N26 will no longer have to restrict the number of people it onboards after Germany's regulator lifted restrictions on the digital bank.

The German neobank has been limited to onboarding up to 60,000 new customers per month, with the restriction being lifted at the beginning of June.

The move comes after the Federal Financial Supervisory Authority (BaFin) fined the neobank €4.25 million in 2021 over lax money laundering controls. The company also faced the imposition of a special monitor and constraints, including the existing limits to the number of new customers.

The bank said that over the past two years it has invested over €100 million in compliance, infrastructure, and teams to effectively combat money laundering and financial crime in a bid to prepare for onboarding higher levels of new customers.

It says it has invested in sophisticated intelligence-based models that analyse the fraud potential of individual customers before they even open an account with the company. It has also rolled out self-learning transaction monitoring systems.

“We are pleased about the trust of our regulators and will continue our close exchange in the future," said Valentin Stalf, chief executive, N26. "In recent years, we have been able to make significant progress in preventing and combating money laundering and financial crime.”

N26 will continue to liaise with the regulator after the growth restriction ends,.

Maximilian Tayenthal, co-chief executive and chief operating officer of N26, said: “Our infrastructure and our use of modern, intelligence-based technology enable us to detect and combat fraud and money laundering in real time. We want to play a pioneering role among European banks in this field over the next few years.”

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