Banks and other financial institutions find themselves in an awkward position these days. For N26, a well-known digital bank, the Brexit will have some unexpected consequences.
In fact, the institution will leave the UK market altogether. That is rather unfortunate, considering N26 has over 200,000 customers across the United Kingdom.
A Major Setback for N26
Political events can often have widespread consequences. More often than not, these developments will affect other core industries. As far as the Brexit is concerned, the debacle has gone on long enough. The UK is finally getting its separation from the EU, just like so many people wanted. Although the sentiment regarding this decision has changed in the past year or so, the “split” will still go into effect.
For various banks servicing customers in the UK, the landscape will change. One key example comes in the form of digital bank N26. Although it is a successful venture in the United Kingdom, their services will no longer be accessible come April 15. That takes many people by surprise and causes some serious disgruntlement.
According to the German bank, the Brexit is to blame for this decision. A bit of an odd statement, considering how big the UK launch was for the company. N26 Entered the British market just 18 months ago. At that time, it was more than apparent that the UK would be leaving the EU.
It is certainly true that this political change ushers in core changes. One of those changes is how a European banking license will no longer be valid in the UK. Obtaining a dedicated license in the United Kingdom would be one option to explore. However, the company will – despite claiming they would continue in the UK in October of 2019 – not pursue this avenue.
Picking up the Pieces
Making matters worse is the sudden brief withdrawal window customers are facing. N26 Clients in the UK have until April 15 to withdraw any remaining funds. After that date, all accounts will be closed automatically. It creates a very uneasy situation for the German challenger bank.
Another reason for leaving this market are the mounting costs. One N26 spokesperson allegedly claims how the costs of operating in the UK outweigh the benefits. That is a very strong sentiment. London is widely considered to be the financial capital of the Western world. Not having a presence in this region can be detrimental to the future success of the challenger bank.
Thankfully, there are plenty of options for British consumers. The challenger bank space has only begun heating up in recent years. Noteworthy competitors such as Monzo and Starling Bank will undoubtedly cater to the clients left behind by N26. It remains a very competitive space with ample service providers to explore.