What do Airbnb, Uber, and the neobank ‘N26’ have in common?

You’d be correct if you answered “they’re all digital platforms”, yet they are actually more than that.

Airbnb revolutionized the hospitality and tourism sector by creating a platform where travelers choose accommodation that homeowners rent out for very competitive prices. Until not long ago, Airbnb has started offering tourism experiences and excursions done by locals of the country you’re visiting. (1) On the other hand, Uber offers peer-to-peer (P2P) ridesharing services, where both drivers and riders are put in contact via their app. (2)


However, the most important aspect about both companies is that all their financial transactions are done through their platforms, via their respective mobile applications. There is no physical cash exchange between the two parties using their services, which leads me to our next point: neobanks, like ‘N26’ that is based in Berlin, Germany. Launched in 2013, N26 accounts for over 500 employees, 1.5 million customers, and 215 million US dollars invested (11).

What are neobanks?

First and foremost, neobanks are not to be confused with other mobile applications who are merely an interface between traditional banks and their clients, that make financing and account managing user-friendly. The Seattle Times business journalist Robert Barba warns “it is important to know that neobanks are usually not banks: They do not have charters from the Office of the Comptroller of the Currency or state regulators, and they do not have coverage from Federal Deposit Insurance Corp. (FDIC)’’ (10).

Their definition, as explained in (BBVA) Bilbao Bank’s research paper (3), is that they are a digital substitute for traditional banking institutions. Therefore, what we call a ‘banking experience’ will only be experienced through mobile applications or other digital platforms. Robert Barba further explains “they work with specialty banks that are chartered to gain FDIC coverage for deposits created at neobanks, and provide prepaid cards in place of conventional debit cards.” (10)


For example, the way you would add money into your N26 account differs whether you live in Germany or not. If it’s the case, the app has a “+” button that enables you to enter to sum you’d like to add to your account. The app will then generate a barcode relative to that specific amount that you will scan and pay for in cash at the nearest branch (8). If you live anywhere else and have an N26 account, you may transfer the required amount of money by entering the IBAN number of an account you have in a traditional bank.

Until recently, neobanks’ biggest challenge was obtaining a banking license, however, with some governments -like the UK for example, having simplified the process, their numbers are now on the rise.

In fact, according to a study of variant market research (5), the compound annual growth rate is expected to significantly increase between the years 2017 and 2025.



The reason behind this trend is what most neobanks currently offer in comparison to regular banking institutions.

What do neobanks offer?

In an article written by Sia Consulting (6), those virtual banking institutions propose an array of benefits like being able to open a bank account in a 3 to 10 minutes using only your passport or ID, a free debit card that is completely manageable through their application, instant payment transfers, and use of their international debit cards abroad at no extra fees.
In addition to that, they also offer instant balance orders and expenses analytics, multi-currency accounts, and a virtual vault so that their clients are able to freeze a sum of money for future use.

Even though all the above seems tempting, there is still a lot to consider before diving into the digital banking realm.


“Neobanks might seem to spell disaster for traditional banks: an irrevocable move toward speed and simplicity. I don’t see it that way. This shift signals progress for consumers and a tremendous opportunity for banks — if they’re willing to modernize.” – Trevor Dryer


Trevor Dryer, a financial counselor for Forbes magazine, writes that the majority – specifically 90% of millennials, “have an active financial services relationship with traditional banks and only 4% use neobanks” (7). Both customers and businesses still rely on them for loans as they offer better interest rates, good payment installments alongside trustworthy financial expertise.

Nonetheless, digital banks still have the upper hand in eliminating lengthy paperwork, especially concerning loaning applications, thanks to an algorithm that will determine each client’s financial case. This, in return, will save time for both the bank – in the lending process, and the client waiting for an answer on the other end.


In conclusion, neobanks still have a long way to go in order to truly gain a foothold in the banking sector. Its attractive app design, user-friendly and time-efficient interface could prove to be its biggest forte. But in my opinion, one of the improvements that neobanks should opt for is a better understanding of consumer needs whilst simultaneously finding relevant solutions for them within the neobank framework.

On the other hand, traditional banks are now facing a challenge and would have to digitize their services in order to remain in a position of power.

It would be interesting to monitor this rising trend and watch out for the traditional banking institutions’ strategy to cope with the continuously ongoing digitization of everyday life.



Written by: Serena Shaar




(2) https://www.uber.com/fr/newsroom/histoire/

(3) https://www.bbvaresearch.com/wp-content/uploads/2016/01/DEO_Jan16_Cap5.pdf

(4) https://medium.com/crowdfundup/what-is-a-neo-bank-and-how-are-they-disrupting-traditional-banking-models-3c1b2fa5b8e1

(5) https://www.variantmarketresearch.com/report-categories/banking-financial-services-insurance-bfsi/neo-and-challenger-bank-market

(6) http://en.finance.sia-partners.com/20180530/neo-banks-tomorrows-banking-has-arrived

(7) https://www.forbes.com/sites/forbesfinancecouncil/2018/06/28/neobanks-might-destroy-traditional-banks-or-launch-their-next-wave-of-growth/#f263fe36da24

(8) https://www.deutscheskonto.org/en/number26-deposit-cash/

(9) https://www.finder.com/uk/n26-bank-review

(10) https://www.seattletimes.com/business/5-questions-to-ask-before-trying-a-neobank/

(11) https://n26.com/en-fr/press


Logo credit: https://n26.com/en-fr/logo-assets