German digital bank launches in the UK
Written by Hannah McGrath
N26, a German digital bank which has 1.5 million customers across Europe, is launching its current account to UK customers today.
The app-based bank, which was launched in Berlin in 2015, is backed by Tencent, the Chinese internet giant, Paypal co- founder Peter Thiel, and Hong Kong business magnate Li Ka-shing. It has raised £165 million in funding so far.
The bank claims to have 50,000 UK subscribers on its waiting list ahead of a full public launch, expected next month.
It will go up against challenger banks including Monzo, Starling and Revolut, which are leading the field as incumbent banks including RBS and Goldman Sachs rush to develop their own standalone digital banking operations.
N26’s current account and card services will initially be available to friends and family of N26 during the beat phase of the rollout, the bank said.
It is expected to operate with a European banking licence initially, but may consider whether conditions are right to apply for a UK licence further on down the line. The bank also announced plans to expand its operations to the US in the first quarter of next year.
European customers are currently able to access a free app-based version of N26 offering free cash withdrawals in Euros and free payments in any currency on its card, as well as a paid-for service costing €7.90 per month, which also gives customers free cash withdrawals worldwide and insurance from Allianz.
Valentin Stalf, chief executive and co-founder, said: “The UK is one of the most digitally advanced countries in the world. Backed by our state-of-the-art technology stack and an intuitive, user-centric design, today’s launch is the first step towards delivering the best digital banking experience possible for UK customers.”
Jo Howes, commerical director at Crealogix, a Swiss FinTech provider said that N26's entry into the UK market was yet further evidence of the changing face of the country's banking sector as digital challenger banks such as Monzo and Starling along with savings or financial management apps such as Coconut and Tandem continue to disrupt the market.
"These younger and leaner legacy free banks have continued to erode the dominance of the traditional established banks. N26 alone already has more than 1.5 million customers across eighteen European markets, demonstrating why these new competitors cannot be ignored by incumbents or their customers," she said.