Competition with neobanks
Postbank wants to introduce a fee-free account
12/04/2024 – 2:31 p.mReading time: 2 min.
Postbank wants to advance digitalization. That’s why there will soon be an online account without account management fees. Further innovations are planned.
Postbank plans to introduce a free digital account next year. There will be new and more differentiated account models, “and it would be obvious if teh cheapest of these modular components were free of charge,” said dominik Hennen, responsible for the broad private customer business at Deutsche Bank and Postbank, to the “Handelsblatt”. Hennen hopes to gain “many new customers” through this step.
The last time there was a free account at Postbank was in 2016. The prerequisite at that time was an incoming payment of 1,000 euros per month. According to Hennen, the new account model should be based “on the neobanks”. Neobanks such as revolut and N26 usually do not have a branch network, but rather work via apps and their websites.
Digitalization should also be expanded in other areas. 230 of the 550 Postbank branches are expected to close by mid-2026. “By the end of the year we will have closed 78 locations,” said Hennen.
On the other hand, the bank is introducing a service that allows customers to withdraw or deposit up to almost 1,000 euros at the supermarket checkout free of charge.
The bank wants to make private customer business more profitable through more digital offerings.At the same time, jobs are being lost. “Around 20 percent of the central department positions will be eliminated, a large part of them in my area,” Hennen continued.
Deutsche Bank announced last June that it wanted to partially offset branch closures at Postbank through regional advice centers. In the future, private customers will be able to obtain facts about financial questions there by telephone or video link, even outside the usual opening hours of branches and on Saturdays.
“We want to significantly change Postbank’s market presence for our customers, moving away from a more branch-based model to a model where the customer can ultimately decide which channels they would like to be served through,” said the head of the German private customer bank Bank, Lars Stoy back then.
How is Postbank’s fee-free account initiative expected to impact competition with neobanks?
Interview between Time.news Editor adn Banking Expert on Postbank’s Fee-Free Account Initiative
Time.news Editor (TNE): Welcome, everyone! Today, we have a interesting discussion lined up about the evolving landscape of banking, especially with the increasing competition posed by neobanks. Joining us is Dr. Anna Schmidt, a banking expert and financial analyst. Anna, thank you for being here.
Dr. Anna Schmidt (AS): Thank you for having me! I’m excited to delve into this topic.
TNE: So,let’s talk about Postbank’s recent move to introduce a fee-free account. This seems like a game changer, especially considering the rising popularity of neobanks. What are your thoughts on their strategy?
AS: Absolutely! Postbank’s decision to offer a fee-free account is a strategic response to the encroaching competition from neobanks, which have capitalized on low fees and user-amiable digital interfaces. By eliminating account fees, Postbank aims to retain its existing customers and attract new ones who might potentially be considering switching to a neobank.
TNE: That makes a lot of sense. Do you think traditional banks like Postbank can compete effectively with neobanks, given their established business models?
AS: It’s definitely a challenge, but traditional banks have some advantages. They possess a wealth of data on their customers, established trust, and a wide range of services. Though,they need to innovate and adapt quickly. Offering a fee-free account is a good start, but they also need to enhance their digital services and improve customer experience to fully compete.
TNE: Speaking of digital services, how important is technology in this competition?
AS: Technology plays a crucial role.Neobanks leverage cutting-edge technology to provide seamless, intuitive experiences—think apps that allow for instant transactions and real-time account management. Traditional banks must invest in digital platforms to match these conveniences. If they fail to do so, they risk losing the tech-savvy customers who expect more from their banking experience.
TNE: It’s interesting to see how customer expectations are evolving. What do you think Postbank needs to do beyond offering a fee-free account to appeal to younger demographics, who often prefer neobanks?
AS: Engaging younger customers involves more than just free accounts. Postbank should consider integrating features like budgeting tools, savings goals, and personalized financial advice through AI. Additionally, a strong social media presence and community engagement can help in building brand loyalty among younger users.
TNE: Great points! as we look at this shift in the industry, what do you see as the biggest risk for traditional banks?
AS: The biggest risk lies in complacency. If traditional banks don’t evolve and continue to innovate, they might become irrelevant. The digital finance landscape is rapidly changing, and customer loyalty is no longer a guarantee. Failing to meet the demands of modern consumers could lead to significant revenue losses.
TNE: That definitely sets a clear picture of the stakes involved.Anna, what do you think the future holds for both traditional banks and neobanks?
AS: I believe we will see a coexistence of both types of banks in the market. Traditional banks will likely continue to evolve and adapt, while neobanks will push the envelope with innovation. Over time, we may see collaborations or partnerships where traditional banks offer neobank-like features, combining the best of both worlds to create hybrid models that benefit consumers.
TNE: Thank you, Dr.Schmidt, for your insights on this important topic. It will be fascinating to see how the banking sector evolves in the coming months.
AS: Thank you for having me! I’m looking forward to the developments as well.
TNE: And thank you to our audience for tuning in. Stay informed with Time.news as we continue to cover changes in the financial landscape!