My notes from the AltFi Berlin Summit 2019, taken while listening

1. 1
Notes from AltFi Berlin Summit 2019
Kristi Rohtsalu
20 November 2019
On Monday, 18 November 2019, curious minds, FinTech entrepreneurs and investors, forward-looking
bankers and regulators gathered in Berlin, in Steigenberger Hotel Am Kanzleramt for the inaugural AltFi
Berlin Summit 2019. We were there to explore the theme of ‘Scaling-Up in Europe’, and look at the
opportunity and challenges that Europe’s FinTech growth story holds.
Below are my notes from the event. I’m simply documenting what was said, writing while listening1
and
not offering any opinions of my own. All transcription mistakes are mine. For disclosure: I’m neither
affiliated to nor working for AltFi nor any of the attending companies. Nobody is paying me for this. I’m
simply doing this because I love doing this – and because I believe that someone might find it useful.
Contents
Welcome address......................................................................................................................................2
How far can Open Banking Go? ....................................................................................................................2
Alternative Lending in Germany: Will the Tortoise Win the Race?..............................................................4
Inside Europe's Most Valuable Fintech (Klarna, valuation: $5.5bn).............................................................5
Fixing the Business Model of Digital Banking ...............................................................................................6
Myth or Reality? Alternative Lending Has Entered the Mainstream............................................................7
AltFi Awards & Powerlist Announcement.....................................................................................................9
Lunch Break & AltFi Fintech Pitch Competition..........................................................................................10
Is the Tech Backlash Coming for Fintech?...................................................................................................11
How Regulators Need to Keep Up with the Digital Finance Revolution.....................................................12
Global Ambitions: Scaling-Up in Europe, And Beyond................................................................................14
Closing Fireside Chat with N26 (Germany’s most valuable FinTech) .........................................................14
Winner of the AltFi’s Fintech Pitch Competition ........................................................................................16
Wrap-up......................................................................................................................................................16
1
The text is copy-edited later for the typos and other drafting errors, of course. Also, links to the relevant websites
have been added later.

2. 2
Welcome address
David Stevenson, Editor in Chief of AltFi
• Berlin is big in Europe’s FinTech, also for the US-based investors: 12 bn of the US-based FinTech
investor money has gone to London last year (which is natural, given London’s status as a major global
FinTech hub) whereas 6 bn has come to Berlin!
• European FinTechs have started invading US, have started getting listed overseas.
• Europe is exporting regulations to US (GDPR, PSD22
and Open Banking); there is nothing like Open
Banking in the US. Europe is taking the lead here.
• Europe, together with Japan, is taking the lead in unconventional monetary policies, e.g. by applying
negative interest rates. Slowdown in global economic growth is clearly visible. Everyone is expecting
new monetary policies to be formed. The time is coming for implementing conceptions like ‘negative
interest rates’, ‘helicopter money’, ‘electric money’ – even if there are still a few years to go. FinTech
industry is a way of doing it / a way of innovating on monetary policies.
How far can Open Banking Go?
Tim Sievers, Founder and CEO of Deposit Solutions [WWW] http://www.deposit-solutions.com/
• Deposit Solutions (DS), founded in 2011, is one of the pioneers in Open Banking.3
• PSD2 has opened up banking for non-bank providers:
o AISP – Account Information Service Provider
o PISP – Payment Initiation Service Provider
o Fully effective from September 14, 2019
• Answering criticism towards PSD2 / Open Banking:
o Banks: “We have to pay for this, we have to set up all the infrastructure first: APIs, customer
on-boarding and -checks… There is no business model for us!” DS: We sympathise with this;
not just enforce Open Banking, but provide some business model for it.
o “Customers really do not want it. There is no pick-up in numbers of people embracing PSD2.
People do not even know what PSD2 is.” DS: a) People do not need to know what PSD2 stands
for – as they do not need to know how the engine of a car works in order to drive the car, and
2
GDPR – The EU General Data Protection Regulation
PSD2 – The EU Payment Services Directive, vol. 2
3
According to Wikipedia:
“Open banking is a financial services term as part of financial technology that refers to:
1. The use of open APIs that enable third-party developers to build applications and services around the
financial institution.
2. Greater financial transparency options for account holders ranging from open data to private data.
3. The use of open-source technology to achieve the above.”

3. 3
b) Open Banking is much more than PSD2. It’s way too early to say anything about its customer
adoption.
• Open Banking is:
o PSD2, and
o (More importantly) Open Architecture
• Open Architecture. In the sense of opening up one’s platform for third party services – has been
around for a long time:
o 1970s – mutual funds (One can invest into a fund of another banking group’s fund manager
while going into the office of one’s home bank.);
o 1990s – mortgage loans (at least in Germany);
o 2000s – structured products;
o Sept 2011 – Deposits.
• “If you do not open up, you won’t keep the margin, but you will lose the customer.”
o True, but negative statement.
o Better say: “In Open Banking everyone wins.”
▪ Customers will have more choice.
▪ PoS (Point-of-Sale / banks – as we have used to know them) have more offerings in
the ‘menu’ for prospective buyers / customers.
▪ Specialised product providers can focus on product development.
• The market of deposits is a huge market – and an underserved market. Currently, in order to get that
higher interest rate on his/her deposit the customer has to start a new banking relationship.
o It doesn’t have to be this way. Our solution: Deposit-as-a-Service (DaaS)
• How far can Open Banking go? It can go all the way, become industry/market standard for the entire
industry/market – not just being a standard in certain product categories. It can be sort of platform
economy, efficiently connecting customers with the product-focused specialists. It’s just more
effective structure of getting things done.
• Question from the audience: Isn’t funding from platforms such as Deposit Solutions ‘hot money’ for
banks, escaping as soon as things get sore in the macro environment?
o Answer: That’s a fair question. What you have to think about is what drives stickiness? Retail
deposits are sticky. Yet there is still no European-wide deposit insurance; thus, credibility of a
bank’s sovereign is what matters the most at the moment.

4. 4
Alternative Lending in Germany: Will the Tortoise Win the Race?
Dr. Bernhard Fuhrmann, Varengold Bank Board Member [WWW] https://www.varengold.de/home/
Daniel Zakowski, Auxmoney VP Marketplace Investments [WWW] https://www.auxmoney.com/
Ralph Pieper, CFO at Kapilendo AG [WWW] https://www.kapilendo.de/
Moderated by: Pelin Wolk, the Executive Board Director at Verband deutscher Kreditplattformen
• Germany is slow in FinTech adoption, yes. On the other hand: is being slow a bad thing as far as
innovation in financial services is concerned? The industry is based on trust – and going slow is one
way to ensure building trust. In that sense, going slowly is a good way to go. Germans are slower, yet
more careful: “Slow and steady wins the race.”
• In consumer lending space: Alternative lenders are creating new markets; they are serving the
customers that have been underserved by the banks.
• In business lending space: Business lending in Germany started only in 2015, so it’s a very young
industry, not yet established. Ca. 2/3 of the SME market is occupied by banks.
• Differences between UK market and German market:
o There are ca. 1,600 banks in Germany vs. ca. 300 banks in the UK; thus, there is more
competition from banks.
o Accessing data is an issue in Germany. Information from public registries is hard to get.
o Strict regulation. Since 2015 there is a formal regulation; still, there are frictions and issues.
o Alternative finance products that we are seeing on other markets, cannot be taken one-on-
one to Germany.
o In short: Germany is a though market to start FinTech business. Most important thing is to get
‘boring stuff’ right (control, governance, compliance etc.).
• Auxmoney is using PSD2 sort of data (account data) since 2015. Daniel Zakowski: Customers need to
understand that they are the owners of their data – and make use of this data in order to get better
offers from lenders.
• ‘Skin in the game’:
o Dr. Bernhard Fuhrmann: Platforms need to have ‘skin in the game’; otherwise they cannot
bring sustainable customer value.
o Daniel Zakowski: Our solution is transparency, disclosing line-by-line data; our reputation is
at stake; that’s the skin in the game.
o Dr. Bernhard Fuhrmann: Providing transparency is not the same as having skin in the game
(in money terms). That’s it.
o Moderator: That debate could continue forever. Let’s move on!
• In June 2019, Association of German Lending Platforms (Verband deutscher Kreditplattformen) was
created with the aims to: define industry standards; represent customer interests (incl. finding

5. 5
customers that have been left out of the market so far); increase market transparency; have a
dialogue with policy makers, regulators and other industry associations.
• Are we going to see some consolidation on the German market? There are not that many players on
the market; it’s too early for consolidation. Rather we are going to see more co-operation, incl. banks
co-operating with FinTechs.
• On positive note: Germany is a huge market with huge potential, even if the details of regulations are
nightmarish. Currently regulation is preventing fast growth in the FinTech industry. Regulation on
European Crowdlending Service Providers may represent a big opportunity.
• What is more difficult in Germany: finding borrowers or getting funds? Funding is no problem if other
things are right. Institutional investors come with ticket sizes of 100-200 million euros; you convince
a couple of investors and funding is there. Getting the timing of funding right (given the demand from
borrowers) is a bit more of an issue.
Inside Europe's Most Valuable Fintech (Klarna, valuation: $5.5bn)
Robert Bueninck, Klarna’s Managing Director for Germany, Austria and Switzerland [WWW]
https://www.klarna.com/de/
Moderated by: Oliver Smith, AltFi Editor
• Entering the world of payments… The ease with which Klarna enables people to shop. Traditional
start-up story: three founders got together in 2005, saw problems in online shopping (“Buying is fun
but paying is not.”); initially the idea was not received with enthusiasm, but they did it anyway.
• Klarna’s products:
o Instalment-based financing;
o Klarna is doing everything in-house, even Klarna Cloud; it is trying to enable PSD2 / share their
infrastructure with the others;
o Klarna Card enables customers to shop anywhere where VISA is accepted.
• What do conversations with big retailers now look like? They are looking at blocks: Nordics is one
block; US & Canada would be another; by using our services, retailers want to tackle certain blocks.
• Is Klarna becoming a digital bank? In a way, Klarna already is a digital bank: it has had banking license
for a couple of years and it definitely is digital.
• What does Klarna Culture look like? Currently, as a result of acquisitions, there are three cultures to
be melted into one: Klarna culture, Sofort culture and BillPay culture. On one hand, Klarna is trying to
maintain and cherish start-up culture, the ability to get many things done at the same time. On the
other hand, the size of the organization (1,000+ employees) has its implications.
• Klarna wants to own the direct consumer relationship, not to be just an invisible layer / just a rational
payment solution. This way it can help the customers in the full flow.

6. 6
• Is the business model sustainable and profitable? It’s profitable from year one.
Fixing the Business Model of Digital Banking
Tamaz Georgadze, Raisin co-founder and CEO [WWW] https://www.raisin.com/
Helen Bierton, Head of Banking at Starling Bank [WWW] https://www.starlingbank.com/
Sam Oakley, Head of Marketing at Bud [WWW] https://www.thisisbud.com/
Moderated by: Daniel Lanyon, AltFi Editor
• Survey: 80% of the conference attendees had downloaded at least one digital banking API.
• Business model of digital banks is still evolving / not established yet.
• Starling Bank, an API-based bank:
o “The way banking was working is not the way how customers want it to work.”
o Trends at the time when Starling was started: development of the APIs; more and more
people living their lives in phones.
o Diverse set of revenue streams: banking revenues (deposits), revenues from marketplace
services, revenues from organisations providing banking services.
o Aims to reach profitability by the end of next year (that is: end of 2020).
o Launching in new countries: launching in Ireland is already announced; Netherlands and
France are on the map.
• Raisin, a half-bank:
o Aims to create a real FinTech enabling bank in EU / not in UK because of Brexit.
o Starling is Banking-as-a-Service for Raisin in UK from day one.
o Client business. Third-party business. Bank customers.
o No week goes by without Raisin getting a new partnership: 87 banks, depositors, service
providers… Everything is built on partnerships.
o Aim: Be bigger than Deutsche Bank.
• Bud: discusses the World before and after Open Banking.
o Before: affiliate deal. Now: bank-FinTech relationships are pretty advanced.
o Current focus: aligned value chain for the customer.
• What matters – and what matters less?
o Starling:
▪ Understand what matters to the customer.

7. 7
▪ Build trustworthy environment. (Starling is said to be way ahead of others when it
comes to building trustworthy environment.)
▪ Customer expectations have been SO low when it comes to banking services. Now
their eyes are opening.
▪ The value shines from what you do not from what you say. What matters is being
consistent and being transparent.
o Raisin:
▪ The only way to get meaningful B2B partnerships is having meaningful B2C
partnerships; otherwise it would not be possible to understand what C is looking for.4
There is no exclusive B2B.
▪ What matters is learning. Everyone has issues (even us!); give positive experience in
a problem situation.
o If you have great UX5
, you do not have to be the best in pricing. (E.g.: Monzo is not the best
in pricing, but it has great UX.)
• Next step in the development of marketplaces: Set the new basement to the financial services
industry. E.g. tell the customer: “You are paying too much for your utility bill. There are other options
like…” – and make it easy for the customer to choose between alternatives / better / cheaper options.
• Keys for progress:
o Improvement in the quality of APIs;
o Get users to actually use the new services. People are still afraid and have unfounded fears, a
la: “How my utility bill is going to get paid? Who does what? What if something goes wrong?”
Critical mass: 20-30% of people start using a service.
• Question to Raisin from the audience: Are platforms like Raisin pushing interest rates higher? Answer
by Tamaz Georgadze: “I hope so.”
Myth or Reality? Alternative Lending Has Entered the Mainstream
Ivaylo Ivanov, CEO of IUVO GROUP [WWW] https://www.iuvo-group.com/en/
Jakob Carstens, Head of Marketing at Funding Circle [WWW] https://www.fundingcircle.com/uk/
Martins Sulte, Mintos Co-founder and CEO [WWW] https://www.mintos.com/en/
Moderated by: David Stevenson, AltFi
• David Stevenson: The term P2P6
has certain reputation problem. Do you still use the term?
4
B2B – Business-to-Business, refers to a business models where customers of a business are other businesses.
B2C – Business-to-Consumer, refers to a business model where customers of a business are consumers / people.
C – Consumer
5
UX – User Experience
6
P2P – Peer-to-Peer

8. 8
o Mintos: We open up the opportunity for investing into loans. We do not use the term ‘P2P
lending’.
o Funding Circle: After we dropped the term ‘P2P lending’, our sales in Germany increased
markedly.
▪ The customers (here: borrowers) do not care from where the money is coming from
until it’s coming – and coming fast; for them, we use the term ‘SME lending’.
▪ The problem with the term ‘P2P’ is client (here: investor) saying: “I do not trust it.”
Instead, we use the term ‘investing into loans’.
o David Stevenson: In short, you are trying to sound more mainstream, drop references to
alternative finance. [No objections to this.]
• Retail vs institutional investors:
o Is reliance on retail investors limiting Mintos’ ability to scale? It takes time to build the base
of retail investors – but they are sticky. Currently Mintos has ca. 200,000 retail investors.
o About 20% of Funding Circle’s investors in Germany are retail investors. Retail investors help
to build brand awareness and trust.
• Germany is a big market of savings – but not so big market of investments. How are the platforms
positioning themselves / their offering to prospective investors? Is it: a) saving opportunity, b) money
market+ or c) investment opportunity?
o Mintos: We offer returns 10% plus; it is an investment product.
o IUVO: It is an investment product, not guaranteed. Yields are in range of 8-9% annually. There
have been no defaults so far; we have been on the market for 2-3 years. [Moderator:
Expecting to see some defaults…]
o Funding Circle: Yields in Germany are in range of 5-7%; for relatively lower yields investors
expect more stable market.
• David Stevenson: Double digit returns spell trouble in fixed income investing…
o Mintos: It depends from the markets and market segments where you are operating. If you
want security, you lend in the EU; double digits you get from the east.
• David Stevenson: We are late in the cycle. What should we expect about the uptick in defaults?
o Mintos: Nobody knows. A proxy would be to look at the credit card debt in the US during the
last financial crisis. Small loans are hit less / are easier for the borrower to repay.
o IUVO: Our investors are carrying the risk of the companies not the risk of the borrowers. They
should be looking on how the guaranteeing companies are doing. Risk ratings are from
originators.
• Question from the audience: Are you profitable – and if not, when do you expect reaching
profitability?

9. 9
o Mintos: We were profitable at the beginning of 2017. Currently we are focused on investing
into growth; some quarters are profitable while the others are not.
o IUVO: The same as with Mintos; currently the company is investing into growth, but could be
profitable already now if choosing so.
o Funding Circle: It’s a publicly listed company. Financial reports are public. It’s no secret that
currently the company is making loss. Any plans on reaching profitability are to be announced
via the stock exchange.
• Question from the audience: Does the AML scandal in Nordics have an impact on your business?
o Mintos: Not so much.
o IUVO: It does not have any impact.
• Question from the audience: How are regulators reacting to your business model?
o Mintos: Lending companies are regulated. Regulation of investor side depends on country.
Regulatory approaches are still forming. Regulators want to be helpful – we have good
working relationship.
o IUVO: There are still grey areas.
AltFi Awards & Powerlist Announcement
Oliver Smith, AltFi Editor
• Alternative Finance awards:
o Alternative Finance Platform Of The Year: Minots
o P2P Lending Platform Of The Year: Growth Street
o Direct Lending Platform Of The Year: Credit Shelf
o Crowdfunding Platform Of The Year: PrimaryBid
o Property Finance Platform Of The Year: Landbay
o Alternative Credit Fund Manager Of The Year: Fintex capital
• Fintech awards:
o FinTech Of The Year: Monzo
o Digital Wealth Manager Of The Year: Moneybox
o Digital Bank Of The Year: Starling Bank
o VC Investor Of The Year: Passion Capital
o Advisory Firm Of The Year: Fox Williams
• Special awards:

10. 10
o People’s Choice Award: Mintos (for the fourth year running)
o Editor’s Choice Award: Revolut
o Special Industry Contribution: Imran Gulamhuseinwala
o The One To Watch: Freetrade
• AltFi Power list, combined based on four factors: social media followings, assets under management,
customer and staff numbers (selected for the slide):
o Tamaz Georgadze, CEO at Raisin (Savings & Investments)
o Cordelia Kafetz, HEas of Fintech Hub at Bank of England (Regulators)
o Tim Levene, CEO at Augmentum Fintech (Investors)
o Lisa Jacobs, UK Marketing Director at Funding Circle (Alternative Lending)
o Céline Lazorthes, Founder at MangoPay (Payments)
o Meri Williams, CTO at Monzo (Digital Banking)
Lunch Break & AltFi Fintech Pitch Competition

11. 11
Each of the following start-ups had 5 minutes and 3 slides to pitch their businesses:
• Zuper [WWW] https://www.getzuper.com/
• Insha [WWW] https://www.getinsha.com/en/
• Neufund [WWW] https://neufund.org/
• Mattrvest [WWW] https://mattrvest.com/
• Myos [WWW] https://www.myos.co/en
• Circula [WWW] https://www.circula.com/en/
Is the Tech Backlash Coming for Fintech?
Martyn Homan, Augmentum Fintech Partner [WWW] https://augmentum.vc/
Ramin Niroumand, Finleap CEO and Founder [WWW] https://www.finleap.com/
Moderated by: David Stevenson, AltFi
(Chad West, Revolut Director of Marketing and Communications, wasn’t there – as was joked – for obvious
reasons.)
• Augmentum: Three phases in FinTech: 1) perceived as noble, 2) provokes anger – when it starts
getting traction, and 3) provokes panic. In EU, FinTech still looks noble, but is close to the end of the
first phase.
• Finleap: What would ‘backlash’ exactly mean? Investments going down? In B2B, backlash is expected
to be smaller than in B2C. Backlash in finance (e.g.: sudden change in interest rates) would have much
greater impact than backlash in tech.
• Augmentum: The first wave of financial innovation was innovation in front-end, the low-hanging fruit.
Middle- and back-end (e.g. AI7
) are still in early stages; there is where we get deeper. We are in the
cycle of building trust.
• Finleap on trust:
o Trust is core, of course.
o In B2B business, gaining trust is more difficult than in the segment of serving underbanked
consumers; underbanked consumers do not need that much convincing. Key issue in B2B: Is
the guy still there in three years? On the other hand, once you have built the trust, it will
accelerate.
o It helps to be regulated, but at the end you need to perform.
• Corporate culture is becoming more and more into focus in the industry:
7
AI – Artificial Intelligence

12. 12
o Partnering revolution;
o High degree of diversity when it comes to talent / diversity by background;
o Most sought by FinTechs: entrepreneurial talent; needed for building banking products and
insurance products within a few months instead of a few years;
o Balance between fast-paced entrepreneurs and overseeing bankers;
o Typically, after series B new team comes in / the need for more operational and steady mode;
o Great people create great culture; inevitably, people create their own culture – culture cannot
be forced.
• Augmentum: FinTech stadiums: 1) distribution state, 2) automation state, 3) segmentation state
based on data / advanced analytics; investments are currently still predominately in start-ups that are
in distribution state.
• Is Big Tech (Google, Amazon, Facebook, Apple, Microsoft, …) going to ‘swallow’ FinTech within next
5-10 years?
o Synergies are small;
o It would be a defensive play;
o So far Big Tech only partners with Big Fin;
o Amazon is always doing things on its own way; entering the space of payments – yes; maybe
insurance…
• What’s the next Big FinTech Thing to watch? A few guesses:
o It will be something around the data.
o How can we really build European ecosystem of FinTech? It’s still very national.
o How can FinTech enable mobility? (E.g.: digital wallets.)
o Management of finances for businesses – just like for consumers there is consumer finance
management; SME banking field is huge.
• Potential storms for FinTechs coming?
o When regulators closed down a big FinTech;
o (Disorderly) Brexit: lots of FinTechs would no longer be in business;
o The next steps in FinTech development are very capital hungry; many companies are currently
cash flow negative – and thus very vulnerable to potential hits.
How Regulators Need to Keep Up with the Digital Finance Revolution
Chris Bartz, Elinvar CEO [WWW] https://elinvar.co.uk/
Jana Orlova, 4Finance Head of Group Legal Commercial [WWW] https://www.4finance.com/

13. 13
Julia von Buttlar, Deputy Head of the division dealing with all aspects of securities related delinquency at
the BaFin’s Directorate for Securities Supervision
Moderated by: Caspar Tobias Schlenk, Finance Forward
• Julia von Buttlar (expressing her own personal views which are not necessarily those of BaFin):
o We see evolution rather than revolution. Big Data, AI, blockchain – more FinTechs in those
areas.
o FinTechs want to be on the safe side and comply with the regulations.
o We are all challenged by digital innovation.
o It takes time to agree in international regulations; therefore, it makes sense for countries to
create their own regulation.
• Jana Orlova / 4Finance (introduced as someone who is very open in her criticism towards regulations
and regulatory frameworks): It’s overregulation, complicated to navigate – especially cross-border.
Effectively, consumer lenders are told how they should run their businesses. Just for providing small
credits in the amount of a few hundred euros a creditor has to comply with:
o Financial regulations;
o Consumer protection laws;
o GDPR – and data protection is very specific;
o AML regulations – which is a huge topic on its own.
• Chris Bartz / Elinvar:
o Even if there is European regulation, there are local adoptions which differ by country. Some
progress has been made in right direction.
o There are promising role models, e.g. Luxembourg.
o Infrastructure topics should be regulated centrally.
• Thoughts on regulatory ‘sandboxes’:
o Something may work in the sandbox but not when you want to get out of the sandbox.
o Some issues such as KYC8
cannot be solved inside the sandbox.
o FinTech entrepreneurs would believe into better regulatory process rather than sandbox.
Better process would be faster (e.g. PSD2 took years).
• Lack of single European market is seen as the biggest barrier for European FinTechs. Most of incomers
(with the US and UK origin) are much more scaled.
8
KYC – Know Your Customer

14. 14
Global Ambitions: Scaling-Up in Europe, And Beyond
Antti-Jussi Suominen, Holvi CEO [WWW] https://www.holvi.com/gb/
Michael Möglich, Head of Market Development for France and Germany at Monese [WWW]
https://monese.com/
Sascha Nagel, GoCardless Director Sales DASH [WWW] https://gocardless.com/
Moderated by: Isabel Woodford, Sifted
• How German start-ups differ from the others e.g. in UK and in France?
o GoCardless (English origin): Mentality is different; focus on regulatory aspects, going into
details.
o Monese (also UK based, founded by Estonian Norris Koppel): Germans start their business
with the mindset of being European – only then moving global.
• Scaling up has a lot to do with product-market fit. Finding that fit takes a lot longer than one might
think at the outset:
o When entering a new market, you start from zero. Your brand is not known. It starts from
building trust: founders’ story, vision, emphasising global partnerships that you have.
o Start with the customer, finding the target segment. Making sure that the product fits to the
local context. Local context is very important.
o Find what you have that scales cross-border. (You need to have something to scale up!!) For
example: digital marketing scales (with the message tailored to local market, of course).
• Scaling in terms of team / diversity of cultures inside the company:
o It’s important to have people with right values – values are super important. (“We do not have
the room for arrogant assholes!”) What are their values? What drives them? First you hire,
then you follow up during the trial period – and when they fail, you give a second chance and
fire if not living up the values.
o Finding people that are close to the target structure is very important; still, organisation set-
up also matters a lot.
• End of September / beginning of October 2019, GoCardless launched in US. Experiences:
o Needed to educate the US on direct debit.
o The pitch in the US is completely different than the pitch in Germany.
• At what point do you decide that a country is too difficult? For example: GoCardless tried to enter
Switzerland but found that customers do not value the service enough.
Closing Fireside Chat with N26 (Germany’s most valuable FinTech)
Georg Hauer, N26 General Manager, Germany, Austria and Switzerland [WWW] https://n26.com/en-eu
Moderated by: Daniel Lanyoun, AltFi Editor

15. 15
• N26 is a mobile bank and a licenced bank that is focused on retail customers. (“Helping people to
finance their dreams.”)
• Ambition: becoming the biggest bank in Germany: not only the biggest digital bank, but the biggest
bank; becoming the most valuable company in 5-7 years.
• Global ambition has been part of the N26’s DNA from start:
o Building a product in scalable way from Day 1 is precondition for global expansion.
o Anything that is really-really important for the business model is done in-house. Everything
else is done by using partners, incl. partner banks.
o Products are rolled out from the test phase only if they really-really work. What matters, is to
deliver the absolute best customer value.
o The question is not “How can we grow 10% each month?” but “How can we 100x our
customers?” It’s a different mentality, a shift in mentality that changes entire game.
• On the other hand, N26 is not trying to get customers for every price. For sustainable growth it is
looking at profitability on customer level: “How to make each customer profitable? How many
customers actually use us on daily basis? What is the engagement on daily basis?” N26 does not want
to be a big bank just on paper.
• Views on regulation:
o Regulation is one of the reasons why it took so long for the disruption in the banking industry
to happen.
o Grab regulation as an opportunity. “If regulation is a challenge to the others, how can we
make use of it?” E.g.: EU passporting is a game changer.
• US expansion:
o N26 is the first European bank (of its kind) that successfully launched on the US market.
o Difference between Europe and US: In Europe, people have 2-3 cards. In US people have 10
cards. N26 wants to be #1 or #2 payment card there.
• What about bundling financial services? N26 does the unbundling.
• How does N26 hire? What’s the culture there?
o N26 has merged two cultures:
▪ High-paced tech start-up like culture, and
▪ A culture of highly professionally managed bank.
o For the later, they have always been hiring people from banks.
o The offer to the prospective hires: “Change an industry! No salary in the World can really beat
it.” (Moderator: “I’m sure there is one, but fair enough ”)

16. 16
• What is beyond API-based bank? Build technological organization that is able to respond fast to
changes.
• What’s the next innovation in N26? Lending is a side-business. The main thing is helping customers to
manage their money / finances in a better way.
• Why Berlin? Berlin’s incredible pull of international talent was the deciding factor for N26.
Winner of the AltFi’s Fintech Pitch Competition
Out of the six rising German fintech stars (Neufund, Zuper, Mattrvest, Insha, Circula, Myos), audience
voted as the winner: Insha [WWW] https://www.getinsha.com/en/.
Insha is Europe’s first interest-free digital-only banking service, supported by Albaraka Türk and launched
in Germany.
While Insha earned 43% of the votes, 42% of the votes went to Mattrvest [WWW] https://mattrvest.com/.
Mattrvest is venture-backed start-up which focuses on connecting digital-savvy generation in EU with
sustainable finance options available on the market.
Wrap-up
There are three themes, going forward:
1. Open Banking / Open Finance,
2. Entering mainstream (which is a double-edged sword), and
3. Global ambitions.