Even though we live in a country of banks, their digital offers are still low compared to other European countries.
It was with the idea of filling this gap that Neon, the first online Swiss bank, was born. The startup has partnered with a banking actor to focus on technology and offer a unique product in Switzerland. Recently named finalist of the Swiss Fintech Awards, we interviewed Michael Noorlander, co-founder of Neon, to better understand this innovative project.
Neon is stirring up the Swiss banking landscape. Users have had to deal with lame banking apps and high and non-transparent fees for too long. We're offering a super-fast and affordable smartphone alternative for everyday finances - a bank account and card without any base fees, payments within Switzerland and the EU, all easily manageable with the neon app.
We, the founders, were annoyed ourselves with what banks had to offer for us - after all, we're consumers too. Plus, having worked for banks across Europe ourselves, we saw how things were moving abroad, particularly in Germany, France and the UK with cool and cheap innovations - Switzerland was clearly lagging behind. So we wrote the concept, found investors that are equally as motivated as us and launched the Beta version of our app within only half a year - that was in August 2018.
You won't find a solution for your everyday needs - transfers, receiving your salary, paying at the shop etc. - that is faster or cheaper. Which means you save time and money. In addition, we're 100% geared for the smartphone, so we fit neatly into our users' digital lives - using neon is as simple as sending a Whatsapp message.
Open banking is the foundation of our fast launch - there's no way we could have been as quick otherwise. Through its standardized APIs, we were able to dock onto the Open Platform of the Hypothekarbank Lenzburg, which made setting up the necessary connectivity between our app and the core banking system as simple as possible. And we can continuously add functionalities to our app that we can also route through the API layer - we're e.g. working on introducing e-bills.
Very well. We built up a four-digit user base in just a few months with our Beta product, and we got a lot of great feedback - both encouraging and challenging. We were almost surprised at the degree of passion we sparked in our customers - it must have been hidden under a thick layer of dust after years of very few fresh ideas and limited innovation by the traditional banks.
We want to become the leading mobile account in Switzerland. Our main focus is on private individuals, and there's a lot of potential in terms of products and services that we can offer via neon - we follow a platform philosophy. So far, we haven't planned any B2B offering, but who knows? We might get back to that in the future, starting for example with servicing self-employed people.
As mentioned, we follow a platform philosophy. We believe there are a few things that we are exceptionally good at, e.g. understanding our customers, building a great UX and scanning the market for the best products. However, we can't be good at everything, so we partner up with start-ups and established companies that are exceptionally good at what they do - e.g. Sonect for withdrawing cash at more than 900 points-of-sale in Switzerland or Contovista for spending analyses. This approach keeps our costs low and makes for the best user experience.
There's a lot of know-how, which makes for a good breeding ground - and, which is maybe not an advantage for us but for other fintechs, we have strong existing players that you can team up with. On the other hand the potential is limited both by the small domestic market and the regulatory difficulty of rendering financial services across borders. And operations costs are high, which is an issue for every Swiss start-up.
We're cautious with that as we're still learning every day! Three things that we believe have made us stronger: first, we spend a lot of time talking to and listening to our customers. Second, we've found a strong partner with the Hypothekarbank Lenzburg, which in turn has given us much of the necessary speed for a fast go-to-market. Third, we have mission-aligned and experienced investors who challenge us, but also help us.