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N26 addresses neobank’s culture struggles

Sifted | Amy O'Brien | Jun 13, 2022

N26 founders - N26 addresses neobank’s culture strugglesDespite compliance headaches and struggles with retention, the CEO of one of Europe’s largest neobanks says it’s still hiring amid the tech downturn, with plans to foray into crypto within weeks.

“I think we now have quite a strong C-level team, but getting there obviously means you have people churning on the way,” N26’s CEO and cofounder Valentin Stalf told Sifted, in response to a question about the digital bank’s higher than average employee churn.  N26 has 7m customers and a $9bn valuation — a larger market cap than Germany’s second-biggest listed bank, Commerzbank.  But in the past couple of years, the once high-flying digital bank has pulled out of the US and UK, and come under fire from regulators over its struggles with anti-money laundering rules.

The Road Ahead

Hiring but holding off global expansion:   Stalf said the company plans to increase staff to around 1,700 by the end of this year, from 1,500 now. It’s a hiring plan that sets it apart from many fintechs that are getting leaner right now — and he was upfront about N26’s plans to poach people that are laid off elsewhere.  Rather than focusing on boots on the ground in further geographies, however, these hires will be concentrated across N26’s existing eight offices before a second attempt at global expansion once the bank has “reached 15-20% market share in Europe”, up from single digits at the moment.

See:  N26 Co-founder Maximilian Tayenthal talks growing one of the fastest-growing mobile banks in the world

Crypto products: The product that N26 thinks its customers want and it hasn’t given them yet? Investments and savings. Currently N26 can put their money in different savings pots but they’re not paid interest, and the fintech offers them no way to invest in equities or crypto.

Filling the void:  N26 has seen a slew of high-profile departures in the last two years, including one which left the digital bank with no full-time women at the C-suite level, and it ranks among the worst neobanks in Europe for women in management positions.  Stalf acknowledged that the bank “can still do better” and “need[s] to work on bringing in more female leaders”.

Compliance:  The neobank has also ramped up compliance efforts after facing a fine in Germany and even a new client ban in Italy from regulators over “shortcomings” in its anti-money laundering (AML) systems.  “We had a banking licence for five years before having any discussion with the regulator,” he said. “And then from my perspective, a couple of crises happened with Wirecard and Greensill and suddenly the regulator paid more attention to new business models.”

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NCFA Jan 2018 resize - N26 addresses neobank’s culture strugglesThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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