Xaver's activities associated with his Bafin license
Xaver's Ambitious Plan for Boosting Pan-European Personal Pension Products (PEPP) in Germany
Cologne-based fintech company, Xaver, has recently secured a financing round of five million euros and is setting its sights on the German market for PEPP. Founded by former managers of fintechs Coya and Hypoport in 2023, Xaver's mission is to offer fund-based policies and ELTIFs for its customers, with a focus on cost-efficient and flexible products to attract younger demographics.
Max Bachem, Xaver's CEO, is enthusiastic about the potential of embedded finance and sees banks, insurers, and financial distributors as enough customers for Xaver in the short term. However, the company's ambitions extend beyond the financial sector, with potential for expansion into companies outside the industry.
Xaver's strategic approach to PEPP includes six key components:
- Digital-First Platform: Xaver aims to provide a seamless, fully digital experience for customers signing up for PEPPs. This includes easy onboarding, automated advice, and transparent information about product features and fees, making the pension product accessible and understandable.
- Product Customization and Flexibility: Given that PEPPs are designed to be portable across EU countries, Xaver plans to emphasize the portability feature, which is attractive to mobile workers. The product would be customizable to suit various risk appetites and retirement goals, adapted to German regulatory specifics and customer preferences.
- Partnerships and Distribution: Xaver likely intends to collaborate with local distributors, fintech platforms, and possibly employers to enhance market reach. Multi-channel distribution helps tap into different customer segments, including younger demographics who prefer online channels.
- Regulatory Compliance and Customer Trust: Ensuring full compliance with German and EU regulations governing PEPPs will be central. Xaver may focus on building trust through transparent fee structures, clear communication of investment risks, and adherence to consumer protection standards.
- Education and Awareness Campaigns: Since PEPP is a relatively new product, Xaver’s plan may include initiatives to educate potential customers about the benefits and features of PEPPs, addressing common concerns about pensions, and emphasizing long-term retirement savings.
- Technology-Driven Investment Management: Using data analytics and automated portfolio management could help optimize investment outcomes and costs, providing customers with efficient and competitive pension products.
Xaver's first major customer is Bavarian Insurance, and the company's main business has been providing support for insurers. However, Xaver now aims to offer pension products itself, with the goal of boosting the market for pan-European private pension products (PEPP) in Germany.
While finding a suitable partner for expansion into embedded finance is identified as the biggest hurdle, until one is found, Xaver will continue to focus on companies in the financial sector. Lars-Thorben Niggehoff, a freelance journalist and founder of the journalism bureau dreimaldrei, writes about financial topics, SMEs, and the real estate market for publications such as Brand Eins, Capital, Welt, and Wirtschaftswoche, and has covered Xaver's progress closely.
- In alignment with its mission, Xaver, the fintech company, aims to utilize technology in investing to offer cost-efficient and flexible personal pension products (PEPP) in the German market, targeting younger demographics with a digital-first platform and flexible product customization.
- Beyond the financial sector, Xaver's strategic approach for PEPP expansion includes partnerships with local distributors, education and awareness campaigns, and a focus on regulatory compliance to build customer trust and attract a broad range of customers.
