Insights & Opinions

The Trust Interview with Sarunas Legeckas, General Manager Greater Europe, N26

Fri, 24 Jan 2020

Rik Coeckelbergs Founder and CEO The Banking Scene

Ahead of their announcement on January 24 that N26 has 100.000 customers in Belgium, and in the Netherlands, and ahead of Sarunas’ participation in the panel at #tbsconf20lux on January 30, we talked with Sarunas on the topic of our choice this year: TRUST.

The Trust Interview Sarunas Legeckas

N26 was founded about 5 years after the financial crisis. Was this an answer of the founders towards a disillusionment of the banking industry or simply because new technologies allowed it?

Our founders were not any different from another person on this planet. They were frustrated about banking in general, with banking processes and the way they innovate. The industry is known for being slow to change. The financial crisis added up on that. It was a trigger for the founders to react in more concrete terms.

There was a lack of trust in big corporations because of the “too big to fail” attitude and the lack of ownership in the industry. Our founders wanted to take the banking sector to another level by changing the industry as a whole.

Statistics show the banks are among the least loved brands around the globe. People are less and less attached to their current bank and are more willing to switch banks. There is a statistic about millennials that 7 out of 10 rather prefer to go to the dentist than to go to their local bank.

All this together resulted in a very clear and big vision by our founders: to transform one of the oldest and richest industry in the world and to develop a bank that everyone wants to use. We wanted to make a change and to provide an answer to the lack of trust in the industry.

N26 should be a bank that is easy to use and transparent to its customers and that helps them in all their financial challenges.

Already today this results in 3,5 million users globally. In the coming years, we aim for 100 million users worldwide.

We are now 7 years and multiple million customers later. How did N26 achieve to be such a trusted brand?

Building a good product, with excellent customer experience, nice design and transparent pricing is definitely very important to achieve this.

The biggest challenge for any neobank or fintech today is trust: why should people trust their money to 7-year old organisations, rather than a 70-year old? We are proud that we achieved that.

We believe that having a banking licence was an important element in this process. We are probably the first challenger bank in the world to receive a full banking license from the European Central Bank. That brings a lot of additional requirements in terms of security, regulation, compliance, AML, just like any other bank.

We have the licence since 2016, we are regulated by the German regulator BaFin and this helps to build trust. For us, the licence is an essential element of building a bank. Because we are a licenced bank, we have more to comply with, and it sometimes slows down our growth but on the flip side, the licence is an essential element in the trust we have with our customers.

In our opinion being well regulated may have an impact on growth today, but in the long term, it will be fruitful. We are here for the long term.

In recent years, also N26 was hit with negative AML and compliance news. How did that impact your reputation in the market?

Compliance and the obligations of our banking licence have always been our priority, over growth, over higher valuations, over bigger investment tickets. It has always been our priority.

We have reviewed many steps to make sure our processes are waterproof again. We have doubled our AML team in the meantime, and it is still growing. We have a specialised financial crimes unit. We spend more energy and time on interbank relations. We share more information to avoid AML and cybersecurity crimes.

Targeted fraud management, risk scoring, liveness detection… these are just a few of the things we invested in to make sure we avoid this kind of problems in the future.

Looking at the future, what will be the next steps for N26 to remain a market maker and a trusted financial services provider?

We will continue to build this trusted financial institution. This is who we are, and it is one of our main values. This is very important in the current economic environment where it is increasingly difficult to know who can be trusted, not to forget Bigtech that may also try to enter financial services.

We’ll also invest more in product innovation. We will invest more in our products and we want to deliver them faster. For example, we recently released a shared account feature, which helps our customers to manage their rent or to save for holidays together.

The third aspect is the result of a study we recently conducted among our customers. People have a lot of financial challenges. We want to help those people to overcome that. Money Mindfulness will be a very important topic for us next year.

With all the data we have and AI technology that can interpret it, there is a big opportunity to help people how they interact with money. Like Netflix recommends what you watch based on your history, we want to translate this to the financial worlds to make our customers financially healthier.

If you like to know more, please join us next week at #TBSCONF20LUX in a great panel of executives that will share their views on trust. Sarunas will be part of the panel:

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