- March 24, 2018
- Bob Quinn
Since the crash, significant bank charges have become part of our lives.
While they might make us wince when we open our quarterly fee statements, for the most part, we accept them. There are ways to minimise them, like lodging a certain amount of money per month or maintaining a certain level in your account at all times, but these dodges are not necessarily practical. They certainly don’t make our lives any easier.
I want to tell you about a couple of guys who are doing something very new with banking, and you don’t have to pay through the nose for it. Have you heard of N26?
No, it’s not a potholed national road somewhere in east Galway; it’s a bank, or neobank to be exact.
Neobanks are app-only banks or quasi-banks tailored for the smartphone generation.
Maximilian Tayenthal (30) and Valentin Stalf (35) are the people behind it.
Their aim is to provide a fully mobile banking service that does everything their customers need to do whilst – this is important to the founders – disrupting traditional banking.
Their standard current account is free, provided you make fewer than five ATM withdrawals per month, otherwise it’s €2 per withdrawal.
There is also N26 Black, an account designed for the international traveller. It is highly competitive for currency exchange and offers fee-free withdrawals wherever you are travelling. You can access competitive travel insurance too. This account is €5.90 per month. If you travel a lot, or if you have a child who is heading off on an extended period of travel, this account is worth looking into.
N26’s business model involves offering services through partnerships with other fintech disruptors. For example, N26 will hopefully be able to offer you, a customer in Ireland, access to investment and deposit products from other European countries through a partnership with Raisin.
Tayenthal says: “Right now if you want to do a cross-border currency transfer, you can do this with TransferWise over N26. For investment, we’re partnering with Raisin. For insurance, we’re partnering with Clark. For us, we really want to disrupt banking by launching products that cover every aspect of financial services.”
Banking meets instant messaging
One of the handiest features of N26 is that customers can transfer money to other customers with the tap of a button on a smartphone. One of N26’s investors is Tencent, the company behind Wechat (China’s version of whatsapp), which allows money transfers between one Wechat contact and another. With N26, I can search through my contacts to see if a particular person is also an N26 customer and if they are, I can transfer them the money I owe them for the concert ticket, or my share of the dinner he just paid for.
The bank is based in Berlin, so how do you open an account? By video chat, of course. I arranged a suitable time for someone from N26 to video call me. He took photos of my passport during the call. In eight minutes I had opened an account.
You know me
It will come as no surprise that I am in favour of people who like disrupting the status quo. However, there are other reasons for liking N26. A few weeks ago, I wrote about bank failure. We shouldn’t have all our eggs in one basket.
However, I also don’t like the idea of any one banking institution having the full picture of my financial life.
How comfortable are you with the idea of people whom you may know knowing your spending habits, loan applications, investment or pension details? In a local branch it is possible that the person analysing your account knows you personally.
N26’s young founders have attracted some five-star investors including Allianz and Tencent as I mentioned. Tencent, which is one of the five most valuable companies in the world, is a pioneer in mobile payment so N26 can only benefit from Tencent’s acumen. N26 has attracted 850,000 customers across 17 countries in the Eurozone – and that’s just since their launch in 2015.
Tayenthal and Stalf are as far from the teenage nerds in a bedroom as they are from the conformist dinosaurs who are running our traditional banks.
Banking is being done better elsewhere. Are you ready to be part of the future of banking or are going to continue to support the way it is now?