N26 CPO on Digital Banking, Building Trust, and More: Spiros Margaris Interview

Switzerland based venture capitalist and fintech expert Spiros Margaris has released the first video interview of his new series @SpirosMargaris & Friends.

For this interview, Margaris talked to Georgina Smallwood, chief product officer (CPO) at N26, and one of Europe’s top female tech leaders, to learn more about her background story, her role at the company, as well as hear her views on the current state of fintech, and more particularly digital banking.

With over 5 million customers in 25 markets, N26 is one of Europe’s leading digital banks and biggest consumer startups, providing a free basic current account, an accompanying debit MasterCard, as well as overdraft and investment products, among many other things.

N26’s primary mission, Smallwood told Margaris, is to create “the best everyday banking experience in the world” by providing an intuitive, seamless user experience for mundane operations such as paying for coffee, paying bills, and making transfers to relatives and loved ones. These features and functionalities are part of what she refers to as N26’s “first value” proposal. “Those are things we are very focused on,” she said.

And then, there is what Smallwood calls creating “secondary value,” and that refers to what else customers can get out of N26. “Traditional banks have had this in things like mortgage rates, and savings products, and we will look to go to some of these places, but we want to go there with the requirements of what people want in the future, not what people had in the past,” she said. “Flexibility is really important with these things but also rewards.”

Building trust

Traditional banks are N26’s biggest competitors, Smallwood said, noting that perhaps the biggest challenge neobanks and digital banking startups face is gaining consumers’ trust, all the while remaining innovative and providing an exceptional customer journey.

“You need to identify as a bank and bring in the identity of being a bank into the organization,” she said. “While we want the glory, the growth and the smoothness and simplicity of the Netflix’s and the TikTok’s … we also [are responsible with customers’ money].”

Striking the right balance there can be tricky, she said, noting that oftentimes, customers themselves don’t realize that their behaviors and expectations towards banking are substantially different from the digital products they consume on a daily basis.

“We say we want [the instantaneously of social media] … but we actually get quite uncomfortable when things happen too fast with certain things,” Smallwood said.

“It might be that they want login to be instantaneous, but then, when it happens, they are like ‘that’s too fast, that can’t be secure.’ So you need to build in the psychological safety into the consumer journey so they are like ‘that was instant, but not instant to the point that it is not secure,’” she explained.

“You really need to understand the psychology of users with banking. You want to push [users] to the point where they think ‘this is really cool. This is as cool as the new app I just downloaded.’ But then, you also need to understand where the safety point is.”

Global banking

Originally from Germany, N26 launched in the US in mid-2019 with an initial offering that includes an N26 account via Axos Bank and a Visa debit card.

“Being in 25 markets globally, most in Europe, there are a lot of similarities across these markets, but the US is completely different,” Smallwood said. “For example, rewards are a high attractiveness, and metal cards have been around for a little while now. When you go to a university, a lot of kids have metal cards with incredibly high interest rates, and great rewards.”

“Taking some of the things we’ve learnt while crafting our US product and bringing these back to Europe is really exciting.

“While the market might be slightly different in how you deliver value and functionality, what people want is the same. That’s why global banking can be a thing.”

An Australian native, Smallwood cumulates more than 12 years of experience in global digital and software companies such as Xero, News Ltd and Scout24. At N26, Smallwood leads the global product and design businesses, responsible for direction, strategy, and delivery.

Watch the full video interview: