Challenger bank N26 has made a name for itself in Europe. Beginning in Germany, the company has expanded throughout the continent. In June 2018, the company announced it had hit the 1 million customer mark. Just 5 months later, the company announced it had surpassed 2 million customers. It feels like N26 is just getting started. And now, the company is headed to the U.S.
Today’s guest on the podcast is Nicolas Kopp, N26’s US CEO. Nic began his stint at N26 helping to expand in Europe. He hopes that the company’s well-designed app and experience will light up US clients, as well. Nic and I discuss the firm’s expansion strategy and his goals in the U.S., as well as the challenges in scaling.
The following excerpts were edited for clarity.
Why expand to the U.S.?
At N26, we have a well-designed app and customers love us in Europe. We have a global ambition. If you want to scale globally as a European company, the U.S. market is a very important market to be in. It’s a very large market and people interacting with their retail finances on a frequent, regular basis. Frankly, I think our product will give added value to U.S. customers.
How do you differentiate N26 in the U.S.?
We’re unique in various aspects. First, it feels amazing to use our product. Sign up is very quick and all your transaction history is real-time. The whole app experience is really native. It feels like using any other best in class consumer app, like Netflix.
We also are largely free as a product. We operate a freemium model at N26. Our basic account is free for our customers, but we have a few premium accounts where we upsell some services. In this day and age, there shouldn’t be expensive fees on basic banking services.
Lastly, it’s this concept that we’re rebundling financial services. It’s not a new concept but perhaps for the first time in history, we’re smartly able to rebundle financial services into one platform. That means we can offer overdraft, loans, peer to peer payments, foreign currency — we can offer this out of one app.
Who’s the typical N26 customer?
We have a fairly diverse customer base. People expect us to be driven by early adopters or students or millennials. It’s really not the case. When we look at our cohorts and at our customer base, roughly half of our customers are older than 32 or 33 years old. They’re really diverse in the demographics and interests.
How do you keep pace with your growth?
You have to move fast. We’ve been blessed with our growth. We needed to enormously scale the processes that happened along the way to 1.5 million customers. We hired a lot. So, a lot of our growth and ability to service our growing customer base was about hiring the right people on to our team. We’re roughly 500 people across three offices: Berlin (HQ), Barcelona (product and engineering hub) and New York City.
What’s the culture like and does it scale across countries?
Our New York office is the furthest away from headquarters and it’s important for me — having worked very closely with the founders for a few years — to bring that culture over to the U.S. We send people from our headquarters to our Barcelona office, too.
What connects all of us is this relentless product focus at N26. A lot of people who join us are already users of our product. Everyone who joins from day 1 gets exposed and immersed in to this culture of rigorous user focus. We always think about what’s best for the user, why, and how we can make it best for the user. Everyone we hire already has this DNA and that’s what makes us successful as a company.
What was it like to move in your career from traditional financial services to fintech?
It’s been fun. There was a transition from a lot of structure and well-defined processes and blueprints to basically very little. You join a startup, jump right in and need to make stuff happen immediately without much guidance. It took some adjustment to our fast-paced, creative environment at N26. Every action you take contributes to our goals. It’s fulfilling to see the impact we have on consumers. That drives me.