DNB fines Amsterdam’s bunq €2.6M over “serious shortcomings” in its AML controls; challenger bank appeals decision

De Nederlandsche Bank (DNB), announced that it has imposed an administrative fine of €2.6M on Amsterdam-based challenger bank bunq due to serious shortcomings in its anti-money laundering controls.

This fine is a result of an extensive investigation covering the period from January 2021 to May 2022.

Bunq’s counter to DNB

The Amsterdam challenger bank has outrightly disagreed with DNB’s decision.

bunq’s spokesperson adds, “At Bunq, we take our role as gatekeeper very seriously. We use the most advanced technology and continuously strengthen our systems – including in response to these cases from 2021–2022. We remain confident in our position.”

Consequently, bunq has appealed the fine. The appeal procedure is still ongoing. 

Money Laundering and Terrorism Financing Act: What you need to know?

The Money Laundering and Terrorism Financing (Prevention) Act (Wwft) helps protect the financial system from misuse.

Under this law, banks act as gatekeepers and must perform checks to prevent money laundering.

This means banks need to know who their clients are, where their money comes from, and how they plan to use financial products like bank accounts.

After accepting clients, banks must monitor their activities and report any unusual transactions to the Financial Intelligence Unit (FIU-NL) for further investigation.

DNB investigation findings

DNB looked into how bunq follows the Wwft (Anti-Money Laundering and Anti-Terrorist Financing Act).

They assessed how bunq identifies and manages risks related to money laundering and terrorist financing.

According to DNB, the investigation included reviewing client files, transaction monitoring alerts, and conducting interviews with bank staff.

The review found that bunq did not properly follow up on alerts from its transaction monitoring system.

As a result, signs of potential financial crime were either overlooked or not investigated at all.

Additionally, the report said that bunq could not explain why similar transactions were reported to the FIU-NL in some cases but not others.

In the four cases that led to DNB’s fine, bunq showed inadequate monitoring of its clients and their transactions. As a result, DNB believes the fine is necessary and justified.

“Didn’t make sufficient progress”

According to DNB, between 2018 and 2023, it conducted several investigations at bunq regarding its compliance with the Wwft.

During these investigations, they identified several Wwft violations, which, upon repetition, proved to be serious and culpable.

They had previously taken enforcement action, including a fine. However, this did not result in bunq’s sustainable compliance with the Wwft, claims DNB. 

Following DNB’s previous investigations, the institution had not made sufficient progress in complying with its statutory obligations under the Wwft.

DNB says it is holding bunq accountable for the current violation of Article 3, paragraph 2, subparagraph d, of the Wwft and has chosen to impose punitive sanctions for this violation. 

“Furthermore, the more serious and culpable the violation, the sooner DNB will impose a fine. This is a tailored approach. Furthermore, bunq’s size and financial capacity were taken into account. Furthermore, the fact that the bank completed a remediation program to address the identified shortcomings after DNB’s most recent investigation was considered in bunq’s favour,” concludes DNB.