Digital bank N26 realigns current accounts and introduces smart accounts


The Berlin digital bank N26 wants to significantly increase the proportion of paying customers and is therefore planning a comprehensive realignment of its current accounts for private customers. The focus of the renovation is the new N26 Smart premium account. “We want to use it to conquer the mass market in banking,” says Germany boss Georg Hauer in an interview with “Around every second German would be open to digital banking.”

With the smart account, N26 primarily wants to attract paying customers from traditional banks. The sales arguments: a lower price and comparable customer service. For a monthly fee of just under five euros, N26 offers telephone support, up to five free withdrawals per month and the use of “Shared Spaces”, a kind of joint account.

So far only 20 percent paying customers

Since the start of the market in 2015, the fintech has been looking for new customers, especially with free current accounts, and has only introduced paid options later. In Germany, only around 20 percent of active customers pay for their N26 account, says Hauer. The aim is to increase the share of premium customers to over 30 percent with a product offensive.

According to Hauer, the decisive factor for the repositioning is the corona pandemic, in the course of which the demand for paid accounts increased even more.

What the manager does not mention: The N26 offer has also lost its attractiveness in the course of the crisis. The core target group of the digital bank has always been young professionals who frequently travel abroad. The previous N26 You basic premium account is also tailored to them, including free withdrawals worldwide and a fee for extensive travel insurance.

The problem: In view of the travel warnings and exit restrictions, this is hardly a sales argument.

Free account should stay

N26 Smart is now to replace the previous entry-level account N26 You. In contrast to the other premium accounts, the newly introduced penalty interest regulation applies here. These are the other changes in the course of the realignment:

  • N26 You becomes N26 International and should be tailored even more closely to the target group of frequent fliers and globetrotters. The price remains at just under ten euros.
  • N26 Metal becomes N26 Unlimited. Customers should get even more advantages and offers from partner programs. The price remains at just under 17 euros.
  • All customers should benefit from new savings and loan products. A new call money account and a function that automatically rounds up cents and puts them back for savings are planned. Overdraft and consumer loans are also to be rolled out internationally.

The free standard account keep going. It is “an integral part of our strategy,” says Germany boss Hauer.

Free current accounts are becoming less important for banks

According to the findings of the financial experts at Stiftung Warentest, free current accounts are a thing of the past in Germany. In an evaluation of 294 account models from 125 banks in Germany, the testers found only 20 online salary accounts in August that are free of charge without any further conditions. The reason: They are usually no longer worthwhile for the banks.

“Basically, we have been seeing a trend towards more and increasingly higher fees for services for years,” said financial test expert Heike Nicodemus of the German Press Agency in August.

N26 has also moved away from the pure free account over the years and introduced a mixed portfolio. The current realignment shows that the premium accounts should become the most important sales driver. Currently, around a third of sales come from the premium segments, a third from payment transactions and a third from other businesses, such as credit and savings products. According to Germany boss Hauer, the aim is to increase the premium share to 40 to 50 percent.

A side effect of this strategy: the once young and hip digital bank is getting older. “An average N26 customer is in his early or mid-30s, but the trend is increasing, that is, the average age is approaching 40,” explains Hauer.


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