Administrative fine imposed on Modulr Finance B.V. for inadequate customer due diligence

The Dutch central bank's €722,160 fine against Modulr Finance B.V. underscores that payment and fintech firms remain under intense AML supervisory scrutiny. The penalty relates to serious customer due diligence shortcomings between January 2023 and July 2024, signalling that DNB expects robust, risk-based CDD across onboarding, periodic review and ongoing monitoring. For compliance teams, the message is clear: inadequate AML controls can lead to material fines, reputational damage and enhanced supervisory attention.

Firms should review their CDD frameworks, including customer risk assessments, UBO identification, PEP and sanctions screening, transaction monitoring and record-keeping. Governance and training also matter, as supervisors assess whether boards understand and own AML risk. A gap analysis against Wwft requirements and DNB expectations is advisable, followed by remediation and independent testing.

Payment institutions serving higher-risk sectors should pay particular attention to source of funds, source of wealth and beneficial ownership verification. While the fine is firm-specific, it reinforces expectations across banking, payments and fintech. The opportunity lies in using RegTech automation to make CDD more efficient and auditable, turning compliance into a competitive advantage when winning bank partners and enterprise clients.