This Peter Thiel-backed startup just took a major step towards replacing your bank

N26

N26 Management Team left to right: Valentin Stalf, founder and CEO of N26, Maximilian Tayenthal, founder and CFO of N26, Matthias Oetken, CFO/CRO of N26 Bank, Christian Rebernik, CTO of N26, Markus Gunter, CEO of N26 Bank

N26, a mobile banking startup backed by PayPal founder Peter Thiel, just took a major step forward in its mission to replace banks.

The year and a half old Berlin based startup was awarded a full German banking license by the Federal Financial Supervisory Authority and the European Central Bank on July 18, 2016.

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This license gives the company regulatory approval to conduct banking operations across Europe and expand its current platform, which includes real-time banking, cash withdrawals, and money transfers.

"This banking license will allow us to significantly enhance the diversity of our product portfolio. For our customers, that means access to the best financial products, right on the app," says Valentin Stalf, founder and CEO of N26 in a statement.

Instead of developing all products in-house, N26 wants to partner with innovative fintech companies around the world to provide customers with the best savings, investments, credit and insurance products directly with their app, according to the statement. The company is planning to roll out innovations like real-time credit, greater security through artificial intelligence, and expense sharing over the next year.

"The customer could have an account with us, but they can invest some money with, or get a loan from Lending Club or do an international transfer with Transferwise," Stalf previously told Business Insider. "Then we would be better than every traditional bank, and able to offer a better rate."

N26 was launched in January 2015 and currently has a user base of more than 200,000 customers in eight European countries. It recently raised a Series B round of $40 million of funding in June.

BI's parent company Axel Springer has a small stake in N26