N26, a Germany-based digital bank that recently closed on $100 million funding as part of an extended Series D, is distributing survey results regarding the US and European markets.
Not too long ago, N26 made the decision to exit the highly competitive UK digital banking market but the company remains committed to a North American expansion. The US market is notoriously fragmented with many large banks and hundreds of smaller banks, credit unions etc. vying for consumer business. It’s a tough nut to crack, in brief. Add to the entrenched traditional banks and a growing number of Fintechs are also competing for consumers as well as SMEs.
N26, a Fintech that has partnered with Axos Bank to provide services in the US, said its survey, entitled “Big Banking Chat” captured data from more than 10,000 adults in both Europe and the US.
The initiative is described as seeking to engage people in “one of the world’s biggest online banking discussions.” It is designed to explore how financial trends differ across the globe, but also universal concerns regarding financial challengse that have become more apparent during the COVID-19 crisis. The global survey found that money concerns have become one of the biggest worries for people after their health and, in the U.S. specifically, almost 75% of Americans negatively describe their feelings towards their finances.
So how have spending habits changed, according to N26?
Since the onset of the Coronavirus, spending of disposable income has changed for 78% of Americans.
Globally, spending of disposable income has dropped, apart from grocery shopping which has increased (63% to 65%). Subscription/streaming services have stayed the same. The biggest decreases in spending were for meals out (48% to 12%) and outdoor entertainment (35% to 7%).
The survey states that Americans are saving an average of almost $220 a month compared to €177 ($192) in Europe due to the introduction of social distancing and isolation measures.
Globally, 34% of respondents indicate they haven’t saved any money during self-isolation.
Over half (54%) of respondents globally have long-term savings goals, with Portugal and the U.S. having the highest percentage (63%).
Americans’ leading reason for saving money long term is for retirement (49%), compared to other countries whose number one reason is a rainy day fund (36%).
In a Coronavirus world, two-thirds (66%) of global consumers are planning to opt for contactless payment over cash moving forward with people in Ireland and Spain (75%) plan to do this the most.
In the U.S., almost 75% of Americans select a negative phrase to describe their feelings towards their finances, with almost half (46%) saying they’re ‘worried’ when they think about their finances, and 39% stating that they are ‘nervous’.
Nicolas Kopp, US CEO of N26, commented that there is a lot of confusion, frustration and anxiety around personal finances when it comes to banking. This is the challenge that N26 is seeking to solve:
“Our mission has always been to make banking simple and easy, and we are committed to supporting people by providing them with the tools they need in these uncertain times. A great example of this is our Apple Pay integration as our survey found that over 60% of people are planning to opt for contactless payments due to COVID19.”
Founding in 2013 but launching two years later, today N26 has more than 5 million customers in 25 markets. N26 has a full European banking license but no costly branch network. N26 has raised close to $800 million from the world’s best known VCs.