N26 is a digital bank, headquartered in Berlin, Germany, that offers its services throughout most of the Eurozone and is expanding to the US and UK in 2018. The company was founded by Maximilian Tayenthal and Valentin Stalf in 2013. Last month, N26 announced that it had reached 1 million users and that it generates €1 billion in transaction volume every month ($1.17 billion).
In order to learn more about this top European Fintech player, we reached out to Mr. William Kunter (Director of Finance at N26) and Mr. Jeremie Rosselli (General Manager France and Head of Social Media at N26.
To start off, perhaps both of you could provide us with an overview of the work you currently do at N26?
William: Yeah sure, so I’ll start. I am a Director of Finance at N26. I joined the company in September 2016. I was first in charge of Business Development and the Operations team. Roughly a year ago, I started in my current team. In my current role, I focus mainly on two areas.
The first one is Funding and Investor Relations. This involves working with investors, making sure they have all the information they need to make their decision with regards to N26. The other part of my work revolves around budgeting and controlling, modeling the financial performance of the company and making sure that we optimize the use of our funds and remain conscious of our costs.
In terms of my background, I graduated from HEC in 2011. I started my work at Goldman Sachs in London, where I worked in various teams ranging from Capital Markets to M&A but always covering Financial Institutions.
Jeremie: I’m the country manager for N26’s operations in France. I’m responsible for all our operations related to France i.e. Marketing, Customer Service, Strategy and Product. I’m also the head of Social Media for all the markets. I’ve worked in Senior Business Development and Marketing roles at Burger King in France, Israel, Germany and the US. Also, I’ve done IB at HSBC and Hawkpoint Partners. Lastly, I did my MBA from The University of Chicago – Booth School of Business.
We prepared some questions which we believe are salient with regards to N26.
We know that N26 is planning to enter the UK market. Perhaps you could talk a bit about the specific challenges/opportunities that you believe N26 is may face with regards to this expansion (such as customer stickiness etc.)?
Our read of the UK market is that it’s more of an opportunity. We observed that the customer stickiness in the urban population is not very strong. When you look at the UK market, a lot of people are willing to move to digital banking. Urban areas such as London are key hubs of innovation and are more agile in switching current accounts. Also, when you look at our product offering, the user experience and innovation we put in N26, we think it will make a big difference in the UK. The UK market is not a “winner takes all” market; there is definitely enough space for several players to be successful.
We’ve seen some “Challenger Banks” who are also competitors of N26 like Revolut in the UK that have launched additional services such as the ability to invest in Crypto (Robinhood Model – Fintech company in the US). With N26, is there any plan to replicate these additional services?
We are always evaluating a wide range of possible product offerings. Regarding Revolut and Crypto, it’s something that is unregulated and in the end, a very small percentage of the user base will actually use it.
Our goal is really to focus on building a product that can be used by and caters to multiple users and not just a small portion of the market. Yes, on Crypto, we’ve seen a lot going on, you mentioned Robinhood, they also added Crypto to their portfolio. There’s definitely a hype around Crypto. But you know as a financial regulated institution, we need to be very mindful in terms of what we’re offering to our users, which is not the case with some of our competitors who are doing Crypto. We are assessing the situation. At this stage there is no concrete plan on doing that in the future.
Now let’s come to the French market. We know that in the UK, the banking market is very concentrated and the regulators introduced the CASS (Current Account Switching Service), where they encourage individuals to shift their current accounts to reduce the high market share of the big banks. Is there something like this in France as well where the regulatory bodies are helping people to shift current accounts?
So actually this is a European regulation. It’s interesting that every market tries to say that this is a local regulation but like in France it’s called “loi Macron”, in Germany it’s called “ZKG” (Zahlungskontengesetz). However, as the switching numbers in France are pretty low, it will still take some time but I think what you can see and what you should see is that now people are starting to have more than one bank account and we have observed that when people first start to test N26 they end-up using it for their everyday life (as opposed to their other current account) and that is what matter to us. Our key focus is how we can become the everyday account for our customers.
Just another point on market entry, we saw that with regards to the US, N26 decided not to get a banking license and instead took the partnership route to enter the market. Could you perhaps explain the rationale for something like this? How do you decide?
Even when we first launched in Europe, we worked with a partner bank. We do that to rapidly launch our product and check if there’s enough appetite in the market and if we get significant traction. Also, it helps to be quicker in terms of time to market. It’s really a tradeoff between flexibility and time to market. And when you think about the US setup, it’s very similar to Europe when we first launched. It’s the same rationale. In the medium to long term, if the US market is very successful and we get a lot of traction, we will definitely think of applying for a US license.
I’m going to touch a bit on advice for students. Would you happen to have any insights for students who want to join the Fintech industry, a “Challenger Bank”, maybe do an internship. A lot of students at top schools such as HEC think about doing Consulting/IB and then moving to an exciting Fintech start-up.
First of all, we are always looking for interns at N26. Especially from strong business schools like HEC. The fact that you are in this school is a great thing. In terms of career path and how to best get into a Fintech: Going to IB first makes sense but it is not really a pre-requisite. We have interns who did not follow this path.
What we are looking for are people who are passionate about this space, are really aware of what is going on in the industry, what competitors are doing, what we are doing and they really believe in our product. We are also looking for people who are hands on and are really able to work independently. At the end of the day, we are a “start-up” so it’s a very flexible environment. So, you need to be able to adapt to changing situations. Basically, we like people who perhaps have some entrepreneurial experience or at least an entrepreneurial mindset. Also, I think if you’re at HEC, you’ve been through your courses, maybe done an internship in banking/marketing; you’re definitely in a good position to join fintech.
When people talk about “challenger banks”, sure, we are a financial institution, we have a banking license but we think of ourselves first and foremost as a tech company. We are not only looking for people with a banking background, but we are also seeking people who are tech savvy.
Perfect! In the end, if there’s anything I’ve failed to mention and that you would like to say, feel free to do so.
Jeremie: Yeah, you should put a link of our website for anyone who wants to open an account at N26! As a Country Manager I’m driving my KPIs and this is a good opportunity 😉. Also, we are always keen on taking in passionate and dynamic people and will be open to students from top schools such as HEC.
About the Author
Ali Haider Minhas is a Grande Ecole student at HEC Paris, majoring in International Finance. He has completed internships in Investment Banking (Paris) and Private Equity (Luxembourg). His interests include “Challenger Banks”, Crypto Infrastructure and Tech-focused Growth Equity.