Ahead of their launch in the UK, Alex Weber, Head of International Markets for N26 addressed a room full of bankers and FinTech leads at the Global Digital Banking Conference – Europe, to discuss their intentions to become the “Spotify of banking”. Focused on superior digital customer experience, and increasing trust amongst digital-only players, this new entrance in the UK is certainly set to shake things up.
Can you share a bit about N26 and where you sit in terms of digital-only vs traditional banks?
N26 is a digital-only bank, founded in 2015 and based in Berlin, Germany. We have a full European banking license and have over 1 million customers so far. At N26, we very much believe that the future bank branch is actually a smart phone as we don’t believe that customers need to go to a bank branch anymore to do their daily financial transactions. User behaviour has changed and customers these days are referencing apps such as Spotify or Airbnb in terms of the simplicity to get the things that they like so we thought why shouldn’t they be able to do this for their banking transactions.
Our vision is to build a bank that the world loves to use and a bank that is pan European and, in the future, global. Traditional banking has always been regionally fragmented so we want to overcome that and build a bank that the world loves to use and loves to talk about the digital experience – essentially, the Spotify of banking.
How do you as a newer player and a digital-only player, overcome issues of trust with your customers?
I think the brand of banks have suffered a lot over the last ten years, if you look at the average NPS in traditional banking, I believe it’s below zero. Yes, the traditional banks are trusted by consumers because they know that the governments will bail them out, however, it’s not the same trust in the way that they trust digital services.
I strongly believe that trust today for digital services is to find convenience and simplicity within offering those services. Security and stability is obviously key and based on our full European banking license and also employing smart technologies, we are able to convey credibility to customers. With that said, these aren’t the reasons that customers switch to bank with N26. The reason they switch to N26 is because they want the best digital experience that they can have and starting from the account opening, to sharing expenses, to our well-designed cards, we have the premium offerings that customers are looking for these days.
Do you see a world where we can have an end to end product application for more complex products like a mortgage, completely online? Or will that always need an element of face-to-face interaction?
I would look at that question with two different perspectives. The first one is what is really the problem that customers are having with traditional banks and I just don’t believe it is with these once in a lifetime financial decisions that they will struggle with. It’s the daily things like, how can I open or close an account, how can I share expenses and how can I make transfers. The bigger products such as mortgages, investment funds or insurance products can definitely be made more digital. We have recently launched some products beyond the customer current account such as investment portfolio options, fixed term savings products, as well as loans of up to €25,000 that are all completely seamlessly integrated into our app.
We have seen positive customer feedback so far and I strongly believe that customers aren’t focused on how they can open a mortgage on the tram but more focused on how they can share their expenses and complete everyday transactions in an absolutely seamless way.