The onlinebanking market is a still growing market in Germany. A business market with high potential is the mobile online banking market.
In Germany online banking services as part of the usual banking business and financial services are regulated in the German Banking Act (Kreditwesengesetz – “KWG”). For banking business and financial services a license is needed.
The costs of a license range from EUR 2,000.00 to 20,000.00 depending on the specific business model.
Among other things, the resources needed for business operations, in particular sufficient initial capital consisting of Common Equity Tier 1 capital, are required to be available in Germany. In the case of asset and portfolio managers, who, in providing financial services, are not authorized to obtain ownership or possession of funds or securities of customers and who do not trade in financial instruments for their own account: an amount equivalent to at least EUR 50,000.00.
Credit institutions have to fulfill the funds requirements according to Art. 92 and following of Regulation (EU) 575/2013 (CRR). These are: a Common Equity Tier 1 capital ratio of 4.5%, a Tier 1 capital ratio of 6% and a total capital ratio of 8%. When calculating the capital ratios, the fixed overheads of the respective asset manager play an important role.
According to the German industry association Bitkom 53% of the people in Germany have used online banking services in 2016.
In order to provide online banking services in a cost effective way in which also all legal requirements are complied with a cooperation with a fronting bank is recommended.