SWOT Analysis - N26
Valentin Stalf and Maximilian Tayenthal established the N26 bank in 2013. Since the first product launch in 2015, the bank has been supported by investors like Peter Thiel. The company has a total funding value of around $2.7 billion, which is the bank’s greatest strength. On 19th November 2018, N26 opened its doors to the United Kingdom with over 50,000 potential customers waiting in the wings. Below, we discuss this topic in more detail.
- The N26 bank’s standout strength is its enormous backing as a startup where Its funding value stands at around $2.7 billion. World-renowned names behind that backing include Allianz X and Tencent Holdings Silicon Valley’s Peter Thiel and Chinese telecoms magnate Li Ka-shing.
- N26 was started with a singular vision “to build a bank the world loves to use.” The bank reached a staggering 1.5 million customers in a little over a year. Before it had opened in the United Kingdom, it already had over 50,000 customers waiting to sign up, proving how successful it has been in achieving that goal through marketing.
- The N26 has positioned itself in the United Kingdom market as a bank who is competing with traditional banks. Banks who have failed to meet the needs of today’s customers on the move. By framing itself as a competitor to big banks, it is playing to its strength and experience in the European market, where large well-established banks were its only competition.
- N26 also claims it is not competing with other challenger banks and by so doing has detached itself as a threat to its more abundant competitors in the United Kingdom.
- The bank recognized that the challenger bank space was competitive, and the traditional bank has a glaring weak spot. N26 has positioned itself in such a way that it accorded itself breathing room to grow. This reflects effective analytical and marketing skills.
- For the consumer, the bank’s strengths over other competitors comprise the following. There are no fees on certain packages when making foreign purchases. Withdrawals are free if in pounds and the ability to transfer money to other N26 users without knowing the bank details. N26 provides the ability to organize your money into easily managed sub-accounts with a free bank account.
- Conceivably its rapid growth is its most critical weakness. For instance, when entering the United Kingdom market, they did not realize that their previously direct approach to marketing would be unwelcome. This lack of experience in new markets was an issue that threatened to impair its growth.
- The general manager for the United Kingdom, Will Sorby, at the time of launch was unsure of the most appropriate approach when dealing with other Fintech companies in the kingdom. In Germany and other places around Europe, the worst they had to deal with was experienced established banks. This weakness highlighted the fact that it had not yet developed a corporate culture that was experienced in approaching other markets.
- With the banks massive backing, its ability to market itself extensively in the United Kingdom is huge. This can only bode well in a competitive market.
- The general manager of the N26 bank in the United Kingdom stated, its design will help the bank stand out with its focus on customers who are slightly more first-class, a little older and more mature than its competitors’ clients. This would help the growth of the bank in its new market.
- Two primary threats have been identified in the United Kingdom market. The first threat for N26 is the Fintech competitors in the United Kingdom who are more established in the marketplace. For instance, Monzo not only is at the top of the account satisfaction survey it is moreover one of Britain’s best banks. Other successful Fintech companies have failed because of this competition in the United Kingdom.
- The second biggest threat to the platform is security. In a paper by the Friedrich-Alexander University, N26 was used in a case study for Fintech startups. The study focused on the fact that FinTech relies on design and outstanding user experiences for excellent growth and does not necessarily meet security and established banking standards.
- The threat is so legitimate that N26 even offers a reward on its official website for any flaws found on its platform.
The N26 bank has only operated in the United Kingdom since November 2018. Due to its brief tenure in the United Kingdom market, no pre-compiled SWOT analysis was available based on the bank’s exposure to this market. However, through our research we wereable to compile a SWOT Analysis.