N26 is a bank - not a road in Mayo - and it has 100k Irish customers

We can exclusively reveal that N26 is not named after the main road between Foxford and Castlebar in Mayo. It is  one of a new breed of banking digital distrupters that aim to take on our traditional banks by cutting charges, especially for transferring money abroad. But do not expect branches, interest or chequebooks.   Sarunas Legeckas, head of N26’s Ireland operation, tells us all about their pros and cons – a recent N26 survey of Irish financial habits that revealed most prefer financial stability over an active sex life, and also just why the bank is called N26.

So 27% of Irish people lie to their partners about money. And of those people, 62% fight about it too (although the national average for arguing about money is only 25%). Were you surprised by the results?

Yes, but I also think it's a universal fact that money and spending can cause friction in households. Whether that’s people not wanting to disclose their habits for fear of arguments, or a feeling of power dynamics between couples based on who earns more.

Well maybe if the ones who lie to their partners started telling the truth, they might fight less.. Another finding was that prize financial stability more than their sex life (81% females vs 71% males)

!? You must have been surprised by that!

Given the present economic climate, I think many people are probably craving financial stability above all things! A huge focus for us, specifically this year is supporting financial wellness, so letting people know that with digital tools they can take back control, but also we're trying to break many of the taboos around money. We feel this is an area where digital banking can shed a lot of light, our tools are set up to take the smoke and mirrors out of financial jargon and make it simple. We also recently launched the Big Banking Chat, the largest ever consumer conversation about traditional banking to help provide answers around banking, which people don’t often get straight answers on.

Digital banks are making great inroads. How many customers do you have? How many do you expect to get? Worldwide, we serve more than five million customers. Over 100,000 are Irish. We launched here in late 2016 so, we're relatively (new) in the Irish market but Ireland is of key long term strategic importance to us. Its needs for transparent banking mirror the very reasons why our bank was founded. Ireland has had such a tumultuous past with brick and mortar banks.

How many people will have digital accounts here in five years? We’ve seen double-digit growth this year, driven in part by Covid-19 and the abandonment of cash by many consumers. In five years there’ll be as many digital bank accounts as traditional bank accounts and we've set a target of serving one-third of those.

So how do you make money?! N26’s primary revenue streams include interchange fees paid by merchants and subscriptions for our premium products. Our premium subscription products for personal and business banking have additional perks like travel insurance, fee-free ATM withdrawals and foreign currency payments. We also offer premium business accounts and recently launched N26 Business Metal for small business owners which includes 0.1% cashback for all purchases and costs €16.90 per month. We use the example of Spotify to explain our pricing model. If you want to listen to music, you can for free, but if you want a more unlimited experience, we have other products that will suit your needs.

What about the cons….no interest?, no branches? €2 ATM charges if you go above 3 transactions a month? It’s not all gravy? Traditional banking needs to be modernised.  Our goal is to build new standards in banking but to do that we must start with fixing the basics. We may not have been around for 200 years like the big banks, but since launching in 2015 we've taken the burdensome infrastructures of banking and made banking a less costly, more enjoyable experience.

Are digital banks like N26 ‘not for everyone’ as recent reports suggest?…If so who are they for? To play devil’s advocate, are they a bit of a fad for Millennials? Actually, our youngest customer is 18, our eldest, 90. We also offer business banking accounts to help Irish entrepreneurs to thrive on the move. Our maxim is ‘make banking simple’, our app can be used by anyone, but also everything you can access on the app, can also be accessed from a desktop.

What’s the difference between N26 and other digital banks? Unlike other fintechs available in Ireland, N26 is a licensed bank and in possession of a full banking license granted by the European Central Bank since 2015. We are regulated under the supervision of German regulator, BaFin. The big benefit that readers should take from this is that with us your savings are covered by law. The deposit guarantee scheme we operate under ensures protection of up to €100,000 per person and individual savings accounts.

Does it make financial sense to have a digital bank account and a traditional one? Is that what a lot of your customers are doing? I definitely think it makes sense for customers to avail of whatever mix of solutions suits them best. For example, we don’t yet offer mortgages and so for that it would make sense for customers to work with a traditional bank. What we do offer however is a way to completely simplify everyday personal banking.

So why is the bank called N26 - shortened from the original name Number26? (It’s) the number of smaller cubes in a complete Rubik’s Cube. The point? The cube is complex, but if you know the correct sequence of moves, you can solve it quickly and elegantly. We try to apply the same approach to banking, which has historically been a complex and sometimes frustrating consumer experience short on innovation. With the right approach and combination of moves, we hope to make banking fundamentally better - just like the solution to a Rubik’s cube!