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German mobile bank N26 has posted deeper losses in 2021, spending heavily on upgrading its technology stack and strengthening compliance controls
The bank reported a net loss for the year of €172.4 million, 14.45% up on the previous year.
Launched in Germany and Austria in January 2015, N26 began as a current account with a Mastercard. It has since moved into areas such as crypto and stock trading, attracting more than seven million customers in two dozen countries.
In October, N26 raised more than $900 million in a Series E funding round at a valuation topping $9 billion.
However, the company is yet to turn a profit and has faced some stiff headwinds over the last couple of years; withdrawing from the US market, facing scrutiny from German regulatory authorities, and dealing with a revolt from hard-pressed staff. In March, The Bank of Italy imposed a ban on the recutiment of new customers following an on-site inspection which uncovered lax money laundering controls.
Despite growing revenues and fee-paying customers, the bank made substantial investments in strengthening regulatory frameworks, including systems and personnel to bolster the organization’s key business functions, driving a significant increase in administrative expenditure compared to the previous year. On the IT side, the bank introduced over a dozen new features alongside more than 15 platform upgrades to enhance the user experience, including a vastly improved customer complaints mechanism.
Valentin Stalf, CEO and co-founder of N26, says: “2021 saw us solidify our position as a leader in Europe’s digital banking market. We made further investments in our product, in our team, and in the scalability of our platform.”
On the plus-side, N26 grew its user base by over 1 million YoY to 8 million customers, and increased revenue-relevant customers to more than 3.7 million. Correspondingly, transaction volume grew 59% to €80 billion (FY-20: €50.3 billion) while customer deposits increased by 52% to €6.1 billion (FY-20: €4.0 billion).
Financial Services
