FinTech bank N26, based in Germany, will no longer operate in the U.K. following Brexit, according to reports. N26 customers will need to transfer deposits, spend all their money or withdraw funds before their accounts close on April 15, 2020.
In Europe, EU financial institutions can take advantage of a process called passporting, where they can apply for a banking license in an EU state, then transfer that license to other member states. However, with Britain leaving the union via Brexit, that license will no longer be valid, and N26 would have to reapply through a different process.
“The timings and framework outlined in the EU Withdrawal Agreement mean that the company will, in due course, be unable to operate in the U.K. with its European banking license,” N26 said.
There’s also competition in the region from other banking startups like Monzo, Starling Bank and Revolut. The investment for N26 to continue operating in the country would be a deep one, and it’s possible that N26 didn’t think it would be worth it financially to continue operating there.
Customers in other countries won’t be affected. People who live in the U.K. can no longer sign up with the financial institution, and current customers must get everything done by the bank’s cancellation date. On that date, everything will be cancelled, and customers won’t be able to access their accounts. Premium subscriptions will also be cancelled.
In December, N26 U.S. CEO Nicolas Kopp spoke about the bank’s expansion into the U.S.
“You have a market that has high-level phone penetration, [and] people are really tech-savvy and are used to trying out new products,” Kopp explained. “At the same time, I think some of the payment and banking infrastructure is fairly outdated. I think that combination … made [it] a really attractive option for us to expand into the U.S.”