British closure of N26: customers criticize the bank “Careless”

Angry customers have denounced the closure of the UK branch of German N26, less than two years after it opened in Britain.

The Berlin-based digital bank said on Tuesday it would close all of its existing UK accounts by April 15 as it was “no longer able to operate in the UK with our European banking license.”

The company has around five million customers across Europe, but only 200,000 customers in the UK, the continent’s second largest economy.

It competes with UK-based only apps competing banks such as Revolution, which claims around 10 million accounts in Europe, and Starling Bank, which has 1.25 million UK accounts.

Customers criticized the move saying the bank, valued at £ 3.5bn, was more concerned with ‘increasing investments, increasing profits and silly advertising campaigns rather than caring about their existing customers ”.

Damaged trust in digital banks

Small business owner Adam, from Camden, north London, switched from Revolut to N26, after getting tired of constantly going through careful security checks on his Revolut account.

He said the sudden closure of his N26 account damaged his confidence in all digital banks.

Adam, 31, said: “It has worsened my confidence in all of these new challenger banks. There is a lot of hype that they all claim to be different. But between that and my experience with Revolut, I feel like the challenger banks are more concerned with increasing investments, increasing profits, and creating silly ad campaigns rather than caring about their existing customers.

N26 established its operations in the UK in October 2018, more than two years after the country voted for Brexit, and five months before Britain originally left the European Union (EU).

Human resources manager Lucas Davison opened an N26 premium account for £ 14.90 per month in August, which includes medical coverage, free ATM withdrawals around the world and a stainless steel Mastercard.

N26 blames the Brexit economy

Lucas, from Aldgate, east London, said: “The added benefits were part of the reason for setting up the account in the first place.”

Lucas said he is now considering switching to a Revolut account.

Critics have also questioned whether Brexit was behind N26’s decision to shut down its UK branch.

Sarah Kocianski, head of research at fintech consultancy 11: FS, wrote on Twitter: “No one in the industry is really surprised by this. Why bother obtaining and maintaining a license [along with regulatory capital] in a market where you face stiff competition, when you could go to a lot of other places where you don’t? “

Mission to transform the global banking industry

Lucas and Adam both have their main bank accounts with major banks.

Even if competing banks, like Monzo and banking fintechs like Monese, have attracted millions of accounts in recent years, they’ve struggled to get customers to use them as their primary account.

According to a July 2018 ComRes poll, only 9% of Britons use these companies as their primary bank account, where their salaries are paid.

This is important because using customer deposits to fund new loans is the basic business model of all retail and commercial banks.

Thomas Grosse, Banking Director of N26, said on Tuesday: “Although we are leaving the UK, we will continue our mission to radically transform the global banking industry through innovation and the power of technology. This means growing within the European Union, where we recently passed the 5 million customer mark, strengthening our presence in the United States, one of the world’s most attractive banking markets, and expanding into new countries. .

N26 was valued at $ 3.5 billion in its July roundtable, its investors include US billionaire Peter Thiel, Hong Kong tycoon Li Ka-Shing and the Singapore sovereign wealth fund GIC.