Neobanks across Germany

A neobank is a bank built around a mobile app, with account opening by video or eID check and no branch network. The word describes the business model. Legally a neobank that holds customer deposits is a credit institution like any other: it needs a license under the Kreditwesengesetz or a license from another EU country that it passports into Germany. Some apps that look like neobanks are in fact e-money institutions or partners of a banking as a service bank, which changes what happens to the money if something goes wrong.

The difference between a neobank and a digital bank is mostly one of origin. A digital bank can be the app of an established bank or a direct bank that has worked without branches for decades. Neobank usually means a company founded as a fintech that later got its own license. For the customer, the license behind the IBAN matters more than the label.

N26, founded and based in Berlin, is a German bank with a full BaFin license. In September 2021 BaFin fined it 4.25 million euros for weak anti-money laundering controls and capped its growth at 60,000 new customers per month. The cap ended on June 1, 2024. N26 says in its press release that it spent more than 100 million euros on compliance, including models that assess fraud risk before an account opens and self-learning transaction monitoring.

The supervision did not end there. In December 2025 BaFin barred N26 from granting mortgages in the Netherlands and from securitizing mortgage claims, appointed a special monitor and set additional capital requirements, after finding deficiencies in risk and complaint management, as Banking Dive reported. The same report puts N26 at 4.8 million revenue-relevant customers. For people working in compliance at a neobank, the N26 case is the German reference point for how BaFin uses growth limits.

A neobank from another EU country can serve German customers under the EU passport. Revolut has operated in Germany with a Lithuanian banking license since 2022. In October 2024 it began giving new German customers a German IBAN through the German branch of Revolut Bank UAB, which is registered with BaFin, and moving existing customers from Lithuanian to German account numbers. Revolut reported two million customers in Germany at that point.

A German IBAN matters in practice because some employers, landlords and direct debit creditors still hesitate with foreign account numbers, even though SEPA rules forbid that discrimination. Deposit protection follows the license: under the EU Deposit Guarantee Schemes Directive, deposits of up to 100,000 euros per customer and bank are covered by the scheme of the country where the bank is licensed, which for a branch of an EU bank is its home country.

Neobanks compete with established banks on the same payment rails. Since the EU instant payments regulation took effect, every German bank that offers SEPA transfers must also offer instant transfers at no higher price, which removed an early advantage of the apps. Wero, the wallet of the bank-owned European Payments Initiative, gives savings banks and cooperative banks a phone-number payment of their own.

On the other side, neobanks and brokers grow toward each other. Trade Republic, a Berlin neobroker licensed by BaFin and the Deutsche Bundesbank, now also holds a full banking license, and neobank apps add securities and crypto trading. Every one of these steps adds a license and a supervisory duty, from MiFID II for securities to MiCA for crypto.

Finance Loop is the meeting place for people who build and supervise neobanks: product and engineering teams, compliance and AML officers, and bankers who compete with them or supply their license. It connects the finance, IT and AI communities in Germany, Austria and Switzerland, with events in Frankfurt, Munich, Berlin and Hamburg. In Berlin, home of N26 and Trade Republic, Finance Loop brings together people from fintech in Berlin.

Finance Loop is a partner of Frankfurt Digital Finance and covered KI Exchange 2026 of Payment & Banking in Hamburg, a conference on AI in banks and fintechs. In Frankfurt, fintech and neobank people meet at the FinTech FFM meetups and at Finance Loop events at TechQuartier.

A neobank is a bank that runs its accounts and cards through a smartphone app and has no branches. In Germany a neobank that holds deposits needs a bank license from BaFin and the ECB or a passported license from another EU country, the same as any bank.

Yes. N26 is based in Berlin and holds a full German banking license. BaFin supervises it, and customer deposits fall under the German statutory deposit guarantee of up to 100,000 euros.

A neobank has no branches and handles account opening, support and payments in its app, usually with lower account fees. A traditional bank runs branches and cash services and offers a wider range of loans and advice. Both need the same license to take deposits, and both answer to BaFin for anti-money laundering and IT security.

Deposits at a licensed bank are protected up to 100,000 euros per customer. The scheme depends on where the bank is licensed: the German scheme for a German bank such as N26, the home-country scheme for a branch of a bank from another EU country. Money held by an e-money institution is safeguarded but is not a deposit.