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NUMBER26 wants to become Europe's first solely digital bank, and cofounder Valentin Stalf thinks he knows how to get there: design. "Design has changed a lot of industries: fashion, travel, music," Stalf told the audience at WIRED Money. "Design may be user experience, but it's also about user interface." And if you want to be digital-only, this is where you need to excel.
Berlin-based NUMBER26, which raised £7.3m in Series A funding earlier this year, uses simple interfaces optimised for mobile to make finance simpler. It means you can signup, carry out transactions and even block and unblock your bank card from within the app. "Normally you have to sign up to a bank account on paper. With ours you can do it on a mobile phone in around four minutes. At a traditional German bank it takes one and a half hours at least to sign up 'to get to know the customers'."
Customer behaviour has changed dramatically, Stalf argues, and banks should be communicating with customers in a way that makes their life easy from the very start. "Banks tend to write much too much information, it's always text heavy. We try to do everything digital in a way people like to read it." "When most people first activate their [traditional] account, they are overwhelmed by the information they are getting. Most people don't know what's important to them. Sometimes they don't even know how their interest rate is paid out. We tried to prioritise information, and bring much more intelligence into the account."
As an example, NUMBER26 has begun customising bank statements, believing people are not interested in all their transactions but only the ones that are irregular. "I don't believe in the historical or chronological model," says Stalf.
Other areas NUMBER26 differs in, is by providing evidence that transfers occur immediately -- "then you don't have to think about it anymore" -- and in allowing users to block and unblock lost cards in the app or at an ATM, rather than forcing them to find and call a customer services number.
Perhaps the area that will be most important to how NUMBER26 and future competitors fare in the future, will be the information they have on their customers and how they use it.
Stalf points out that traditional banks believe high street branches bring them closer to the customer. However, NUMBER26 customers open their app at least every two days, and every time they do the bank learns more about what they are doing and what they need. "We can actually react to what customers need. That's very important."
But is the threat of the incumbent a concern? Not really, says Stalf. NUMBER26 may have racked up only 25,000 customers -- but that was in just six months from the January launch date, and with no marketing.
Perhaps more important to Stalf's lack of fear is the company's relative youth when compared to the incumbents. While the average age of NUMBER26 employees is 28, with 40 percent of them working on the tech side, Stalf says of the big banks: "Imagine you have people just 55-year-olds on the board deciding digital strategy. I already find it challenging to think how an 18-year-old uses their mobile."
This article was originally published by WIRED UK
