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German fintech bank N26 has told customers that it’s pulling out of the UK because it won’t have a license to operate there after Brexit. The company said it will close down all UK accounts on April 15 and is advising customers to transfer their funds to alternative bank accounts.
German online bank N26 announced on Tuesday it is leaving the United Kingdom because, after Brexit, it will be enabled to operate there. The company said that “with the UK having left the EU at the end of January, we will in due course no longer be able to operate in the UK with our European banking license. Therefore, we are writing to share the news that we will be leaving the U.K. and closing all accounts.”
The final closure of all accounts is expected on April 15 and until then, all customers have to transfer their assets to alternative accounts.
The bank has managed to gather 5 million users and raise more than $680 million from investors including the billionaire Peter Thiel, Hong Kong business magnate Li Ka-shing and Chinese tech company Tencent.
N26 Leaving UK: Unexpected Move to Do
However, this came as a non-expected thing to do since N26 opened shop in the UK just five months ago. That means the company actually knew that Brits want to leave EU because they voted it five years ago.
In fact, its CEO Valentin Stalf even said in one of his interviews that launching in the UK was “a no-brainer for us, independent of Brexit.”
N26 hosts more than 200,000 British accounts, whose owners are likely to be pushed towards digital banking alternatives like Monzo and Revolut.
Sarah Kocianski, head of research at fintech consulting group 11:FS said:
“The resources (financial and otherwise) of getting and maintaining a license in the U.K. probably weren’t worth it as far as N26 was concerned, which in turn suggests it had struggled to acquire a meaningful number of customers here. Given it holds a European license it can easily turn its attention to another market there without the expenditure required to get regulated in the U.K.”
According to a report by Europe tech outlet Sifted, N26 had hard times to get users in the UK, barely scraping the top 20 most-downloaded fintech apps in the country in December.
Revolut Partnering with TrueLayer
Revolut, the European banking and money transfer app that now has more than 10 million customers, has recently partnered with open banking API provider TrueLayer to add bank account aggregation features to its app.
That means that Revolut’s UK customers can now connect their external UK bank accounts to Revolut, enabling them to see all of their bank balances and transactions. It doesn’t matter in which of the UK bank accounts the data resides in. This is also known as account aggregation and it is designed to provide a more complete view of user’s transactions.
TrueLayer co-founder and CEO Francesco Simoneschi commented:
“I think this is the moment Open Banking will go mainstream. Revolut is putting this feature at the very core of their customer journey and will set the standard for the next phase — not just in the U.K. but everywhere.”
Joshua Fernandes, Product Owner for Open Banking at Revolut added that with the launch of the new Open Banking feature, UK customers can now view and manage multiple external bank accounts, enabling them to interpret their day to day spending across all of their accounts.