The challenger bank N26 has announced that it will be closing accounts for UK customers on 15 April, citing difficulties created by the Brexit process.
The bank, with about 200,000 customers, is one of the smaller operators in the UK. It launched with a significant marketing campaign and only began offering current accounts in the UK after the EU referendum.
But it has said that the “timing and framework” of the Withdrawal Agreement made it impossible to continue. Chief banking officer Thomas Grosse said: “While we respect the political decision that has been taken, it means that N26 will be unable to serve our customers in the UK and will have to leave the market.”
With the UK having left the EU, we will in due course be unable to operate in the UK with our EU banking license, so we will be leaving the UK and closing all accounts. We’ve made careful plans to support customers, and we are sorry to have to leave.
While there is no sign that other challenger or established banks will follow suit, the financial services sector is being held back by a lack of innovation meaning established players are falling behind, according to risk management experts.
The bank said in a Tweet that the decision will not affect its “global vision to transform retail banking”.
The move comes on the day that shadow chancellor John McDonnell has said he fears there’s a “risk” of an exodus from the City if the government does not get a swift deal with the EU on financial services.
Alex Kwiatkowski, Principal Industry Consultant, Global Banking Practice at SAS, said banks must embrace fintech if they are to drive success in the evolving financial landscape.
“As the financial landscape rapidly changes, banks which adopt new technologies are making strides ahead of the competition. But the difference is in the data,” he said.
“Banks which can analyse this data quickly and effectively to derive relevant and actionable insights for customer service, data protection, and innovation, will come out on top.”
“Any competitive bank, whether traditional or challenger, should be looking towards fintech as a golden opportunity. To get ahead, they need to become truly data-driven organisations which ultimately means having the capability to make faster, smarter decisions. After all, it’s only a matter of time before a killer banking app is created, leaving competitors scrambling to keep up.”