Challenger banking brand N26 has announced it is withdrawing from the UK market as it is unable to operate with its European banking licence.
In a statement, the company said it will close its UK operations and the majority of its staff based in the country will move into new roles within the business.
As of April 15, 2020, all N26 UK accounts held in the UK will be closed and customers are being asked to transfer their deposits to an alternative bank account.
Until then, however, all accounts will work as normal, including all card payments and direct debits. Customers with accounts in other markets will not be affected.
Thomas Grosse, chief banking officer at N26, said that in spite of having to leave the UK, the mobile bank will continue its mission to “radically transform the global banking industry” through innovation and technology.
“This means growing within the European Union, where we recently crossed the 5 million customer mark, building our presence in the US, one of the most attractive global banking markets, and expanding into new countries,” he added.
N26 launched into the UK market in October 2018 as a rival to challengers such as Revolut, Starling, Monzo, Atom and Tandem.
It was founded in 2013 by two Austrians and got its name from the ‘N’ in number and the total number of small cubes that make up the complex Rubix cube. At the time of entering the UK market had more than 1.5million customers across Europe.
Using its German banking licence, N26 was able to operate in the UK without obtaining a country-specific licence, although at the time of launch did state that applying for a UK licence was a possibility, if required.
“If there comes a point at which that is not sufficient, we would do everything required of us to ensure we are still authorised to operate in the market,” the mobile bank said.
This has prompted those affected to question whether the decision to withdraw from the UK market is solely a result of Brexit, or if N26 inroads into the UK combined with the cost of a banking licence simply doesn’t make financial sense for the business.
Banking commentators have speculated that the brand may have found the UK market more challenging that they had initially envisaged.