With the US and UK ahead for N26: where are the specific challenges for you in the respective markets concerning regulation or consumer attitudes?
With regard to consumer attitudes, we have seen across Europe that the general need for an easy to use, mobile first bank account are homogenous among digital consumers. Hence, we see our planned expansion to the UK and US as large opportunity to serve a large pool of currently unsatisfied banking customers. As we have initially done in Europe , we will work in the US with a partner bank at our launch in order to comply with local regulation and have access to all the relevant infrastructure in the background necessary to provide a fully fledged bank account. In the UK, obviously there is still a lot of uncertainty on the outcome of the brexit negotiations. However, this has not had an impact on our decision to enter the market and we are prepared to deal with any regulatory consequences of the Brexit in order to service our UK customers.
Are you nervous? Monzo is awaiting your market entrance in the UK, Revolut has started tapping into the German market. Are there other Challenger Banks you will have to compete with in the future?
N26 is the first pan-European mobile bank, our growth across the countries in which we are operating proves that we have the right strategy and offer a great user experience. Overall, the retail banking market is so vast across Europe as there is more than one current account per person. The majority of our growth is purely organic based on recommendations from existing customers (friend referral), it shows how much our customers love using N26 and are willing to recommend it to their peers. There has been a shift across many industries from offline to online to mobile and banking is no exception. More competitors coming to the market shows that there is huge demand for mobile banking and this is to the benefit of all customers.
Will mostly millennials drive your growth throughout the next couple of years?
We announced on our 500k announcement that 40% of our customers are over 35 years old. While our product is aimed at the digital native we find that N26 is actually popular across all age groups. The ease of use and simplicity of N26 means anybody from any age group can use it.
You offer various products in cooperation with partners like Auxmoney, Clark and WeltSparen. Will this, in your opinion, be the most viable business model for banks? Collaborate or die, that’s what they say about incumbent banks. Does it apply to challengers as well?
Building the FinTech hub is a contributing factor to N26's success. From a technological aspect, in order to bring new features to our customers we partner with innovative FinTechs and traditional companies alike across our markets to bring our customers the best financial products. Collaborating with companies like N26 has, is an effective way to monetize the product. Many of our revenue streams are identical to those of traditional banks. We gain income from customers paying with N26 cards, and our customers using the products and premium account we offer.
Do you fear the tech giants Google, Facebook, Apple, Amazon and if so, in which specific areas of private banking?
There’s a difference between banking and payments. Banking still is a matter of trust for the majority of customers. While pure Tech Companies would be able to provide great infrastructure for payment services, they will not be able to provide all services required by a banking customer as it takes a banking license for many retail and private banking services. Customers also differentiate whether they only do payments convenient and easy for individual transactions or whether they would share all of their financial data with a company which is not a bank.