Founded in 2013, N26 is the first 100% mobile bank to have been granted (and to operate with) a full German banking licence from Germany’s federal financial supervisory authority, the Bafin. The neobank in 2021 completed a  and counts 8m customers worldwide.

“We’ve seen this massive shift in user behaviour,” said N26 co-founder, co-CEO and COO Maximilian Tayenthal during a fireside chat with , managing partner at the VC firm Ilavska Vuillermoz Capital (which has invested in N26), at the Nexus2050 tech conference in Luxembourg on 26 June 2024. Instead of going to a physical bank branch, people start to bank on their web browser or smartphone. This transition has already happened in other industries--travel is now booked via the internet instead of in agencies, people shop and listen to music online rather than visiting stores or buying CDs--and it’s happened much more quickly than in banking.

Customers are focused on the look and feel of online mobile products. And “that is our niche,” said Tayenthal, highlighting the importance the neobank places on providing the best possible digital experience. Looking at those other industries, it wasn’t the big players that disrupted the industry, he argued. “I believe it won’t be the big banks that really change the way people around the globe do their daily financial transactions.”

Scalability is important

When you grow a company, said Tayenthal, you need to take a lot of risk. Challenges have included fundraising, convincing investors, “maintaining the agility of a startup in a highly regulated environment” and recruiting staff. As the number of customers grew, the number of team members had to grow as well. “That comes with tremendous growth pains,” he said. “It’s about getting the best talent, retaining them with the right tools in your hand, developing a vision.”

When you look at an e-commerce startup, a lot of the scaling up comes later. With a neobank like N26, on the other hand, there’s a lot of things that need to be built up at the beginning: licences, regulatory reporting, know-your-client processes and more. But once all that backbone is in place, scalability comes more easily. “Scalability is a very important piece of our concept.”

Technology for fraud prevention

Tayenthal mentioned that N26’s KYC is “mainly outsourced.” And when it comes to fraud prevention and money laundering, “I think you can do a lot with technology,” he added. The neobank has invested in the neighbourhood of €100m in compliance. Machine learning models can be used to identify groups of customers, and depending on their risk appetite, different levels of scrutiny can be applied. “KYC doesn’t end at the verification,”he said. “Assigning a risk score to the customer, like, based on the most modern technology is definitely something to be built on for maintaining the scalability.”

Need to tailor to customers

Apps and services like Spotify, Netflix or Amazon are tailored to the tastes of individual users, noted Tayenthal, but traditional banking apps still look quite uniform, no matter the customer profile.

This needs to change. If, for example, “you’re a customer that has a lot of money in your account, then we should show you investment products.” But, “if you’re more close to zero, we should show you the credit products,” he continued. “It is something very intriguing and we also have been investing.”

Targeting the next generation?

There have been rumours of N26 going public, potentially in November 2026 (there’s a fortuitous coincidence between the company’s name and the date), said Hengesch. What might the future of N26 hold?

The markets have suffered over the last year and it’s quite tight, replied Tayenthal. An “IPO is definitely an interesting option, but we have no pressure to do so. And right now, we’re just patiently waiting until the market is right for it. Having said that, private markets became incredibly liquid and incredibly deep. In the the last couple years, you see successful companies all around the world being private for much longer then you used to.”

“Good news: the company will become profitable this year, and we will be able to fund our expansion from our own profits,” he added.

When it comes to targeting the younger generation, Tayenthal concluded that it’s not necessarily about the age of the user, and added that the users of N26 upon its launch were older than expected. “We realised it’s not about the age, but it’s about the digital mindset,” he said. When you want to grow to 20 or 50m customers cross Europe, “I think you need to be the bank for everyone.”