Traditional banking is broken – not many would dispute that. Creating the next generation of bank accounts is therefore an enticing prospect for entrepreneurs, and one Berlin-based startup believes it has the answer. Avuba boasts that its new bank account will cut down on the ‘hyper’ bureaucracy connected with current offerings, as well as being completely digital and more fun to use.
The company has teamed up with privatbank 1891 and will offer an account which comes with debit and credit cards, free worldwide cash withdrawals and expenses analytics.
More than 100 users have already signed up and the Avuba team have lofty ambitions for their product. They offer a 24/7 helpline, availability within 24-hours of signing up, text message authentication and easy money transfer via the Avuba app.
Co-founder Jonas Piela said: “In the first moment [after having the idea], I thought I was crazy – but once I went down the rabbit hole, I realised more and more how possible it was to challenge the big banks with a bit of intelligence.”
To being with, the account has a subscription fee of €6.99 a month, with no transaction costs. Further down the line, Piela is thinking of introducing peer-to-peer money transfer ability.
But Avuba is far from the only startup trying to reinvent the retail banking industry. There is the likes of American outfit Simple, an online bank which notches up $1 billion (€758 million) in transactions a year, as well as Finnish company Holvi. The existence of several major competitors in the market does not concern Jonas too much, however: “We are not a copycat, but I definitely like what Simple is doing. And their success is an important signal to us.”
Yet while Avuba maintains a focus on a more ergonomic banking experience, with a friendly and intuitive interface usable with any device, which is secure yet not too time-consuming to use, it will perhaps need to define its USP a little more clearly.
Not least, that is because the banking renaissance which is surely in the pipeline could well be led by traditional financial institutions revitalising themselves in response to companies such as Avuba and Holvi. The former is beginning to roll out its accounts during July and August, while the latter is yet to launch across the continent, but whether either of them will gain sufficient clout to become global contenders remains an open question.