The online bank has so far particularly alarmed established financial institutions. With a product expansion, the start-up is primarily targeting a fintech from the Berlin neighborhood.
The smartphone bank N26 is expanding its product range: The Berlin start-up company will in future offer customers in Germany trading in stocks and ETFs (“Exchange Traded Funds”), as the fintech in Berlin announced.
This means that the neo-bank is not only competing against established financial institutions, but is also intensifying competition with the Berlin start-up Trade Republic. The N26 competitor Trade Republic started trading stocks and ETFs as a neo-broker in 2015 and recently expanded its product portfolio with a credit card and a fixed-term deposit offer.
N26 co-founder Valentin Stalf said: “We are now starting in Germany with over 200 stocks and 100 ETFs.” The offering will then be expanded to over 1,000 stocks and over 1,000 ETFs within the next few months. We are in a market in which one in six consumers already invests in stocks.
N26 took its time with the introduction
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). Initially, N26 in Austria had enabled customers to trade ETFs since January. Stalf said they took their time with the introduction to the German market. “Our aim was to ensure that this product could be used with both 500,000 euros and one euro.”
With a flat fee of 90 cents per trade, N26 undercuts its competitor Trade Republic by a few cents. “There are no further costs such as additional commissions or custody fees,” said N26. It is expected that many customers will choose a variant of the paid N26 premium accounts. “Instead of charging separate fees everywhere, we pursue the strategy of covering all financial costs with a fee of between 4.90 and 16.90 euros per month.”
Trading with Bitcoin and other cryptocurrencies is also possible
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.
Since January 2023, N26 has also enabled customers in Germany to trade Bitcoin and other cryptocurrencies. Stalf said the use of the crypto offering depends heavily on the price of Bitcoin. “If the price rises or even reaches an all-time high, then there will be more trading.”
The N26 CEO was satisfied with the current business development: “We are well on the way to the black with our business figures. We will achieve profitability on a monthly basis in the second half of the year, as announced.”
N26 is active in 24 countries in Europe and employs around 1,500 people, including around 1,000 in Berlin.
Source: Stern
