A German digital bank that is backed by Li Ka-shing, Peter Thiel, and Tencent is set to have launched in the United Kingdom today. It aims to take on the big high street banks and add to the fierce competition among the app-only banks in Britain.
N26 already counts 1.5 million customers across 17 European nations. It has started rolling out its banking services to approximately 50,000 subscribers in the UK. It is planning a full public launch next month. Previously, it had discussed plans to launch last year.
Allianz, a giant German insurer, and the Valar Ventures of Thiel are among the investors in the fintech that is based in Berlin. It has raised $215 million (£165 million) in the capital.
The competitors in the digital-only banking services space include Revolut, Starling, Atom, Tandem, and Monzo, all of which are racing to build up the numbers of its users.
The founder and chief executive, Valentin Stalf, said that he thinks that the bank has “a fair shot to also be the number one in the UK in terms of growth.”
He added, however, that there is a large enough user base in the United Kingdom which has stuck with traditional banks for all of the digital challengers to continued their growth.
He stated: “It’s about winning customers from the four big banks.”
The bank will begin to offer overdraft facilities in the weeks following the launch, even though other credit products will still not be available for more than a year.
Stalf was not concerned by the possible effect of Brexit. He said that the temporary permissions regime that was instituted by the Bank of England and the Treasury will enable the company to continue to serve clients in the UK even in the event of a no-deal Brexit. N26 has been regulated by the European Central Bank for around two years.
Stalf stated: “It’s easier than traditional companies to deal with uncertainty.”
He added: “A start-up we have been used to uncertainty.”
He continued: “The time is really right to build a global bank that has over 50m customers.”
Stalf concluded: “Our vision is really to be a global brand.”
Approximately 6,000 new users across Europe join N26 every day. It has so far attracted €800m (£712m) in deposits in Europe, a figure which is anticipated to break the €1bn mark by the end of the year. The company expects to make an operating profit from every user by the second quarter of next year.
The name of the bank was taken from the 26 cubes that are found on the Rubik’s cube puzzle. Stalf said that it plans to enter the US in the first quarter of 2019, a delay after the initial plans to launch by the end of this year.
The rollout in the US will take place with a partner bank, instead of N26 gaining its own authorisation.
In the longer term, the bank is planning to branch out beyond the traditional current account and credit services. It will include money management tools such as price comparison for services including mobile phone contracts.
Stalf stated: “I see us also as a problem-solver in the future.”