The German smartphone bank N26 hopes to become profitable soon. In the second half of 2024, at least in a few months, making money will be the main thing, the two Austrian N26 founders Valentin Stalf and Maximilian Tayenthal announced in Berlin. In 2022 the numbers were still deep red.
The annual deficit for 2022 increased by almost 24 percent to 213.4 million euros compared to 2021. However, Berliner Bank expects a significantly lower loss for the current year. The annual deficit is expected to fall to around 100 million euros in 2023. Gross turnover increased by almost 24 percent to 236 million euros in 2022. For the current year, N26 expects a turnover of around 300 million euros (plus 30 percent).
The high loss in 2022 is partly due to high investments in countermeasures against fraud and money laundering. These measures were required in 2021 by the banking supervisor Bafin. At the same time, Bafin had decreed that N26 could only accept a maximum of 50,000 new customers per month. This limit will now be increased to 60,000 new customers per month on December 1.
AI against financial crime
Tayenthal said that by 2022 they would have invested more than 80 million euros in personnel and technical infrastructure to combat financial crime. With the help of artificial intelligence applications, N26 can now recognize with a high hit rate when opening an account whether there has been an attempted fraud or not. More than 300 data points would be evaluated in real time.
The security measures taken made it possible to reduce by 95 percent the number of cases of suspected fraud registered by law enforcement authorities in the period from January 2022 to September 2023. Against this background, N26 founders Stalf and Tayenthal hope that Bafin will further relax or completely lift growth restrictions.
ETF trading scheduled in the app
N26’s activities will not only be stimulated by additional new customers in the coming year. In the first quarter of 2024, N26 will also make it possible to trade ETFs (“Exchange Traded Funds”) directly in the app. Later it will also be possible to buy and sell individual shares in the app. N26 collaborates with the start-up Upvest. The Berlin-based financial services provider, which offers the brokerage and custody of investment products via a program interface, is also used by N26 competitors such as Revolut and Vivid.
N26 operates in 24 countries in Europe, including Austria, and employs approximately 1,500 people, including approximately 1,000 in Berlin. The company was founded in 2015.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
