Challenger banks in Spain: who’s who (and what’s their tech)
FinTech Futures is exploring the challenger bank landscape in Spain.
With Spanish heavyweights like BBVA and Santander making great investments in new technologies (as well as in challenger banks), and a number of banks finding inspiration in the innovators abroad, the Iberian country is looking well-placed to disrupt the “traditional banking” model.
We’ll be revisiting and updating this list on a regular basis. If you have any additions to the list, please get in touch with our editorial team.
Last updated: 19 Febraury 2021
Digital challenger 11Onze is one of Catalonia’s first non-Spanish-linked banks. So far, it has 148 founding members.
11Onze is currently on the hunt for a banking licence from a state of the European Union, according to Spanish radio station alacarta.
On its website, 11Onze says it will offer loans, current accounts, payments, and a marketplace for goods and services.
As well as treasury and accounting solutions for both small and medium-sized enterprises (SMEs) and families. It also mentions a community banking offering “through its own platform”.
2Gether Global is a “collaborative banking platform” app based in Spain, now available in its home country following the launch of its open beta in January 2019.
However, it doesn’t define itself as a bank, but as a banking platform. It was founded by Salvador Casquero, Salvador Carrillo, and Luis Estrada in 2016. Its CEO is Ramon Ferraz.
The basis of the model is the 2GT token, which can be acquired through the app. Users need to hold a minimum of €10 worth of 2GT to access the services, and they get rewarded for their contribution in 2GT. When regulations allow in the future, 2Gether aims to decentralise ownership among the 2GT holders.
This coin is regulated by the Maltese authorities, as it’s the only country in the EU with blockchain regulation.
Bnc10, whose wordplay works in Spanish, Catalan and English, is based in Barcelona. It was co-founded in July 2018 by Jordi Dominguez, CEO, a long-term banker with experience in HSBC, Societe Generale and USAA; and William McCahey, COO, who has worked at Australian bank NAB and Scottish Clydesdale Bank.
Bnc10 has already opened up a waiting list for potential customers. “Welcome to the new era of banking with values and zero commissions,” it states.
It is mobile-focused, offering chat banking and WhatsApp banking through its app.
The bank doesn’t have its own banking licence, but instead is relying on a licence of an undisclosed established bank.
According to Bnc10’s CEO, Bnc10 has found a “seven-digit figure” of funding from an undisclosed investor.
Bnext is a digital and mobile bank that has openly admitted to be following the beat of UK’s Monzo.
The Bnext co-founders are Juan Antonio Rullán, CTO and Guillermo Vicandi, CEO, who has experience at BBVA and ING. FinTech Futures understands that Bnext is using a third-party licence.
By 2017, the bank had under ten staff, and a beta version was out on the market with 1,000 customers in Madrid and Barcelona. It also completed a Crowdcube round of €130,000, alongside a €170,000 from investment funds.
In 2018, Bnext closed a financing round of €1.5 million with the aim of reaching 100,000 active customers.
In April 2019 it launched its own travel insurance product with InterMundial.
The millennial bank went on to raise the largest Series A funding round ever in Spain, worth $25 million, led by DN Capital, Redalpine, and Speedinvest. The neobank plans to use the investment to launch its services in Latin America and consolidate its leadership in Spain.
Bunq is a new digital bank from the Netherlands which launched in its home country in 2015, and announced its expansion into Spain and Italy in 2018. The CEO and founder, Ali Niknam, said at the time the move to the new countries followed Bunq’s “successful growth” in the Netherlands and Germany.
In September 2014, Bunq obtained its official banking permit with the Dutch Central Bank. In November 2015, the app was available to the public.
It offers an account, through which the user can send payments to IBANs, contacts’ phone numbers and e-mail addresses, among other payments features. It also offers up to three different cards, Maestro or debit Mastercard, as well as being available for businesses.
The bank has its in-house developed core banking software and relies on a limited number of third party suppliers for its technology. Among these is Veridium, which provides the bank with biometrics software.
Opera, a freeware web browser founded in Norway, launched an in-browser cashback service and current account in Spain in February 2020.
Its free virtual debit card is issued by Mastercard and is Google Pay-enabled.
In December 2019, Opera’s acquisition, Fjord Bank, landed a specialised bank licence from the European Central Bank (ECB). Which means the fintech operates on this licence.
EVO Banco
EVO Banco is a Spanish bank based in Madrid, created by NCG Banco in March 2012. As part of its launch campaign it introduced its main financial product: “The Smart Account”.
The following year, NCG Banco sold the EVO Banco division to a US private equity firm, Apollo Global Management, for €60 million.
In 2018, Spain’s Bankinter bought EVO Banco. Since then, it has become the testing grounds for Bankinter, as well as a new channel to target younger demographics.
It is understood that Bankinter’s online portal Coinc will be integrated with EVO’s mobile app, which has now also fully launched a smart voice assistant.
Ferratum Bank
Ferratum Bank launched to the public in 2016 in Germany, Sweden and Norway. In 2017 it entered France and soon after, Spain.
A subsidiary of Helsinki-based Ferratum Group, the bank is licenced by the Malta Financial Services Authority.
Its CEO is Jussi Mekkonen, who comes from Nordea Bank.
The bank says it uses behavioural data analysis to generate intelligent, real-time and targeted recommendations to improve customer experience and add services over time according to users’ preferences.
In early 2016, CaixaBank, one of the biggest banks in Spain, launched imaginBank – a mobile-only bank that uses social media (Facebook, Twitter etc.) to connect with its customers.
The core product is the imaginBank current account (with a Visa debit card), which is commission free and allows customers to manage personal finances and make transfers and P2P payments. It supports free money transfers to any account in Spain, regardless of the bank they are held at.
Small transfers between individuals can be made without having to enter account numbers; instead, the recipient’s mobile number or e-mail can be used. Money can also be sent to a CaixaBank ATM, with customers then able to make a withdrawal without taking their card with them.
In 2017, imaginBank added a chatbot to its app to help millennials find offers and promotions most relevant to them, based on their preferences or location.
Not technically a bank, this is Orwell Group’s “pan-European” digital banking service, designed to operate in open architecture. Its CEO is Spanish-born Carlos Sanchez, who founded the firm in 2015.
A single entity covers all the EU and beyond at the same time, offering current/business accounts and cash management services (payments, FX, budgeting, cash pooling, advance payments and merchant services).
It launched in Spain in June 2017.
The firm is an IBAN issuer in the Spain, as well as UK, France, Italy and is planning an expansion in Germany, Portugal, Poland and other European and American countries over the next few years.
The firm says it plans to open its APIs to become a Bank-as-a-Service (BaaS) to any company willing to develop new interfaces or applications “to serve specific market needs”.
It is also the channel through which saving and lending banks and other financial services providers can distribute their products.
The digital banking service has gone into administration as reported on 05 August 2019.
In 2015, Monese launched in the UK as a mobile banking service. It was made available to 19 other European countries in June 2017, including Spain.
It was founded by Norris Koppel, an Estonian expat in London, and it last secured $60 million in capital in a Series B in September 2018.
Since its original launch, it has included direct debits, student accounts, and Google Pay payments, among other features.
In October 2018, it launched its Monese Business account in the UK, available in 11 languages, and started progressively releasing it throughout the Eurozone – and is now available in Spain too.
Germany-based challenger bank N26 offers its services in Spain, alongside any other country in the Eurozone except Cyprus and Malta.
It offers a free basic current account and a debit Mastercard card to all its customers, as well as a Maestro card for its customers in certain markets. Additionally customers can request overdraft, investment products, and premium current accounts.
N26 was founded by Maximilian Tayenthal and Valentin Stalf, and opened for business in 2016, under the name Number 26 and operating through a third-party licence. In early 2019, it raised $300 million in a Series D funding round, bringing its valuation to $2.7 billion. The new investment will fuel the bank’s plans to launch in the US.
The bank aims to have over 100 engineers by the end of 2019, and for this it set up a second European office in Barcelona.
For its underlying technology, N26 uses Mambu’s flagship core system, provided on a Software-as-a-Service (SaaS) basis.
Neo has been authorised to offer a multicurrency account for corporates by the Bank of Spain as of July 2019
Neo will allow the account holder to receive, store and pay in around 30 currencies. The Neo account will include an IBAN in the client’s name, and will be fully programmable in order to offer extended automation capabilities to clients.
The payment services will be exclusively available on getneo.com, and will run alongside the FX hedging services already offered by Neo Capital Markets (the investment services entity of the group).
This includes virtual multicurrency accounts for international payments and collections, FX hedging solutions and treasury investment. The platform will allow clients to reduce costs, digitise their treasury department, automate tasks and reduce errors which can occur through manual input.
The Neo multi-currency account will be available start 2020 in Spain, France, UK and Poland.
Nomo Banking
Nomo Banking is a new digital banking service, native to Spain, catering for freelancers and the self-employed.
The bank is a project by Banco Sabadell, which launched in October 2018, aimed at attracting and using investments by Sabadell’s venture capital arm, Innocells.
Its CEO is Xavier Capellades, who is a professor at the Zigurat Innovation and Technology Business School in Barcelona.
The bank offers a mobile app for round-the-clock working hours, automatic accounting and tax management. It also offers a card that is linked to customers’ other cards.
To top it all off, the bank includes a marketplace with partnerships like Raisin, iSalud.com, and others.
Openbank, a subsidiary of Santander, has been around since 1995. It went through a complete overhaul and rebrand in June 2017. It operates as an independent subsidiary of Santander, with 130+ staff based in a consolidated office in Madrid.
It targets the “professionals” segment with current accounts, savings, investment/wealth management and lending products (including mortgages), debit and credit cards.
The bank has over one million clients and €6 billion in deposits.
It focuses on digital banking, but has one flagship physical branch in Madrid.
For its technology, Openbank uses Temenos’ T24 suite, with the solutions hosted on the Amazon Web Services (AWS) cloud. For regulatory reporting, it uses AxiomSL. It also has a robo-advisory service.
Orange Bank was set up in France in November 2017, after some delay, by the French telecoms firm Orange and its bank partner Groupama.
It launched in Spain in autumn 2019, offering deposits, savings and cheque accounts.
For its technology, Orange Bank uses Mambu’s core banking system, delivered on a hosted basis.
Rebellion
Spanish fintech Rebellion says it aims to be the neobank which “best speaks the language of Generation Z”.
On the 24 October 2019, it became the first native fintech to have secured a banking licence and offer Spanish (ES) International Bank Account Numbers (IBANs).
The change to a Spanish IBAN for Rebellion account holders was integral to serving its 16-25 customer base, “because with this measure they will be able to direct their payrolls, send and receive transfers more easily […] and will soon be able to direct payments to [their] account,” says its CEO Sergio Cerro.
This is because companies require a Spanish IBAN for the address of payments or payroll.
Most of Rebellion’s native customers are students, so another helpful feature of having a Spanish IBAN is that they can now use their account to enter scholarships, as well as receiving monthly payments from the bank of mum and dad because one IBAN can be paid to another IBAN.
The challenger also integrates with Google and Apple Pay, and, according to La Vanguardia, is planning to expand into more countries soon.
Revolut is a payments and fintech firm launched in mid-2015. It is based in Level39, a financial tech incubator in London.
The offering is a mobile money app that includes a prepaid Mastercard debit card, currency exchange and P2P payments.
Revolut says it supports spending and ATM withdrawals in 90 currencies and sending in 23 currencies directly from the mobile app.
It’s “the only account for your global lifestyle”, the company says. Revolut is “beyond banking”.
In December 2018, Revolut received a “specialised” European banking licence, facilitated by Lithuania’s central bank. It launched in Germany the same year. In mid-2019, it opened a small tech hub in Berlin to tailor its offering further for the German market.
In April 2018, it raised an additional $250 million in Series C funding, which saw the fintech valued at $1.7 billion – a five-fold increase in less than a year. Later that year, it unveiled plans to raise $500 million in equity a Series D round and $1 billion in financing, bringing its valuation to $5 billion.
Earlier in 2018, it fully launched its open API – allowing users to integrate Revolut for Business accounts with third party software and in-house systems.
On the regtech side, it works with ClauseMatch and BearingPoint.
Over the last year, Revolut was rocked by compliance and culture criticisms, and saw a senior management shake-up, including the departure of the CFO and the appointment of a new CRO.
Self Bank
Self Bank used to be a subsidiary of Société Générale’s Boursorama, and has now been relaunched under the new ownership of private equity firm Warburg Pincus as a mobile bank.
Zelf is a Latvia-headquartered challenger. It has no card and no banking app, with all its services performed through instant messenger apps, including WhatsApp, Facebook Messenger, Viber, Telegram, LINE and WeChat.
The integration works by displaying buttons at the bottom of the messaging apps which will have labels such as ‘balance’ and ‘send money’.
The fintech gathered more than 60,000 sign ups ahead of its June 2020 launch in France and Spain.
CEO Elliot Goykhman worked at major banks including Deutsche Bank, Barclays and BNP Paribas, before spending the better half of the last ten years at a series of Eastern European banks including MDM Bank, B&N Bank, and Alfa-Bank.
Zelf’s default offering won’t require a physical card, but users can order one if they want. The fintech also offers two-factor authentication via an optional companion app to those users particularly concerned about security.
The fintech makes its money through interchange fees, premium account fees and – toward the end of 2020 and early 2021 – from loans, credit cards, and voice memo-activated invoices to help the gig economy.
Zelf uses French banking-as-a-service (BaaS) provider Treezor, a subsidiary of Société Générale group, to power its core offering. Treezor is planning to extend its loan underwriting capabilities, which will help facilitate some of Zelf’s later product roll outs.
Check out our challenger bank lists for the US, UK, Germany and Australia – they are all free to view and are updated on the regular basis!
Please can you cover Australia next? Thanks, Paul
Done a long time ago: https://www.fintechfutures.com/2018/08/australian-challenger-banks-whos-who-and-whats-their-tech/