What is a banking license?

A few years back in July 2016, N26 was filled with excitement as we celebrated a great banking milestone—achieving official recognition as a licensed bank by the European Central Bank (ECB) and the German Federal Financial Supervisory Authority (BaFin). Since then, we’ve been busy developing and introducing innovative, mobile-first financial products as originally promised. It’s been a rewarding journey to provide 100% mobile banking products to over 5 million customers worldwide since then—but none of this would have been possible without receiving a full banking license. So what is it, and why does it matter?  

The simplest definition of a banking license is that it’s the legal requirement for a company that wishes to call itself a bank. Before July 2016, N26 was a financial technology (FinTech) company for which the core banking platform was provided by a partner bank. 

Since July 2016, N26 has been a fully licensed bank that complies with all the regulations set forth by the European Central Bank as with other traditional banks, and has the ability to provide all the services you typically expect from a bank. This includes retail banking basics like managing deposits in everyday personal and business bank accounts, and extends to more advanced banking activities like lending. In order to get this license, we had to successfully satisfy a series of tough prerequisites like the minimum capital requirement, regulatory compliance, and security and data protection—it’s no easy feat for most young companies.

As a result of having our license, we’re able to provide you with convenient, 100% mobile personal and business banking products as a fully recognized bank. We can lend money in the form of consumer credit loans in Germany and France with N26 Credit, and provide extra financial flexibility when you need it with N26 Overdraft in Germany and Austria. We can offer local IBANs for N26 bank accounts in Spain and Italy, or enter into a network of partner banks that allow you to earn high interest on your funds with N26 Savings. And of course, it also means that every customer’s deposit with N26 is protected up to €100,000, all thanks to the German Deposit Protection Scheme. All of this wouldn’t be possible if N26 wasn’t an official bank, with a valid banking license.

Interested to find out what other banking innovations are brewing at N26? You can find further information on our N26 Blog, where you’ll find exciting information ranging from our latest launches, to our top security tips, lifestyle-related articles, and more.