Challenger banks getting those ‘digital natives’ on board

At the end of 2016 the Berlin-based fintech start-up N26 became the first pan-European smartphone-bank. The direct bank is now offering a range of online banking and financial services to customers in 17 countries and tackles the European market with a refreshing approach. Promises like ‘You’ll never have to visit a bank again’ show that they listen carefully to today’s modern banking customer; those for whom bank branches aren’t a favourite place and who don’t love wading through tonnes of paperwork.

What we DO love, however, is quick, flexible and functional free services – a fact recognised by N26 right from their inception in 2013. Since then the number of customers rose quickly to 200,000 (July 2016) indicating that the days when customers just take what they are given and learn to live with it, are well and truly over. N26 really seems to know how to get those digital natives on board, don’t they?

1. The most painless 8 minutes you’ve ever spent dealing with a bank

Thinking back to 2004, the bank appointment with my personal advisor was made 2 weeks in advance. Two bus rides, 10 decisions, 3 handshakes and 5 signatures later, I was the happy – if slightly frazzled – holder of a bank account.

Many years have passed and now we know: banks can do better. How much better? Well, quite a bit. It’s N26’s ‘account in 8 minutes’ offer which almost sounds like a battle cry, taking the challenge right to the core of traditional banking. Make yourself comfortable, grab your passport and start a video-chat. What a ‘fall-in-love service’.

2. The easier the better

A ‘premium universal contestable advanced card member agreement’? Thanks, but no thanks. Nowadays it’s not the overwhelming number of adjusted products for each and every customer that delights us. It’s the easy things we go for, it’s the simplicity that excites us.

As N26 offers a slimmed down range of products that is clearly organised and easily understood, customers know within seconds what they can and want to pick.

3. Best-buddy Banking 

The kind of transparency being fostered by challenger banks suggests a positive step forward in the mind-set of financial institutions.

The way our banks now interact with us has changed into a completely different experience; just as well, because our post boxes can’t handle all those letters anymore! Companies have realised we need a little help now and then and so the emergence of features like personalised updates, automatically categorized spending reports and customisable #tags to organise our transactions are just what we need to get our finances on track. By using predictive intelligence, superior data challengers like Monzo or Squirrel also create a clear picture of our spending, making them the hidden heroes in our pockets.

The incredible extent of in-app services give us a feeling of security and control. From instant money transfers between N26 customers to real time push notifications after transactions, everything is clearly communicated alongside your balance. This is something Tandem, one of the challenger banks in the UK, believes in as well. They don’t only offer a service but ‘engage and encourage’ the nation to improve its financial well-being.

This is a banking experience that is actually worth experiencing.

4. The Human Touch

While digital banks know they are expected to delight us with innovations and a refreshing approach, they also appreciate the user experience is based on essential, even old-fashioned needs. As such, customers are often given the chance to interact with real people too – something N26 was quick to promote. No need to wait for your personal bank advisor to be back from his or her holiday; instead there will always be someone taking care of our concerns – internationally, via chat, email or phone.

Well, that was the idea at least…

In reality this offer is a pretty tough balancing act, something N26 had to learn the hard way. In summer 2016 400 customers had their accounts accidentaly closed after they made frequent withdrawals from ATMs. Only a few months later, when N26 moved their client base to a new infrastructure, customers were left with severe problems like failing transactions and undelivered bank cards. A massive lack, or gap, in their ‘people driven’ communications led their digitally-minded customers to make use of their common mouthpiece, social media, and declare their complaints, in real time.

It’s said that digital banks are pointing the way to the industry’s future, but what remains to be seen is how they get along with our traditional values. Despite the wonderful technology they use to make us fall in love with them, even in this digital age they must not forget about one unswerving need: the human touch.