Dutch Neobank Bunq Fined $3 Million For Failing Money Laundering Controls

The Dutch central bank, De Nederlandsche Bank (DNB), has fined the neobank bunq €2.6 million (about $3 million) for failures in its anti-money-laundering controls.

According to the Dutch regulator’s official announcement published on Monday, the online bank bunq has been sanctioned for “serious deficiencies in its anti-money laundering controls during the period under review, from January 2021 to May 2022.”

In its investigation, DNB found that bunq’s customer transaction monitoring was classified as “high-risk.” The regulator determined that the neobank failed to comply with the Anti-Money Laundering and Anti-Terrorist Financing Act (Wet ter voorkoming van witwassen en terrorismefinanciering, Wwft), which sets rules for preventing money laundering and terrorist financing, and concluded the violations were severe and culpable.

“Between 2018 and 2023, DNB carried out several examinations into bunq’s compliance with the Wwft,” wrote the DNB. “During these examinations various instances of non-compliance with the Wwft were identified, that were found to be both severe and culpable.”

bunq filed an objection to the fine, which is still pending. According to Techzine, the company said it takes the integrity of the financial system very seriously. “That is why we use the most advanced technologies and continuously implement improvements,” said a spokesperson to Techzine.

This is the second dispute between bunq and the DNB. In 2018, bunq successfully challenged the regulator after it prohibited the bank’s use of AI for transaction screening; the court ultimately ruled in bunq’s favor.

The neo-banks market has been growing rapidly in the past few years, with unique approaches such as TBC Uzbekistan’s AI solutions and more digital alternatives for customers’ money management and finances. Regulators have been watching closely and sanctioning firms for lapses. A few months ago, the British company Wise was also accused of having weak anti-money laundering measures and was forced to fix them by European regulators.