N26 expands portfolio with stock and ETF trading feature

abdelaziz Fathi

Berlin-based banking startup N26 is broadening its range of banking products with the introduction of a new stock and ETF trading feature, initially launching in Austria.

N26

This expansion reflects a renewed focus on its core European markets and expanding its service offerings beyond traditional banking.

N26, which began as a challenger bank offering account and card management through a mobile app, has attracted millions of customers with its user-friendly approach. The company’s expansion into additional markets and product diversification came alongside decent funding rounds and hiring sprees. However, N26 has recently narrowed its focus to key European markets, specifically Germany, France, Spain, and Italy.

This consolidation is partly driven by regulatory scrutiny from Germany’s financial watchdog BaFin, which currently restricts N26 to accepting only 60,000 new clients per month.

N26 has been enhancing its anti-money laundering measures to align with regulatory requirements while exploring new revenue sources within its existing customer base. The addition of stock and ETF trading comes in collaboration with Upvest. The feature allows users to transfer funds from their N26 accounts to a dedicated trading space and invest in a range of ETFs or stocks, including fractional shares.

The company will charge €0.90 per trade, with premium customers receiving a certain number of free trades monthly, depending on their subscription plan. Initially, the trading feature will be limited to Austria, offering 100 ETFs with stocks to be added later, and will expand to Germany and other European countries subsequently.

N26’s recent initiatives, including the rollout of savings accounts in Spain and Germany, personal loans, and crypto trading in select markets, strengthens its shift into a full-fledged bank. With more than 8 million customers, €8 billion in assets under management, and over €110 billion in annual transaction volume, the neobank is steadily growing its financial footprint.

Despite these positive indicators, N26’s net loss swelled by 24% in the year just ended, coming in at 213.4 million euros. This was largely attributed to investments in infrastructure and compliance measures. However, the company forecasts its operating income for 2023 to take a step forward and expects to more than halve its net loss to 100 million euros.

N26’s roadmap culminates in an expectation of profitability by the second half of 2024, riding on the back of customer growth and improved profitability per customer.

BaFin fined the business €4.25 million in 2021 for its lax money laundering controls and placed a temporary limit on the number of new customers the bank could onboard each month. In a rare move, the regulator also appointed a special supervisor to monitor the digital lender.

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