What’s going on at N26?

What’s going on at N26: The prominent German neobank has decided on a massive governance shake-up as headaches continue.

N26 has been a poster child of the incredibly competitive neobanking scene in Europe. Customers, growing increasingly frustrated with their country’s traditional banks, turn to continent-wide digital alternatives for greater ease and opportunity. N26 has capitalised on this massively. 

But it hasn’t come without its challenges. The bank has landed in trouble with German regulators on multiple occasions, primarily over allegations of lax oversight. 

This time, as investors grow ever more worried, the incident has resulted in a high-stakes leadership reshuffle. 

The latest news is that co-founder Valentin Stalf will quit his joint-CEO role and move to the company’s supervisory board (a common feature in German governance models; here’s a brief explainer).

The Financial Times reports that it’s part of a broader deal designed to appease investors, who are worried about the continued level of attention the bank is getting from the German financial regulator, BaFin. 

Under the deal, Stalf would move to the supervisory board, he and co-founder Max Tayenthal would relinquish special veto privileges, and investors would agree to scaled-down returns. 

The move comes on the back of repeated headaches for the neobank. For years, BaFin had imposed restrictions and appointed a regulatory supervisor over concerns that its anti-money laundering (AML) controls weren’t up to scratch. 

In mid-2024, the restrictions were lifted, signalling new hopes for rapid growth. But those hopes were dashed in early 2025 as BaFin found new risk management weakness that, it said, may warrant the reappointment of a supervisor.

We won’t know that until some time passes. 

Governance re-shuffles often go to great lengths to appease critics in the present. They provide new faces to counter old problems, and can often help in keeping regulators and activist investors satisfied, at least for a limited period of time. 

That will likely be the case here, too. The more balanced nature of the re-shuffle speaks to that. Stalf and Tayenthal will keep many decision-making powers, it will just be in a moderated setup where other investors have more say in the company’s next moves, particularly at this difficult period when it has to ward off more regulatory scrutiny. 

Ultimately, governance reshuffles will go to varying degrees towards two polarised outcomes.

• They can end up being precisely what the company needed. The previous setup was simply not working, whether it was because of conflicts of interest, lack of communication, lack of governance skills or other core issues. Think of cases like WeWork, where other stakeholders never really looked back following Adam Neumann’s departure. 

• They can end up hurting the company, often because more stakeholders criticise the shake-up as unnecessary, and point to leaders’ past achievements as a reason that they should be at the helm during rough periods. Sam Altman’s removal and subsequent reinstatement as chief executive of OpenAI is probably the most dramatic example of this. 

Which way the N26 will go needs more time to decide. So far, there’s no indication of open hostility in response to the decision, although there has been some criticism of Stalf moving directly from the management board to the supervisory board. 

Since supervisory boards are supposed to be independent, some see Stalf’s immediate joining as contrary to that principle, since he is a co-founder who has just left a CEO role. His level of connection with the company is high enough to warrant a “cooling-off period” before he can join the supervisory board, critics have said.

N26’s repeated issues with risk management and internal controls have prompted the company to think about governance as a solution. 

Reshuffles at the top are a common tactic, and that’s precisely what has happened here. 

It’s not the most dramatic, as Stalf and Tayenthal will hold onto significant decision-making powers for now, but it may be a signal of wider changes coming to the bank in the near future. 

How the company’s reputation fares with BaFin will be a significant indicator of how new governance decisions play out.