Dutch Regulator Fines Modulr €722,160 Over Weak Anti-Money Laundering Checks

The Dutch central bank has fined the Amsterdam branch of a UK-headquartered payments firm €722,160 (about £630,000) for failing to monitor its customers properly, in a case that is being watched closely across Europe's financial sector.

"De Nederlandsche Bank (DNB) imposed the penalty on Modulr Finance B.V. on 30 September and announced it in early October. The regulator found serious shortcomings in the firm's ongoing monitoring of customers, in breach of the Dutch anti-money laundering law, the Wwft."

What Went Wrong: The Pitfalls of Outsourced Compliance

The breaches ran from 1 January 2023 until 16 July 2024, following an investigation opened by DNB in April 2024. At the heart of the case is outsourcing: Modulr relied heavily on intermediary partners, including crypto-asset service providers and referral networks, to carry out first-line customer checks and day-to-day monitoring. According to the regulator's findings, this reliance left the firm without an independent picture of who its customers were and what they were doing.

• Inherited Risk Profiles: Modulr assigned clients the same risk and transaction profiles as the partners who referred them, rather than assessing their actual transactional conduct.
• Gaps in High-Risk Coverage: Monitoring was deficient in critical risk areas, including non-resident customers, high-risk countries, and unusual cross-border transaction patterns.
• Undetected Structuring: Multiple transactions falling below individual reporting thresholds went unnoticed, hiding the broader patterns they formed together.
• Delayed or Missed Filings: Indications of potential money laundering and fraud were escalated late or missed altogether.
• Settlement Reduction: The basic fine was €849,600, reduced by 15% under a simplified settlement after Modulr waived its right to object.

Where SecuroQ Comes In: Solving Partner Blind Spots

The failings identified by DNB are precisely the structural gaps modern RegTech platforms are engineered to solve. SecuroQ is preparing sandbox demonstrations built around real-world typologies—starting with Scenario 01, which covers high-value transactions and rapid movement of funds: the exact activity that slips through when monitoring depends on isolated alerts rather than pattern analysis.

"Each of these gaps is a control that can be designed, tested and evidenced. When monitoring depends on static partner ratings, firms operate blind. Direct data ingestion and behavioural pattern analysis eliminate that vulnerability. — Padma Priya B, AML Specialist at SecuroQ (over a decade of experience in bank compliance and AML systems)."

Five Concrete Remedies to Close Monitoring Gaps

• Restoring an Independent View: Where a firm relies on intermediaries for first-line checks, it must operate its own direct monitoring layer that ingests raw telemetry to evaluate risk independently.
• Dynamic Behaviour-Based Profiling: Replacing inherited partner risk ratings with dynamic profiles calculated from the customer's actual transactional conduct, updating automatically as behaviour evolves.
• Catching Threshold Avoidance & Velocity: Aggregating transactions across accounts and time windows to reveal structuring patterns where payments are kept just below reporting limits (the core logic behind SecuroQ Scenario 01).
• Dedicated Coverage for Higher-Risk Segments: Implementing targeted scenarios for high-risk jurisdictions, non-resident customers, and unusual cross-border velocity.
• Accelerated, Audit-Ready Reporting: Case management that logs why an alert was raised, who reviewed it, and what was decided, shortening the gap to SAR submission and establishing a clear audit trail for regulators.

Experts caution that software alone does not make a firm compliant. DNB's findings were as much about governance as tooling: who owns the risk, how outsourced work is overseen, and whether senior management challenges partner deliverables. Technology supplies the visibility, but institutions must still staff, tune, and act on those intelligence signals.

"Official Sources: De Nederlandsche Bank (DNB) Enforcement Notices; Dutch Wwft; SecuroQ Intelligence (securoq.com)."