The German Federal Financial Supervisory Authority (BaFin) has announced tightening its regulation of Solaris , the Germany-based technical service provider and executing bank for numerous digital banks and fintech. As reported by Handelsblatt, BaFin has recently had to approve every new Solaris customer (customers being institutions not end customers).

According to a  Solaris representative, the institute is currently subject to authorisation with regard to new partnerships and will continue to do so until further notice. This means that the technical service provider will have to get the green light from BaFin before they can take on new customers, however, existing partnerships are not affected by the Bafin requirement. The Solaris representative explained that this development is in line with Solaris' strategy of making its own platform as reliable and secure as possible.

BaFin’s decision As stated in Handelsblatt, the financial regulator is concerned with Solaris proving that its business model is coherent and the processes are acceptable within the framework of common risks. The step, which has not yet been explained in more detail or communicated by BaFin, does not necessarily represent a restriction in growth for the company. Solaris can continue to enter into new cooperations, only with the condition that BaFin has to check it.

In January 2022, Bafin sent a special auditor from PWC to Solaris because of a banking supervisory audit from 2020. According to Handelsblatt, compliance deficiencies had been identified in this audit. In March of the same year, BaFin announced that the fintech had violated the requirements for proper business organisation.

This resulted in BaFin imposing further regulations on Solaris. Recent partnership with Huobi Global In January 2023, Huobi Global partnered with Solaris to launch a crypto debit card for European customers. The crypto-to-fiat debit card was designed to allow Huobi users to spend digital assets at points-of-sale all over the world.

The product was created in partnership with Visa and will be available to both new and existing users residing in the European Economic Area (EEA) starting in the second half of 2023. Solaris’ offers  Solaris is a technology company with full banking, e-money and brokerage licenses which enable it to operate on a pan-European level in all financial areas. With their APIs, users can embed its fully digital banking services directly into their product.

The company uses data mesh architecture to leverage data for decision making, planning, forecasting, and regulatory compliance. .