N26, which holds a European banking license, is one of the smaller challenger banks in the United Kingdom, and on April 15, it will be closing around 200,000 UK customer accounts. The company has announced that the reason behind this decision is the difficulties surrounding Brexit, as the “timing and framework” of the withdrawal bill has made it unfeasible to maintain operations in the UK.
Thomas Grosse, chief banking officer at N26, announcing this move, said:
“While we respect the political decision that has been taken, it means that N26 will be unable to serve our customers in the UK and will have to leave the market.”
Speaking further on the issue, Forrester’s senior analyst Aurelie L’Hostis, explained:
“N26’s launch in the UK might have felt like a natural next step back in 2018. The challenger bank had successfully attracted half a million customers in 17 European countries, and it could then use its European banking licence as a parachute. Yet, Brexit was already looming ominously in the distance back then – and there were questions regarding the validity of that licence post-Brexit. Beyond that, N26 entered the UK market on the heels of fast-moving rival challenger banks Monzo, Revolut and Starling Bank. Catching up was not going to be easy.”
As it stands, all N26 accounts in the UK will be operational until April 15 when they will be shut down automatically. The company also stated that any money that customers fail to withdraw or transfer from the accounts will be placed in a holding account by default. It said UK staff involved in the business will transition into other roles within the firm. Other challenger banks like Monzo and Starling operate with UK licenses, which is why they are most likely not under similar pressure to pull out of the UK anytime soon.
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