Despite all the prophecies of doom, Germans are discovering private pension provision via the capital market. A good twelve million German citizens are actively defying inflation by saving in shares and funds or parking liquid funds in overnight and fixed-term deposits. This is a trend from which investment fintechs in particular are benefiting.

The review shows that the big three alone, Trade Republic, Raisin and Scalable Capital, have cumulative assets under management of more than 100 billion euros. It took Raisin six months to attract a further 10 billion euros in customer funds. Scalable recently reached one million customers and broke through the threshold of 20 billion euros in customer funds, which means that an impressive 20,000 euros are registered per securities account.

A figure that should make banks sit up and take notice, because they are not investing small amounts. However, the constant influx of new money into the investment fintechs coming via the brokerage primarily comes from ETF savings plans, which starts with small amounts, especially among the Trade Republic clientele. Accordingly, with four million customers, there are around 9,000 euros per customer on the platform, which amounts to 35 billion euros in assets. These figures refer to the past financial year - around 100,000 customers are added each month.

Anyone can imagine the dimensions this will lead to. The resonance Trade Republic has in retail banking is also illustrated by the introduction of the Visa debit card: more than one million people have signed up to the waiting list, and the happy owners post unboxing videos on social networks when they receive the (metal) card. It's not every day that a simple product can be celebrated in this way. But it shows what kind of branding Trade Republic is capable of.

The strategic impetus lies in the fact that a generous cashback is paid into the savings plan with every card payment. In this way, Trade Republic remains true to itself by focusing everything on securities savings - and boosts new brokerage customer business via a bank product. Although Trade Republic has had its own full banking license since December, it does not want to build up a large bank balance sheet itself in order to keep regulatory capital low. Trade Republic will never have a voluminous lending business.

This has the side effect that you are not valued as a bank, but as a tech company with a financial business. This is the big fintech story taking place in the background: regardless of whether you have entered the race as a broker or payment specialist, the business can be expanded via API models („as-a-service“) and thus the sales mix can be shaped without a separate bank balance sheet. And these fintechs that are cooperating: There is currently a whole flood of early-stage fintechs that are focusing on investing and financial education, adding one module after another.

Trade Republic is also turning simple things into banging products. The current account is coming soon, although this will initially be limited to transfers and standing orders. Although additional opportunities are opening up in the deposit business, the company is doing quite well by simply passing on the interest rates available via partners to customers. The side effect: funds remain on the platform and are immediately available for equity investments.

And as far as the still small deposit sizes are concerned: it is precisely the merit of investment fintechs such as Trade Republic that people with a small purse have access to the capital market at all. And every little helps: these start-ups grow with their customers, who receive higher salaries and credit ratings over time and then increase their capital market allocation via the familiar fintech platform. To be the home for retail money investment, you build a long-term business.