The German mobile bank has announced in a press release its intention to withdraw from the UK market and close all bank accounts opened there. Indeed, N26 will soon no longer be able to operate in the UK with its European banking license.
Customer accounts closed on April 15, 2020
Just 18 months after entering the UK market, N26, which recently passed the 5 million customer mark, plans to withdraw there and close its users' accounts from April 15. The neobank justifies this decision by the timetable and framework defined in the European Union withdrawal agreement. Until then, the European passport allowed the bank to carry out banking activities in all EU member countries. However, as the UK is no longer part of the EU, players wishing to offer their services in this market will need to obtain a license from the FCA (Financial Conduct Authority).
Customers of the mobile bank will have to transfer their deposits to another institution. As for the employees dedicated to UK activities, the startup assures that the majority will take up new positions within the company as it continues to grow.
If N26 is pulling out, it may be because the market has become too expensive for it. Indeed, the neobank has had a banking license issued by the European Central Bank since 2016, but no UK license. Given the number of customers it registers in the UK, obtaining this sesame would be particularly costly. On social networks, many users criticize the bank for leaving an ultra-competitive local market. Some specialists also point to N26's mixed performance in the UK. App Annie, for example, ranks it 19th in terms of active monthly visitors between January and October 2019.
Transforming the global banking sector
Despite this announcement, N26 maintains its determination to transform the global sector and explains that this does not call into question its development trajectory. In particular, the German company points out that it has opened 250,000 new accounts in the United States in recent months.
In the coming months, N26 plans to strengthen its presence in the US, but also within the EU. The bank, which registered 1 million customers in June 2018 and now boasts 5 million, looks set to achieve its goals. To accelerate its development, N26 plans to expand its offering through partnerships and invest heavily in recruiting product and tech teams. Now valued at over $3.5 billion, it can count on well-known investors such as China's Tencent, Singapore's GIC fund and Allianz.