering new products. Italian regulators have flagged N26 for its weak AML procedures.

Why should we care?
N26’s AML regulatory issues in Italy rhyme with its dealings in Germany. In September 2021, Germany’s financial supervisory authority, BaFin, fined N26 €4.25 million for failing to comply with AML laws. BaFin also limited the number of new clients N26 can onboard within a given time frame; it can now only accept between 50,000 and 70,000 new customers per month in Germany. With an outright ban on onboarding in Italy, this latest regulatory response from Italy’s central bank suggests N26 has a long way to go before its AML processes meet regulatory standards—and an even longer way to go before it can get back to scaling as quickly as it wants. N26 has said it may be eyeing a 2024 IPO, though the company’s founder and co-CEO, Maximillian Tayenthal, said that private markets have been “incredibly liquid.” N26 will probably continue delaying its IPO as long as its relationship with regulators—and, therefore, its $9B valuation—remain in purgatory.