N26’s logo seen displayed on a smartphone.
Rafael Henrique | SOPA Images | LightRocket via Getty Images
Customers of the German online bank N26 say they feel “outraged” and “betrayed” by the firm’s decision to leave the U.K.
Berlin-based N26 announced last week that it would no longer be able to operate in the country as it won’t have the appropriate license to do so after Brexit. The start-up will be closing all U.K. accounts on Apr. 15.
The firm made its U.K. foray in October 2018, over two years after the U.K. referendum on its EU membership and six months before Brexit was initially planned.
Miguel Frias Mosquea, an N26 customer based in London, told CNBC he felt “outraged” N26 had blamed its U.K. departure on Brexit: “It’s fake news.”
“Surely they need an excuse for investors and blame it on Brexit, not on mismanagement or lack of knowledge on how to tackle the U.K. market,” the 33-year-old said. “It’s better to pretend it’s not their own failure.”
Another, Ian Cook, said he felt “disappointed” by N26’s U.K. closure, saying he was a fan of the firm’s offering, having started using it in July 2019.
“They are still my only bankers so I haven’t used any other banks,” Cook, who is based in the English county of West Midlands, said. “I prefer N26 over other banks because of the ‘extras’ that come with the accounts.”
Cook, 62, said he also felt “betrayed” as N26 “never gave any indication that the U.K. leaving the EU would make trading difficult for them.” He added: “I don’t believe Brexit was to blame.”
What is N26?
N26 is one of a breed of new branchless banking challengers looking to gain market share from the incumbents with their slick apps and word-of-mouth marketing. In Britain, it had arrived into a market already flooded with banking challengers, from Monzo to Revolut.
N26 hasn’t disclosed its U.K. customer numbers publicly, but reports have said it managed to attract just 200,000 customers in the U.K. since it opened there in 2018. Monzo, its closest rival, has picked up 3.6 million customers since it was founded in 2015.
Andrew Bowen, the CEO of a Cardiff, Wales-based personal finance comparison website called PocketRate, said that, though he is not an N26 user himself, customers of the bank he’s interacted with are “disappointed that N26 have pulled out.”
But, he added: “They are the sort of customers that will already have downloaded the Monzo app or the Starling app beforehand anyway.”
Following N26’s announcement to clients that it would shutter its operations in the U.K., rivals Starling and Monese used it as a marketing opportunity to take advantage of the loss of a competitor.
“Just found out your bank’s making a swift Brexit? Don’t worry — we’re here to stay,” Starling said in a tweet. “If you’re in need of a Brexit-proof GBP account, we can be your perfect match,” Monese tweeted.
Mosquea said he preferred Monzo and Revolut’s offerings over N26’s, claiming the “customer service of N26 was severely lacking.”
‘We are sorry’
For its part, N26 said its intention was “always to stay in the U.K.” but that the result of the December general election and the signing of Brexit into law “meant we will in due course be unable to operate in the U.K. with our European bank license.”
“As soon as it was clear that we would have to exit the U.K. market, we communicated this to our customers in order to be as open and transparent as possible,” N26 told CNBC in response to customer criticisms.
“We are sorry to be leaving and we understand this will be disappointing for our customers, and our priority now is to ensure a smooth transition for them.”
Founded in 2013, N26 has picked up an impressive 5 million users around the world. It’s said that 250,000 of those are in the U.S. where it launched last year, and the firm is currently planning on entering Brazil next.
The company has raised over $680 million from investors including PayPal co-founder Peter Thiel, Hong Kong billionaire Li Ka-shing and Chinese tech giant Tencent. It was valued at $3.5 billion last year, making it one of the biggest fintech firms in Europe.