Over the past couple of years, the financial industry has been taken aback by the success of so-called ‘challenger banks’. Several new start-ups have set about revolutionising the banking industry, using the negative sentiment in the wake of the financial crisis to providing consumers with quicker, easier and more trustworthy options for their savings.
As finance and technology grow ever more dependent on each other, it’s clear the future of banking lies in fintech – or so Valentin Stalf, CEO of online bank N26, believes.
Speaking at the Blast tech conference in Rome, Stalf highlighted the key problem that traditional banks are facing in just one statistic: 7 out of 10 millennials would rather visit the dentist than their bank.
An outdated customer experience and a reluctance to move online has made it difficult for traditional banks to keep up in the fintech era. Transforming from conventional to digital companies is a tough move to make – so what is the solution?
According to Stalf, it’s his bank, N26. One of several new app-based banks – the biggest and best known being Monzo – N26’s biggest selling point is its transparency and ease of use in the digital age. N26 offers paperless account opening in just eight minutes, with a card being sent through within two days. N26’s app also gives real-time push notifications on balance and transactions, smart banking spending statistics allowing users to analyse their spending habits and control the account’s use abroad.
Statistics suggest that N26’s unique method works. Since it was founded two years ago, N26 have gained 300,000 customers, largely in their home markets in Germany and Austria. One year ago it gained its banking license from the German authorities, officially turning it into a fully-fledged bank. Thanks to European passporting rights, the bank has now expanded to operate in 17 countries across Europe.
N26’s unique approach also expands beyond the traditional bank accounts. Its goal is to build a fintech hub, and the bank has joined forces with fintech companies that offer the best of each area. For example, for international transfers N26 collaborates with Transferwise, and for its insurance products with Allianz.
The downside to this magical bank? It’s not yet available in the UK. However, Stalf has plans to launch at the start of next year – despite uncertainty over the impact of Brexit.
“Brexit is obviously not a good thing for either side, but it will not affect our plans to launch in the UK at the start of next year,” Stalf said.
“It is unlikely that there will be a sharp cut off point for foreign banks operating in the UK, so there is the opportunity to try it out and then apply for another license if need be”.