BaFin Orders Raisin Bank to Fix AML Deficiencies

Key shortcomings identified by the regulator included:

➡️ Inadequate risk analysis;

➡️ Weak customer risk assessments;

➡️ Insufficient IT monitoring; and

➡️ Gaps in the fulfilment of the money laundering officer’s responsibilities.

BaFin stated that these deficiencies significantly impair the bank’s ability to prevent money laundering and terrorist financing.

As a result, the bank was required to submit an action plan to the regulator, which it must report against on an ongoing basis.

❌ Regulatory scrutiny: Damaged trust and strained relationships with regulators;

❌ Reputational damage: Loss of confidence from clients, partners, and investors;

❌ Operational burdens: Reactive, time-pressured investment in systems, processes, and resources, often accompanied by fines;

❌ Growth constraints: Limited ability to onboard new clients or expand services while gaps remain unresolved;

❌ Restricted partnerships: Potential loss of collaboration opportunities with other FIs and firms due to heightened compliance risk concerns.

✅ With regulatory scrutiny intensifying globally, firms must act decisively to strengthen their control frameworks, maintain compliance, and mitigate risk. Waiting for regulatory intervention is a reactive approach and too little, too late.

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