Bafin Threatens Berlin-Based Fintech Company Solaris with Fine

The financial regulator Bafin is threatening the Berlin-based fintech company Solaris with a fine. “Several audits revealed deficiencies in money laundering prevention, reporting, outsourcing management and IT,” Bafin announced on Friday morning. Bafin has set deadlines within which Solaris must remedy the various deficiencies. If Solaris does not meet the deadlines, a fine will be due.

Solaris is one of the most valuable German fintech companies. The company enables other start-ups to use the institute’s banking license and thus do their first business. The fintech company also offers established companies banking services, such as issuing credit cards.

Bafin has been keeping an eye on Solaris for some time

In 2020, it discovered some serious deficiencies during a special audit. According to financial circles, this included combating money laundering and checking customers. Bafin then significantly increased the capital requirements for Solaris and also sent a special representative to the bank in January 2022.

At the end of 2022, Bafin then ordered Solaris to take measures to “ensure proper business organization in risk management and money laundering prevention and to limit risks,” as it was called at the time. To reduce risk, Bafin also prohibited the company from entering into new cooperation partnerships without supervisory approval.

The financial regulator now announced: “Although Bafin had already ordered Solaris to remedy these deficiencies in 2022, some of them still exist.” The current measure also concerns deficiencies that were identified during further audits in 2022 and 2023 and within the framework of the special representative’s monitoring mandate, the statement published on Friday continued. The special representative’s mandate was also extended to monitor the implementation of the measures ordered.

Solaris says it is making progress

“Solaris continues to make significant progress in working with the regulator to implement additional measures to address the identified deficiencies,” a Solaris spokesperson said. The extension of the Special Representative’s mandate is a formality and, as before, will have no impact on the day-to-day operations of Solaris or its partners.

However, Bafin’s complaints show that Solaris still has to work through numerous shortcomings. In March of this year, Bafin imposed a fine of 6.5 million euros on the Berlin fintech company. According to the fine, Solaris had “systematically submitted suspected money laundering reports late”. A Solaris spokesman said at the time that the fine related “to late-submitted suspicious activity reports from 2021”.

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(Featured image by Scott Graham via Unsplash)

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First published in Handelsblatt. A third-party contributor translated and adapted the article from tthe original. In case of discrepancy, the original will prevail.

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