What Are Challenger Banks?

Sometimes you have to disrupt the status quo in order to create a world that works better for everyone.

3 min read

Sometimes you have to disrupt the status quo in order to create a world that works better for everyone — and that’s exactly what challenger banks are attempting to do with the banking industry.

Challenger banks or neobanks are digital financial institutions that offer banking services without the complexities and costs that are generally associated with traditional banks. They usually don’t operate physical branches, choosing instead to focus on digital services like mobile apps. Because challenger banks have fewer overhead costs, they can often charge lower fees and provide perks like free basic accounts or fewer fees.

What makes a challenger to traditional banks?

Challenger banks are often defying accepted norms that are typically associated with conventional banking, such as confusing and expensive hidden fees and the hassles, time commitments, and costs associated with in-person branches. They are offering customers a new, all-digital way to manage their money that aims to be more convenient and less expensive. Both types of financial institutions focus on safety and can be FDIC-insured, but challengers tend to invest on innovative security features that are designed for the digital world.

Is N26 a challenger bank?

While N26 offers its accounts and banking services through it’s partner bank, Axos Bank®, Member FDIC, N26 is a modern digital financial institution rewriting many rules of banking to give you benefits that you won’t necessarily find at old-fashioned banks. These include:

  • No hidden fees, which are common at many traditional banks. You’ll never be surprised by sneaky fees for account maintenance, minimum balance, foreign transactions, or anything else.

  • Get paid up to two days early with direct deposit¹. 

  • A beautifully simple mobile banking experience. You can open an N26 account in just five minutes, and there’s no paperwork or waiting in long lines.

  • Control and flexibility so that you can manage your money on your terms. Set spending limits, enable or disable international payments, and lock your account immediately if your card gets stolen, directly from your phone.

Why are challenger banks emerging around the world?

Many Americans have grown disillusioned with traditional banks due to unexpected and expensive hidden fees, confusing small print, outdated digital tools, inflexibility, and frustrating bureaucracy. People crave something new, more tailored to their needs, and digital lifestyles. Challenger banks often provide highly mobile, tech-friendly solutions that help customers take control of their money and get ahead financially.

Are challenger banks safe?

Challenger banks offer different security features, but not all of them are created equal, so it’s important to do a little research before you open an account. At N26, safety is at the heart of everything we do. Protecting your money and your information is one of our top priorities, and you can rest assured that your account and money are always secure. 

With N26, your funds are FDIC-insured through our partner bank, Axos Bank®, Member FDIC. And thanks to the Zero Liability Policy² from Visa®, you won’t be responsible for any unauthorized transactions that are made with your debit card. Learn more about keeping your N26 account safe.

Challenge the status quo with N26

Your bank account should fit your lifestyle, your budget, and your financial goals — and that’s exactly how N26 was designed. We’re here to help you understand and take control of your money, so you can create the future you envision. And all it takes is a few swipes on your smartphone.

Say goodbye to the hassles of traditional banking. Sign up for an N26 account today.

¹ Faster funding claim is based on a comparison of our policy of making funds available upon receipt of payment instruction versus the typical banking practice of posting funds at settlement. Fraud prevention restrictions may delay availability of funds with or without notice. Early availability of funds requires payor’s support of direct deposit and is subject to the timing of payor’s payment instruction.

² Visa’s Zero Liability Policy covers U.S.-issued cards only and does not apply to certain commercial card transactions or transactions not processed by Visa. You must notify your card issuer immediately of any unauthorized use. For specific restrictions, limitations and other details, please consult your issuer.

The N26 account is offered by Axos Bank®, Member FDIC. N26 Inc. is a service provider of Axos Bank. All deposit accounts of the same ownership and/or vesting held at Axos Bank are combined and insured under the same FDIC Certificate 35546. All deposit accounts through Axos Bank brands are not separately insured by the FDIC from other deposit accounts held with the same ownership and/or vesting at Axos Bank. The N26 Visa® Debit Card is issued by Axos Bank pursuant to a license by Visa U.S.A. Inc. The N26 Visa Debit Card may be used everywhere Visa debit cards are accepted.

By N26

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