Disrupting Banking: N26

If there’s one startup that has caught my attention the past couple of years, it’s N26. it is a German neobank, headquartered in Berlin, Germany. N26 offers its services throughout most of the Eurozone, the UK, Switzerland, and the US. It is expected to start operating in Brazil soon. This substantial growth came as a surprise for me since banking has been an industry that has the least changed over time. How could they disrupt it? How did they compete against other banks? What is their value proposition? 

N26 logo

In 2013, Maximilian Tayenthal and Valentin Stalf founded the fintech startup N26 with a great vision “Building a bank the world loves to use”. The networked target group of 18- to 40-year-olds is a tricky target but they managed to conquer the public. 

The first product N26 launched was the N26 metal card, the smallest product that a financial service provider can build: checking account with a card. They offer classic banking features such as travel insurance or free cash withdrawals worldwide. The next logical step they undertook was expanding the range of products with the N26 Metal card – the first metalcore card in Europe with which you can pay without contact.

N26 Debit card

N26 is opposed to the traditional idea of a bank. In Valentin Stalf’s words: “N26 is not just a bank, we are a commitment to digital life and transparent and simple banking. We aim to understand our customers. Someone starting a family has different needs than someone buying a house. The focus is not on the products, but on the individual experience. “. So far, it seems like this strategy has been working to fight competition.

Apart from the startup’s mission to digitalize banking, N26 differentiates itself with other banks with unique technology, their own system on which they have built their company and are fully regulated. They’ve claimed this operation model has given them speed and flexibility in the otherwise rather slow banking system. Their advantage is that they’re also cheaper than the competition because they use new technologies and operate without a branch network. This leads to a different cost structure than the one for retail banking. They’ve decided to pass on the cost advantages to our customers.

This customer-focused approach to banking genuinely showcases the power of the lean approach, compassion, and technology. N26 has spent years coming up with the right MVP and has totally won customers through understanding their unique needs. Due to their relatively small size, they’re effectively managing to incorporate technology in banking, which many large banks have failed to switch since they’re too big for an efficient transition to a customer-focused approach. N26 has a lot of potential and could, maybe one day, be the first bank you think of when you want to get a loan.

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