The Berlin fintech company, which so far only offers banking via smartphone, wants to win new customers. N26 also wants to catch up with the “neobrokers” by trading stocks and index funds.
The smartphone bank N26 is increasing competition in the stock and fund trading business with its new product range. Launched purely as a bank for smartphones, customers should now also be able to conduct their investment transactions via cell phone.
Price competition tightened
This means that N26 is also involved in the increasingly tough competition for customers who want to trade stocks or index funds (ETF) quickly and cheaply. Discount brokers such as the Commerzbank subsidiary Comdirect or Consorsbank have been in a price war with the so-called neobrokers for several years. The newbies in the business such as Trade Republic, Scalable Capital or Smartbroker offer the purchase and sale of stocks or fund shares almost for free.
Some of the neobrokers such as Trade Republic now also offer daily and fixed-term deposit accounts or even credit cards and are thus moving towards N26’s core business. With their new initiative, the Berliners are launching a counter-offensive, so to speak.
Offer should become larger
According to N26 co-founder Valentin Stalf, N26 initially wants to start with 200 tradable stocks and ETFs in Germany. Within the next few months, the offering will be expanded to include around 1,000 stocks and more than 1,000 ETFs. Stock and ETF trading is technically implemented through a partnership with the company Upvest. The Berlin-based fintech offers banks the brokerage and custody of investment products via a program interface (API).
In Austria, N26 had already started ETF trading in January. Customers in Germany have been able to trade cryptocurrencies such as Bitcoin since January 2023. The company is active in 24 countries in Europe and employs around 1,500 people, including around 1,000 in Berlin. In December, N26 had around four million active customers, around 75 percent of which come from Germany and France.
Also fighting for daily and fixed-term deposit customers
In the price war for stock and ETF trading, the company should be able to keep up with the low-cost competition in the market with a flat fee of 0.90 euros per trade. N26 currently offers four different account types. In addition to a free basic account, there are current accounts with monthly fees between 4.90 and 16.90 euros.
The Berliners also want to stand up to the competition more strongly with their interest rate offers. Depending on the account model, N26 offers up to four percent interest on fixed-term deposits, putting it on a par with the offer of its competitor Trade Republic. The increase in interest rates for current account accounts will come into effect from April 9th.
N26 remains in the sights of the banking regulator
In 2021, the banking regulator BaFin deliberately slowed down the growth of N26. The banking regulator set a limit for the online bank’s further customer growth and accused it of poor risk management. The bank is allowed to take on a maximum of 50,000 new customers per month in Europe. According to the supervisory authority, the requirements are intended to “eliminate deficiencies, particularly in risk management”. The requirements were extended last year.